Investors want to believe that last year’s bearish run has ended, but it’s very hard to tell where the markets are headed next. Add to this the increasing conviction, measured in polls of both economists and the general public, that the US is headed for a recession this year, and we can see why the average investor is worried about where to put his money.
We need a reliable tool, then, to cut through the market noise and give each stock a clear pointer. The Smart Score does this, gathering the reams of raw market data on thousands of stocks, measuring it against 8 factors all known to match up with future outperformance, distilling the whole thing down to a simple score on a scale of 1 to 10. A ‘Perfect 10’ score shows a stock whose ducks are in a row, and deserves some closer scrutiny.
So let’s open the TipRanks database and look up some ‘Perfect 10’ stocks. The data shows that these top-rated names get Strong Buy ratings from the Street, and boast plenty of upside for the year ahead. Here’s a closer look, presented along with comments from the analysts.
Asure Software, Inc. (ASUR)
Up first is Asure Software, a company focused on human capital management, HCR, for small- and mid-sized enterprises. This target customer base has historically been the driver of jobs growth in the US economy, but it has a weakness; these companies typically don’t have the manpower or expertise to manage human resource matters quickly and effectively. Asure offers software packages, resources, and solutions that allow its customers to grow, with scalable HR solutions and manageable IT infrastructure.
By the numbers, Asure can boast having more than 100,000 clients, which themselves employ more than 1.7 million people. Asure provides them with the HCM services they need, and does so from the micro-cap category of public firms – Asure has a modest market cap of $270 million, and claims some 500 employees.
This company saw a surge in its stock price over the past year, with ASUR shares gaining over 118% in the last 12 months. This far outpaced the S&P 500, which is down almost 3% over the same period. These share gains have come hand-in-hand with strong financial performances. In the last reported quarter, 4Q22, Asure showed company records on both the quarterly and full-year revenue lines. The 4Q top line was reported at $29.3 million, for a 39% year-over-year gain and beating expectations by $5.5 million; the full-year number came in at $95.8 million, up 26% y/y.
Turning to the bottom line, Asure reported a non-GAAP earnings per share of 17 cents, where the Street had expected a simple break-even.
Scanning the firm’s prospects, Northland’s 5-star analyst Greg Gibas thinks Asure has plenty going for it and believes the shares are still undervalued.
The 5-star analyst initiated his coverage of the stock recently with an Outperform (Buy) rating, saying of the company, “We like ASUR’s diverse and growing client base, recurring revenue, strong retention, and well-aligned management team. As ASUR continues to scale and consequently improve its margin profile, we believe the stock’s valuation multiple will close the gap relative to peers… We like that Asure is able to retain its client base over time with an average client stay of ~8-10 years. This has allowed the company to recognize annualized recurring revenue of ~92%.”
In addition to his positive rating, Gibas gave ASUR a $19 price target, implying a one-year upside of 44%. (To watch Gibas’ track record, click here)
Asure Software has earned a unanimous Strong Buy rating from the Street’s analyst consensus, based on 7 recent positive reviews. The stock is trading for $13.34, and its $18.33 average price target suggests a gain of 37% for the next 12 months. (See ASUR stock analysis)
DICE Therapeutics (DICE)
Now we’ll switch over to the biopharma realm, and look at DICE Therapeutics. This clinical-stage drug researcher is working on new therapeutic agents for autoimmune and inflammatory conditions, with a particular initial focus on the treatment of psoriasis. The company uses its proprietary development platform, DELSCAPE, to discover and advance novel, orally dosed small-molecule drug candidates suitable to address chronic immunological diseases.
Currently, DICE has several drug candidates at the pre-clinical stages, and work is being done on the treatment of conditions ranging from inflammatory bowel disease and fibrosis to immune-oncological diseases. One program, however, has entered the clinic for human trials, and deserves a closer look.
Its lead candidate is DC-806, an IL-17 antagonist. IL-17 is a pro-inflammatory signaling molecule, and has been confirmed as a validated target for therapeutic agents in the treatment of psoriasis and other inflammatory diseases. The company is investigating this drug as an orally dosed agent to treat psoriasis, and described -806 as the leader in an ‘Oral IL-17 Franchise.’
On -806’s clinical side, DICE has published positive proof-of-concept data from a Phase 1 study, and a Phase 2b trial is scheduled to begin in 2H23. In addition, DICE has begun a Phase 1 trial of a related IL-17 antagonist drug candidate, DC-853, in the UK, and expects to release top line data in 2H23.
In his coverage of DICE, Needham analyst Serge Belanger notes several factors to rely on here, including the multiple catalysts in the near future and a strong financial base. In his words, “DICE’s key value driver is DC-806’s potential in psoriasis and other immune diseases. Readout of DC-806’s ph 2b trial, the next significant valuedriving catalyst, is expected in 2H24. More near-term catalysts incl. an R&D day in 1H23, and ph 1 results for DC-853 (2nd-gen oral IL-17 antagonist) in 2H23. DICE ended 2022 with cash of $574MM and no debt, which we expect to provide runway past the ph 2b trial readout and into 2026.”
These comments back up Belanger’s Buy rating on the shares, and his price target, set at $56, implies a gain for the stock of 72% on the one-year time frame. (To watch Belanger’s track record, click here)
There are only 5 recent analyst reviews on file for this stock, but they are all positive – for a unanimous Strong Buy consensus rating from the Street. The shares are trading for $32.5 and have an average price target of $63, which together suggest a 12-month upside potential of 94%. (See DICE stock analysis)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a 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.
