Byron Wien Says S&P 500 Will Tumble Before Rallying to 4,500 – Yahoo Finance

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Weve turned a new page on the calendar, Old Man 20 is out the door, and theres a feeling 21 is gonna be a good year and so far, so good. The markets closed out 2020 with modest session gains to cap off larger annual gains. The S&P 500 rose 16% during the corona crisis year, while the NASDAQ, with its heavy tech representation, showed an impressive annual gain of nearly 43%. The advent of two viable COVID vaccines is fueling a surge in general optimism.Wall Streets top analysts have been casting their eye at the equity markets, finding those gems that investors should give serious consideration in this new year. These are analysts with 5-star ratings from TipRanks database, and they are pointing out the stocks with Strong Buy ratings in short, this is where investors can expect to find share growth over the next 12 months. We are talking returns of at least 70% over the next 12 months, according to the analysts. ElectraMeccanica Vehicles (SOLO)Electric vehicles, EVs, are growing more popular as consumers look for alternatives to the traditional internal combustion gasoline engine. While EVs simply move the source of combustion from under the hood to the electric power plant, they do offer real advantages for drivers: they offer greater acceleration, more torque, and they are more energy efficient, converting up to 60% of their battery energy into forward motion. These advantages, as EV technology improves, are starting to outweigh the drawbacks of shorter range and expensive battery packs.ElectraMeccanica, a small-cap manufacturer from British Columbia, is the designer and marketer of the Solo, a single-seat, three-wheel EV built for the urban commuter market. Technically, the Solo is classed as an electric motorcycle but it is fully enclosed, with a door on either side, features a trunk, air conditioning, and a Bluetooth connection, and travels up to 100 miles on a single charge at speeds up to 80 miles per hour. The recharging time is low, less than 3 hours, and the vehicle is priced at less than $20,000.Starting in Q3 2020, the company delivered its first shipment of vehicles to the US, and expanded into six additional US urban markets, including San Diego, CA and Scottsdale and Glendale, AZ. ElectraMeccanica also opened four new storefronts in the US 2 in Los Angeles, one in Scottsdale, and one in Portland, OR. In addition, the company has begun design and marketing work a fleet version of the Solo, to target the commercial fleet and car rental markets starting in the first half of this year.Craig Irwin, 5-star analyst with Roth Capital, is impressed by SOLOs possible applications to the fleet market. He writes of this opening, We believe the pandemic is a tailwind for fast food chains exploring better delivery options. Chains look to avoid third party delivery costs and balance brand identity implications of operator- vs. company-owned vehicles. The SOLO's 100-mile range, low operating cost, and std telematics make the vehicle a good fit, in our view, particularly when location data can be integrated into a chain's kitchen software. We would not be surprised if SOLO made a couple announcements with major chains after customers validate plans.Irwin puts a Buy rating on SOLO, supported by his $12.25 price target which implies a 98% upside potential for the stock in 2021. (To watch Irwins track record, click here)Speculative tech is popular on Wall Street, and ElectraMeccanica fits that bill nicely. The company has 3 recent reviews, and all are Buys, making the analyst consensus a unanimous Strong Buy. Shares are priced at $6.19 and have an average target of $9.58, making the one-year upside 55%. (See SOLO stock analysis on TipRanks)Nautilus Group (NLS)Based in Washington State, this fitness equipment manufacturer has seen a massive stock gain in 2020, as its shares rocketed by more than 900% over the course of the year, even accounting for recent dips in the stock value. Nautilus gained as the social lockdown policies took hold and gyms were shuttered in the name of stopping or slowing the spread of COVID-19. The company, which owns major home fitness brands like Bowflex, Schwinn, and the eponymous Nautilus, offered home-bound fitness buffs the equipment needed to stay in shape.The share appreciation accelerated in 2H20, after the companys revenues showed a recovery from Q1 losses due to the corona recession. In the second quarter, the top line hit $114 million, up 22% sequentially; in Q3, revenues reached $155, for a 35% sequential gain and a massive 151% year-over-year gain. Earnings were just as strong, with the Q3 $1.04 EPS profit beating coming in far above the year-ago quarters 30-cent loss.Watching this stock for Lake Street Capital is 5-star analyst Mark Smith, who is bullish on this stock. Smith is especially cognizant of the recent dip in share price, noting that the stock is now off its peak which makes it attractive to investors. Nautilus reported blowout results for 3Q:20 with strength across its portfolio We think the company has orders and backlog to drive high sales and earnings for the next several quarters and think we have seen a fundamental shift in consumers' exercise-at-home behavior. We would view the recent pull back as a buying opportunity, Smith opined.Smiths $40 price target supports his Buy rating, and indicates a robust 120% one-year upside potential. (To watch Smiths track record, click here)The unanimous Strong Buy consensus rating shows that Wall Street agrees with Smith on Nautilus potential. The stock has 4 recent reviews, and all are to Buy. Shares closed out 2020 with a price of $18.14, and the average target of $30.25 suggests the stock has room for ~67% upside growth in 2021. (See NLS stock analysis on TipRanks)KAR Auction Services (KAR)Last but not least is KAR Auction Services, a car auctioning company, which operates online and physical marketplaces to connect buyers and sellers. KAR sells to both business buyers and individual consumers, offering vehicles for a variety of uses: commercial fleets, private travel, even the second-had parts market. In 2019, the last year for which full-year numbers are available, KAR sold 3.7 million vehicles for $2.8 billion in total auction revenue.The ongoing corona crisis, with its social lockdown policies, put a damper on car travel and reduced demand for used vehicles across market segments. KAR shares slipped 13% in 2020, in a year of volatile trading. In the recent 3Q20 report, the company showed revenue of $593.6 million, down over 15% year-over-year. Third quarter earnings, however, at 23 cents per share profit, were down less, 11% yoy, and showed a strong sequential recovery from the Q2 EPS loss of 25 cents.As the new vaccines promise an end to the COVID pandemic later this year, and the lifting of lockdown and local travel restrictions, the mid- to long-term prospects for the second-hand car market and for KAR Auctions are brightening, according to Truist analyst Stephanie Benjamin.The 5-star analyst noted, Our estimates now assume that the volume recovery occurs in 2021 vs. 4Q20 under our previous estimates Overall, we believe the 3Q results reflect that KAR is well executing on the initiatives within its control, specifically improving its cost structure and transforming to a pure digital auction model.Looking further ahead, she adds, delinquencies and defaults for auto loans and leases have increased and we believe will serve as a meaningful volume tailwind in 2021 as repo activity resumes. Additionally, repo vehicles generally require ancillary services which should yield higher RPU. This supply influx should also help moderate the used pricing environment and drive dealers to fill up their lots, which remain at three-year lows from an inventory standpoint.In line with these comments, Benjamin sets a $32 price target, implying a high 71% one-year upside potential to the stock, and rates KAR as a Buy. (To watch Benjamins track record, click here)Wall Street generally is willing to speculate on KARs future, as indicated by the recent reviews, which split 5 to 1 Buy to Hold, and make the analyst consensus view a Strong Buy. KAR is selling for $18.61, and its $24.60 average price target suggests it has room to grow 32% from that level. (See KAR stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that unites all of TipRanks equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Byron Wien Says S&P 500 Will Tumble Before Rallying to 4,500 - Yahoo Finance

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