In this article, we will take a look at aggressive stock portfolio: 13 stocks picked by analysts. To skip our analysis of the recent market activity, you can go directly to see the Aggressive Stock Portfolio: 5 Stocks Picked by Analysts.
By definition, aggressive stocks are ones that offer higher returns than conservative and relatively safer stocks, at the cost of a higher risk. Typically, aggressive stocks include small-cap and micro-cap stocks of companies that are targeting a specific niche and stocks of companies that are at the early stages of the business cycle. Aggressive investing is an endeavor which shouldn’t be taken lightly even though it provides opportunities for substantial returns as it also exposes the investors to bigger than usual losses if things don’t pan out as per expectations.
There is potential meat on the bones for investors that are willing to take on risk in the current environment. The macroeconomic conditions in the United States are expected to take a turn for the better with declining rate of inflation (compared to the last year) and potential interest rate cuts this year. After a dovish pivot in recent past, the United States Federal Reserve earlier this month maintained its view of three interest rate cuts by the end of the year. Lowering interest rates are generally a good omen for small-cap stocks and companies in the early stages of business cycle.
iShares Core Aggressive Allocation ETF, is an ETF that tracks an index composed of a portfolio of equity and fixed income funds intended to represent an aggressive target risk allocation strategy. As of December 31, 2023, the ETF generated a 1-year return of 18.28% and a 5-year return of 9.61%. The ETF, traded on NYSE Arca, with nearly $1.9 billion in net assets, is up nearly 7.1% year-to-date at the time of writing.
Our list of aggressive stock portfolio: 13 stocks picked by analysts includes small-cap companies ranging from six different sectors with three stocks each from the technology, healthcare, and industrials sectors. The stocks on our list have the potential to generate high returns based on the quality of their business and attractive valuations in some cases where the companies hold a decent space in their respective markets, or companies that hold competitive advantage based on their innovative technologies or the ability to obtain one.
A prime example of the former includes BlackBerry Limited (NYSE:BB), a leading cyber security company tightening its belt to improve profitability margins and shareholder returns. On the other hand, companies like NovoCure Limited (NASDAQ:NVCR) are on the brink of potential remarkable breakthroughs. Earlier in March, NovoCure Limited (NASDAQ:NVCR) announced positive results from its Phase 3 clinical trial of a MedTech device to treat patients with lung cancer that has spread to their brains. There’s still plenty of potential upside left for investors as average analyst price targets suggest.
Another company focused on innovation on our list of 13 aggressive stocks picked by analysts is Archer Aviation Inc. (NYSE:ACHR), in this instance, targeting mobility. The company is working on electric vertical takeoff and landing aircraft for use in urban air mobility networks. It has partnered with a UAE-based company and expects to initiate operations soon.
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Methodology
For this article we used Yahoo Finance’s aggressive small cap stocks screener and picked the most popular aggressive stocks from this basket based on hedge fund sentiment. We only retained the top 100 stocks from the list based on market capitalization. The Yahoo Finance’s screener identifies companies with high EPS growth on a YoY basis.
We then sorted the resultant dataset in ascending order of the upside potential based on average price target, as of March 28, to finalize our list of aggressive stock portfolio: 13 stocks picked by analysts.
A database of around 933 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2023 was used to quantify the popularity of each stock in the hedge fund universe.
13. Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS)
Average Analyst Price Target as of March 28: $52.33
Upside Potential as of March 28: 43.96%
Number of Hedge Fund Holders: 18
Irvine, California-based Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) is a biopharmaceutical company advancing its pipeline to address several diseases with high unmet need across a range of therapeutic categories, including eye care, dermatology, and infectious disease prevention.
On March 1, Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) announced the pricing of an underwritten public offering of nearly 2.8 million of its common shares at a public offering price of $32.00 per share. The company expects to raise gross proceeds of nearly $100 million from the offering which also includes pre-funded warrants.
According to Insider Monkey data on 933 hedge funds, 18 hedge funds held shares of Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS), valued at $203 million, as of Q4 2023. Its lead hedge fund shareholder was Cormorant Asset Management with ownership of 2.2 million shares valued at $45 million.
12. Ambarella, Inc. (NASDAQ:AMBA)
Average Analyst Price Target as of March 28: $74.47
Upside Potential as of March 28: 46.68%
Number of Hedge Fund Holders: 27
Santa Clara, California-based Ambarella, Inc. (NASDAQ:AMBA) is a leading developer of visual AI products. Its low-power system on chips (SoCs) offer high-resolution video compression, advanced image processing, and powerful deep neural network processing.
On February 27, Ambarella, Inc. (NASDAQ:AMBA) released its financial results for the quarter ended January 31, 2023. It generated a revenue of $52 million and a net loss of $61 million. Its normalized EPS of -$0.24 surpassed consensus estimates by $0.09.
Following the earnings release, Needham analyst Quinn Bolton reiterated a ‘Buy’ rating for Ambarella, Inc. (NASDAQ:AMBA) shares with a target price of $90 per share which represents a potential upside of 77.27%.
11. The Bancorp, Inc. (NASDAQ:TBBK)
Average Analyst Price Target as of March 28: $50.67
Upside Potential as of March 28: 51.43%
Number of Hedge Fund Holders: 23
Wilmington, Delaware-based The Bancorp, Inc. (NASDAQ:TBBK) is a banking and financial services company that specializes in providing private-label banking and technology solutions for non-bank companies.
On March 8, Keefe, Bruyette & Woods analyst Timothy Switzer lowered the price target for The Bancorp, Inc. (NASDAQ:TBBK) shares to $52 from $55 and maintained an ‘Outperform’ rating for the shares. The target price represents a potential upside of 55.41% based on the latest share price.
As of Q4 2023, according to the Insider Monkey data on 933 leading hedge funds, 23 hedge funds were long The Bancorp, Inc. (NASDAQ:TBBK), among the highest on our list of aggressive stock portfolio: 13 stocks picked by analysts. Richard Driehaus’ Driehaus Capital was the largest hedge fund shareholder with ownership of 0.56 million shares valued at $21 million.
10. Gogo Inc. (NASDAQ:GOGO)
Average Analyst Price Target as of March 28: $13.40
Upside Potential as of March 28: 52.62%
Number of Hedge Fund Holders: 20
Chicago, Illinois-based Gogo Inc. (NASDAQ:GOGO) is the leading global provider of broadband connectivity products and services for aviation. It designs and sources network solutions that connect aircraft to the Internet and develops software and platforms that enable customizable solutions for aviation partners.
As of Q4 2023, Gogo Inc. (NASDAQ:GOGO) shares were held by 20 hedge funds. Chet Kapoor’s Tenzing Global Investors was the leading hedge fund investor with ownership of 3.0 million shares valued at $30 million.
Madison Investments, an investment advisor, made the following comments about Gogo Inc. (NASDAQ:GOGO) in its Q4 2023 “Madison Small Cap Fund” investor letter:
“GOGO is a ground-to-air internet service provider for private jets. Unfortunately, GOGO’s subscriber numbers were hurt by a significant number of planes grounded for deferred maintenance in 2023. During these maintenance periods, GOGO typically pauses the subscription for its clients. GOGO also pushed back its rollout of 5G service, a key strategic initiative for the company and the stock, due to an error in its chip design from one of its suppliers. We believe these issues are transitory and the stock could recover meaningfully as these issues are resolved by the second half of 2024.”
9. IonQ, Inc. (NYSE:IONQ)
Average Analyst Price Target as of March 28: $15.26
Upside Potential as of March 28: 52.75%
Number of Hedge Fund Holders: 21
College Park, Maryland-based IonQ, Inc. (NYSE:IONQ) is a technology company focused on the development of quantum computers designed to solve the world’s most complex problems. It has produced six generations of trapped-ion quantum computers since inception in 2015. IonQ’s current generation quantum computer, IonQ Forte, is the latest in a line of cutting-edge systems, boasting an industry-leading 29 algorithmic qubits.
On February 28, IonQ, Inc. (NYSE:IONQ) released its financial results for the fourth quarter of 2023. Its total revenue surged by 60% y-o-y to $6.1 million, while it reported a net loss of $42 million. The company achieved $6.7 million in new bookings for the quarter, which brings total new bookings during the year to $65.1 million.
IonQ, Inc. (NYSE:IONQ) stock has had a stellar performance in the recent past. The stock has gone up 96.83% during the last 12 months and analysts expect it to grow further with the average analyst target price of $15.12 which represents a potential upside of 51.35%.
8. Custom Truck One Source, Inc. (NYSE:CTOS)
Average Analyst Price Target as of March 28: $9.00
Upside Potential as of March 28: 54.64%
Number of Hedge Fund Holders: 17
Kansas City, Missouri-based Custom Truck One Source, Inc. (NYSE:CTOS) is a single-source provider of specialized truck and heavy equipment solutions with sales, rentals, aftermarket parts and service, equipment customization, remanufacturing, financing solutions, and asset disposal.
On March 7, Custom Truck One Source, Inc. (NYSE:CTOS) released its financial results for Q4 2023. Its revenue increased by 7% y-o-y to $522 million while it generated a net income of $16 million. Its normalized EPS of $0.11 exceeded consensus estimates by $0.01.
Following the earnings release, DA Davidson analyst Michael Shlisky maintained a ‘Buy’ rating for Custom Truck One Source, Inc. (NYSE:CTOS) shares with an unchanged price target of $12 which represents a potential upside of 106.19%.
7. Pacira Biosciences, Inc. (NASDAQ:PCRX)
Average Analyst Price Target as of March 28: $45.30
Upside Potential as of March 28: 55.03%
Number of Hedge Fund Holders: 26
Tampa, Florida-based Pacira Biosciences, Inc. (NASDAQ:PCRX) is a specialty pharmaceutical company focused on the development, commercialization, and manufacture of new pharmaceutical products, based on its proprietary multivesicular liposome (pMVL) drug delivery technology, for use in hospitals and ambulatory surgery centers.
On February 29, Pacira Biosciences, Inc. (NASDAQ:PCRX) released its financial results for Q4 2023. Its revenue increased by 5% y-o-y to $181 million while it generated a net income of $25 million, compared to a net loss of $10 million.
As of Q4 2023, 26 hedge funds out of the 933 hedge funds tracked by Insider Monkey were bullish on Pacira Biosciences, Inc. (NASDAQ:PCRX), one of the highest on our list of aggressive stock portfolio: 13 stocks picked by analysts.
6. TransAlta Corporation (NYSE:TAC)
Average Analyst Price Target as of March 28: $10.17
Upside Potential as of March 28: 58.16%
Number of Hedge Fund Holders: 19
Based in Calgary, Alberta, TransAlta Corporation (NYSE:TAC) owns, operates, and develops a diverse fleet of electrical generation assets in Canada, the United States, and Australia. With a history of more than 110 years, it is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power.
On November 21, TransAlta Corporation (NYSE:TAC) released its updated strategic growth targets to 2028. The growth targets include adding up to 1.75 GW of new capacity to the Company’s fleet by investing C$3.5 billion to develop, construct, or acquire new assets by the end of 2028. It also includes efforts to bring the company’s development pipeline to 10 GW by 2028.
Earlier in November, TransAlta Corporation (NYSE:TAC) announced an agreement to acquire Heartland Generation from Energy Capital Partners for C$658 million. The acquisition is going to add 1,844 MW of complementary flexible capacity to the company’s portfolio.
In addition to updated growth targets, the Board of Directors of TransAlta Corporation (NYSE:TAC) also approved a 9% increase in the regular quarterly dividend which brings the annualized dividend payout to C$0.24 per share. This marks the fifth consecutive annual dividend increase by the company.
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Disclosure: None. Aggressive Stock Portfolio: 13 Stocks Picked by Analysts is originally published on Insider Monkey.