Many experienced investors will seek out stocks that have shown strong recent gains and are primed to keep going. These stocks have gained an “inertia” that is likely to keep them soaring upwards.
Identifying these stocks and capitalizing on their momentum is a fantastic way of bringing solid returns on your investment. The tricky part is identifying which of these stocks is a good long-term investment, and which are likely to fall by the wayside.
Using the TipRanks database, I have identified 3 stocks that have recently been performing better than the wider market and are holding a market value close to their one-year high mark.
These are all rated as “Strong Buy” stocks with enough potential that Wall Street analysts believe their momentum bodes well for the future.
1. Valvoline Inc
The first stock may surprise some people given the recent move away from fossil fuels.
Valvoline is a major producer of petroleum products for the automotive industry, including lubricating oils, fuels, fuel additives, and engine cooling products. They are also the second-largest oil-change provider in the US, with over 1,500 service stations. This equates to 10% of the overall oil-change market in the US.
Whilst the move to electrification is undoubtedly picking up pace, gasoline and motor oil are still critical products, and the company’s size and market share are fueling its strong market performance.
Valvoline has been boosted by the re-opening of the economy as Covid restrictions eased and this has helped their stock price gain 49% in the year-to-date.
Revenues are also up, after dropping due to the pandemic in Q2 and Q3 of last year. The subsequent 3 quarters have seen the highest revenues of the past 9 quarters.
2. Veeco Instruments
Veeco is a manufacturer and supplier of machine and production tools. They design and build processing systems used in the manufacture of a wide range of tech equipment including LED Lighting systems, display screens, data storage, and semiconductors.
Like much of the manufacturing industry, Veeco had suffered a slump in 2020. However, the economic recovery has seen their fortunes restores in a big way. Revenues for the last quarter of 2020 and the first of 2021 were $139 million and $133 million respectively. These are its highest of the past two years.
Veeco has a strong buy rating. Its shares are currently sitting at $24.61 and has an average target price of $29, suggesting a one-year growth potential of 18%.
3. Paratek Pharmaceuticals
Paratek is a biotech company engaged in the development of medication for community-acquired bacterial infections. These are bacteria that have developed a resistance to traditional antibiotic treatments.
Paratek has two main drugs on the market – Nuzyra which is used as a treatment for bacterial pneumonia, and Seysara which is used against acute bacterial skin and skin structure infection.
It also has active research programs, and this combination of drugs on the market and more in the pipeline means Paratek is well placed in the biopharma sector. The company’s niche is also substantial and growing exponentially. Each year there are over 160,000 deaths due to antimicrobial-resistant infections in the US alone.
This is reflected in the company’s stock price, which has risen 64% this year. Shares are currently valued at $10.31 and with a $22 average price target. This suggests a 113% upside in the current year.