Taking a Page Out of Wall Street’s Top Analyst’s Investment Book

When you’re looking for strong investments that will protect your resources and provide returns, even during these crazy coronavirus days, take a cue from Wall Street’s best analyst. Brent Bracelin, of the Piper Sandler research firm, rates 5 stars from TipRanks – but even better, he currently holds the #1 spot out of 6,815 analysts in the TipRanks database.

Bracelin has earned his high rating by compiling a record of success in a difficult business – reviewing and rating the Street’s favorite stocks, and doing so for the public view. Bracelin has build up an 82% success rate, hitting the mark better than 4 times out of 5, and he’s brought in an average return of 34.9%. There are a few analysts who can match his success rate – but none that match his average return.

For investors seeking winning equities, following Bracelin’s reviews is a viable strategy. And here are some of his recent picks, “Strong Buy” stocks that he sees as winners despite the pandemic.

GoDaddy (GDDY)

The popular web hosting company, which saw $2.9 billion in revenues last year, managed to weather the pandemic storm successfully. While shares dropped sharply in February/March, GDDY had recovered well by mid-June. The end of that month, however, saw a 13% decline after the company’s June 24 restructuring announcement.

The announcement made public the company’s plans to cut costs, and will impact over 800 employees. While the restructuring plans, coming during a week of market pullbacks, spooked investors, GoDaddy also revised its Q2 revenue forecast – upward, by 1%. The previous outlook was for $790 million; the revision would add $7.9 million to that.

We’ll find out on August 5 if the new forecast is on target. In the meantime, note that GoDaddy beat the estimates in Q1, reporting 24 cents EPS, 33% above expectations. Revenue in Q1 hit $792 million, so the new target is definitely in-line with possibilities.

Bracelin is impressed with GoDaddy, writing, “GDDY presents favorable risk-reward, in our view, as digital tailwinds rise and potentially accelerate the company’s model transformation to broaden its software product portfolio beyond domain services to web design and marketing applications.”

In line with this outlook, the top analyst rates GDDY an Overweight (i.e. Buy) along with an $82 price target. His target suggests the stock has room for 19% growth in the coming year. (To watch Bracelin’s track record, click here)

In addition to a thumbs up from Wall Street’s top analyst, GoDaddy holds a unanimous Strong Buy rating from the analyst consensus – no fewer than 11 Buy reviews have come in for the stock. Shares are selling for $68.61, and the $86.18 average price target implies a one-year upside of 26%. (See GoDaddy stock analysis on TipRanks)

Anaplan, Inc. (PLAN)

Next on today’s list is Anaplan, a cloud software company offering business-oriented panning software. The company’s platform allows connections between people, data, and plans, making complex scenario modeling possible.

Like many cutting-edge tech companies, Anaplan has been operating at a net loss, and has withdrawn its full-year 2020 guidance numbers. At the same time, the company has been beating earnings forecasts. In the last quarter (fiscal Q1 2021, covering most of calendar 2020 Q1), the company reported a 10-cent per share loss, better than the 14 cents expected. Revenues, at $103.8 million, were up 37% year-over-year.

The earnings results were in line with the previous five quarters, and are expected to remain at this level in fiscal Q2. Share performance hasn’t matched the earnings, however. The stock crashed with the rest of the markets during the winter, and have underperformed during the market recovery. PLAN is still down 16% year-to-date.

Brent Bracelin is unabashedly upbeat on PLAN, stating bluntly, “Buy on weakness.” Describing the stock as a long-term opportunity, Bracelin writes, “[We] continue to view PLAN as a differentiated cloud software application with a compelling value proposition of providing real-time planning and digital agility… we remain bullish that growth potential could improve based on the post-COVID opportunity to enable real-time planning required for the modern digital enterprise.”

Bracelin backs his Overweight (i.e. Buy) rating with a $51 price target, implying an upside of 16% for the coming year. (To watch Bracelin’s track record, click here)

Overall, PLAN’s Strong Buy consensus rating is based on an impressive 10 Buys, indicating confidence in the stock. Only three analysts rated it a Hold, and even they see some upside to the stock. The average price target of $52.75 implies a 20% upside potential from the current share price of $43.98. (See PLAN stock analysis on TipRanks)

Avalara, Inc. (AVLR)

Our last stock from Brent Bracelin’s notebook is Avalara, a cloud-based company providing tax compliance software. This is a vital niche, as tax law only grows more complex over time, as Congress tweaks provisions and the various states add their own regulations. The result is a code that everyone must comply with, but is too complex for most individuals and small businesses, and a burgeoning tax compliance industry.

Avalara, which went public two years ago, offers products for a variety of uses: individual returns, excise and communications taxes, even cross-border tax applications. The necessity of the products can be judged by the share performance since the IPO: AVLR now trades for more than 6x its IPO value. Looking at the chart of the stock’s performance over the past two years, the coronavirus crisis appears as a blip.

Piper Sandler’s Bracelin reviewed this stock and is clearly impressed, saying, “AVLR safely navigated CV19 disruptions during 1Q20 delivering $3M of revenue upside on 31% growth… The need to automate manually intensive back-office systems using modern cloud software could materially expand in the post-CV19 world.”

Noting the company’s ability to expand product offerings to meet customer needs as they develop after the pandemic, the analyst wrote: “[We are] impressed by an aggressive product roadmap with six new products scheduled to be released this year as part of a broader multi-product strategy augmenting the core Calculations and Returns business. Three of the six new products stood out to us as having the most potential to have a material impact on 2021 growth prospects…”

To this end, Bracelin rates AVLR an Overweight (i.e. Buy) along with a $138 price target. This figure implies an 11% upside from current levels. (To watch Bracelin’s track record, click here)

Avalara is another Strong Buy stock with a unanimous analyst consensus rating. PLAN has received 11 Buy reviews in recent weeks. The stock has an average price target of $140.09, which suggests a one-year upside of 13% from the $123.93 current trading price. (See Avalara’s stock-price forecast on TipRanks)

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