Despite a rocky 2018, many analysts still are bullish on the investing outlook for 2019. Yes, the final quarter of last year was miserable - but the upshot is that it left investors with numerous higher-quality cheap stocks to buy.
Similarly, Goldman Sachs Chief
However, investors still need to be savvy about which stocks to buy and which to avoid. That's why we turned to TipRanks to pinpoint buy-rated stocks with significant support from the analyst community. Here are seven cheap stocks to buy, according to top-rated
Costco
Market value: $92.7 billion
TipRanks consensus price target: $242.87 (15% upside potential)
TipRanks consensus rating: Strong Buy
Warehouse retail chain
Five-star Tigress Financial analyst
Feinseth, who doesn't offer a price target, concludes, "We believe the recent pullback on near-term weakness is a major buying opportunity and believe significant upside exists from current levels." That's thanks to
Argus analyst
Shoe Carnival
Market value: $589.3 million
TipRanks consensus price target: $45.33 (19% upside potential)
TipRanks consensus rating: Strong Buy
Family footwear retailer
So what's driving this bullish sentiment? Poser explains, "Significant improvements in customer engagement and merchandising are becoming evident." For example, SCVL's new loyalty program is beginning to bear fruit; sales to ShoePerks members jumped by double digits during the third quarter.
Poser believes the stock's recent pullback - shares are off 15% from their late-August highs, even including a rally to start to January - is unwarranted, especially given the strong Q3 beat and improved outlook. "More targeted customer communications as the CRM improves, and the correct levels of more relevant assortments should allow the momentum of the company's results to continue," the analyst says.
Also note that
Monolithic Power Systems
Market value: $5.3 billion
TipRanks consensus price target: $147.57 (20% upside potential)
TipRanks consensus rating: Strong Buy
"In an environment in which semiconductor industry revenue is decelerating, MPWR is targeting another year of 20%+ revenue growth in 2019," Bolton writes. "In our view, MPWR's diversified growth profile, management's consistent execution, and the pullback in the shares (in the second half of 2018) combine to make MPWR shares our top pick as we enter 2019." Shares are down 18% since an early September peak.
Given Monolithic's ability to gain market share and its consistent execution, Bolton calls his 2019 revenue estimate of roughly 14% year-over-year growth "conservative." He likes the high-growth potential of segments such as Storage and Computing, Automotive and Industrial, which are stealing market share and garnering new greenfield opportunities.
Bolton estimates prices will spike by 22% to $150 per share. He's not alone in his optimism - MPWR currently enjoys 100%
Evolent Health
Market value: $1.5 billion
TipRanks consensus price target: $33.33 (59% upside potential)
TipRanks consensus rating: Strong Buy
From one top pick to another. Best-performing Oppenheimer analyst
"The recent pullbacks set up some great opportunities in Healthcare IT," he writes, arguing that EVH stands out from the crowd.
Because of the increased volatility in the market, Naidu expects investors to place an increased focus on fundamentals and valuations in 2019. In particular, he predicts that investors will gravitate toward companies with tangible industry tailwinds and strong fundamentals.
That should be a boon for
"We believe EVH will be the biggest beneficiary of this push as providers seek external help to navigate these changes and will likely lead to increased pipeline in 2019," Naidu writes.
Like Monolithic, Evolent currently has only buy ratings from the Street. You can get more analysis in TipRanks' EVH Research Report.
Apple
Market value: $722.4 billion
TipRanks consensus price target: $178.57 (22% upside potential)
TipRanks consensus rating: Moderate Buy
The company blamed a slowdown in
However, it's not all doom and gloom.
Instead he retained his "Strong Buy" rating on the stock, arguing that AAPL could still be one of the FAANGs' best-performers in 2019.
Similarly, Monness'
He sees
Netflix
Market value: $147.1 billion
TipRanks consensus price target: $386.26 (23% upside potential)
TipRanks consensus rating: Moderate Buy
Netflix (NFLX, $324.66) has recently received a wide swath of upgrades, including from Goldman Sachs analyst
"With Netflix shares down 36 percent since record highs in July, and the S&P 500 down 10 percent over the same period, we believe Netflix represents one of the best risk/reward propositions in the Internet sector," Terry wrote in his
Looking out longer-term, the analyst sees Netflix doubling its annual content investment by 2022. He is optimistic that by 2022, NFLX will also generate positive cash flow even if it means another round of money-raising on the debt markets.
Netflix gained some ground Friday on the back of more upgrades, including from
Find out more from TipRanks in its NFLX Research Report.
Quidel
Market value: $2.1 billion
TipRanks consensus price target: $68.20 (35% upside potential)
TipRanks consensus rating: Strong Buy
We go from well-known to hardly known with our final cheap stock pick: Quidel (QDEL, $52.67). Quidel is a major American manufacturer of diagnostic health-care products that are sold worldwide, and it's far from a household name.
But lack of name recognition isn't a worry to
"The largest medical point-of-care diagnostics pure-play, QDEL has executed well and has multiple irons in the fire in its busy R&D pipeline," the analyst explains.
Furthermore, the stock is now down 17% over the past three months. "An unexpected initial legal ruling prompted a major pullback in the shares, which we expect to reverse in 2019," Massaro writes. "We believe that QDEL will win (resulting in no impact) through motion, or in trial
He recommends buying the stock on weakness, as Quidel's sharp December selloff inaccurately prices in the worst-case scenario. Meanwhile, Massaro's $70 price target suggests shares can rebound 33% from here. Discover more about this lesser-known stock in the TipRanks' QDEL Research Report.
Harriet Lefton is a Contributing Writer at Kiplinger.