The S&P 500 (
SPX
) just had its
best week of 2023, as it gained about 5.9%. Nonetheless, there are a few S&P 500 stocks (not the same old big-tech stocks) that, according to analysts, still have plenty of upside potential. The three S&P stocks with the highest upside potential are Bio-Rad Laboratories (
NYSE:BIO
), Albemarle (
NYSE:ALB
), and Moderna (
NASDAQ:MRNA
).
Let's take a look at them below using TipRanks' Comparison Tool.
Bio-Rad Laboratories (NYSE:BIO)
As you can see above, the S&P 500 stock with the highest upside potential is BIO, as analysts expect it to gain almost 84% in the next 12 months. It also has a Strong Buy rating since all four analysts covering the stock are bullish on it. Bio-Rad Laboratories makes and sells products for scientific research and healthcare labs to conduct tests and experiments in fields like medicine and biology. The stock is
down 33% YTD.
Albemarle (NYSE:ALB)
Albermarle also has high upside potential (81.3%), according to analysts. The company produces a wide range of specialty chemicals for various industries, including electronics, construction, and pharmaceuticals, with a focus on lithium compounds for batteries, bromine for safety applications, and catalysts for oil refining. ALB is a giant in the lithium mining industry, and Elon Musk says, "
Lithium batteries are the new oil," so this is a stock worth checking out. It's
currently down 41.6% YTD.
Moderna (NASDAQ:MRNA)
Lastly, we have Moderna, which most investors are probably familiar with. Moderna is a biotech firm that creates vaccines and treatments for various diseases by using mRNA technology. The stock has fallen by
over 56% YTD. As a result, analysts expect it to rebound by 68.6% over the next year.
The Takeaway
While the S&P 500 just had its best week of 2023, and the index itself is up about 15% for the year, the three stocks mentioned above are all down significantly this year. Yes, these stocks have the potential to be bargains because of their low share prices (and optimistic analyst price targets), but it's important to recognize that they can still continue much lower before
maybe rebounding. Nonetheless, these stocks are worth looking into for risk-taking investors.
Disclosure
Shares of SoFi Technologies (NASDAQ: SOFI) popped 16.6% this week, according to data from S&P Global Market Intelligence. The financial technology upstart and consumer bank posted strong growth across the board in the third quarter, which investors applauded. However, the company
A 35-year-old sea turtle refuge in Acapulco is fighting for its life after the most powerful hurricane on record to strike Mexico's Pacific coast tore it apart last week.
So far, General Motors (
NYSE:GM
) stock is still down for the year. Yet, after a historic deal with a major autoworkers' union, General Motors could get back into the fast lane. There's still a long road ahead, but I feel that October marked the bottom for GM stock, and I'm definitely bullish on it now.
General Motors is a well-known American automaker with operations in Detroit, Michigan. Speaking of Detroit, that's been the epicenter of controversy and press coverage during the past several weeks.
Along with Ford (
NYSE:F
) and Stellantis (
NYSE:STLA
), General Motors rounds out the Detroit Three group of American automotive giants. However, these giants were in trouble due to a widespread worker walkout. Nevertheless, it looks like General Motors will survive the ordeal bruised but certainly not out of commission.
October was a Bumpy Ride for General Motors
To put it mildly, October wasn't General Motors' best month. First of all,
GM stock continued its downward slide that began in July.
On the other hand, with reduced prices, there is also opportunity. Believe it or not, General Motors now has a GAAP trailing 12-month price-to-earnings (P/E) ratio of just 4.1x. That's a lot lower than the already reasonable sector median P/E ratio of 15.3x.
Still, it's painful to watch the shares of an iconic American automaker lose so much value so quickly. Furthermore, in October, General Motors' robotaxi company, known as Cruise, completely halted operations of its driverless vehicles in the U.S. Reportedly, this occurred because regulators in California ordered Cruise to remove its driverless cars from the state's roadways due to safety concerns. Of course, this represents a setback for General Motors.
In addition to all of that, there was the United Auto Workers (UAW) walkout and strike in October. This hindered the operations of the Detroit Three Automakers, including General Motors. The company's executives claimed that the UAW strike had cost General Motors $200 million per week. Moreover, the financial impact was so great and so uncertain that General Motors ended up withdrawing its profit guidance for 2023.
At Last, General Motors Strikes a Deal
If the UAW strike of October 2023 was history-making, then so was its resolution. Just recently, all of the Detroit Three automakers have reached
tentative agreements to end the autoworkers' strike.
The agreements are historic because they provide for large pay increases for the workers, assuming the UAW members vote to approve the deals (which I suspect they probably will). Recent reports suggest that General Motors' autoworkers will likely receive pay raises of around 25%.
This will be financially costly for General Motors, but not nearly as costly as allowing the strike to continue. In time, I expect General Motors to resume its practice of providing full-year profit forecasts. The situation will return to normal, or at least a version of the "new normal."
Also, investors shouldn't dismiss
General Motors' third-quarter 2023 results. Sure, the company withdrew its full-year profit outlook, but General Motors also posted top- and bottom-line beats. Specifically, GM reported $44.1 billion in
revenue, nearly $1 billion higher than the analyst consensus forecast. Additionally, the company's adjusted earnings of $2.28 per share easily outpaced
Wall Street's estimate of $1.87 per share.
Now, the bullish argument for GM stock is starting to make a lot of sense. Barclays (
NYSE:BCS
) analysts
upgraded General Motors shares from Equal Weight to Overweight, citing a “historically cheap” valuation. After a terrible October, perhaps November and December will be a lot easier for General Motors and its shareholders.
Is GM Stock a Buy, According to Analysts?
On TipRanks, GM comes in as a Moderate Buy based on 11 Buys, five Holds, and one Sell rating assigned by analysts in the past three months. The
average General Motors price target is $44.71, implying 50.2% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell GM stock, the most accurate analyst covering the stock (on a one-year timeframe) is
Ryan Brinkman of JPMorgan Chase (
NYSE:JPM
), with an average return of 14.25% per rating and a 63% success rate. Click on the image below to learn more.
Conclusion: Should You Consider GM Stock?
It really does feel like things can only get better for General Motors now. Remember, one rough month doesn't need to define the entire year for a company.
Looking ahead, General Motors will have to make some financial adjustments in order to pay its workers higher wages. Will the consumers accept higher car prices? Only time will tell.
At least we can affirm that General Motors has likely resolved its issues with the company's workers and can get back to the business of building and selling automobiles in huge quantities. So, if you can appreciate a rare value and a potentially epic comeback story in the making, I encourage you to consider GM stock.
Disclosure
Latin America and the Caribbean are poised for stronger growth in coming years, buoyed by Friday's agreement by the United States, Canada and 10 countries to strengthen regional supply chains, the head of the Inter-American Development Bank said.
Federal Trade Commission Chair Lina Khan found some cozy company over the course of a two-day trip through Silicon Valley this week as she looked to reverse her reputation for being a scourge of Big Tech.
It’s been a volatile year for Block (SQ) and PayPal’s (PYPL) stock with both of these fintech innovators hitting 52-week lows during the third quarter but posting strong Q3 results this week.
Federal Trade Commission Chair Lina Khan found some cozy company over the course of a two-day trip through Silicon Valley this week as she looked to reverse her reputation for being a scourge of Big Tech.
Manchester United forward Marcus Rashford's birthday party celebrations hours after the 3-0 defeat by Manchester City last weekend were "unacceptable" manager Erik ten Hag has said.
U.S. officials are making intense efforts to gain the release of hostages being held by Hamas militants in Gaza but there is no guarantee of success or a timeframe, a senior Biden administration official said on Friday.
Gaza health officials said 15 people were killed in an Israeli air strike on an ambulance that the military said targeted Hamas militants, and Washington's top diplomat was due to hear Arab demands for a ceasefire in a meeting on Saturday in Jordan.
Are you the type to gamble on a speculative stock? DraftKings (
NASDAQ:DKNG
) won't impress every investor, but the company's user growth points to a favorable reward-to-risk profile. So, while it's probably not appropriate for everyone, I am bullish on DKNG stock, and I won't be surprised if it continues today's bullish move.
DraftKings is an online sports betting company. One state and city at a time, DraftKings is wheeling and dealing its way into new revenue sources. For instance, the company just agreed
to launch an online sportsbook with the Passamaquoddy Tribe in Maine.
On the other hand, investors may be reluctant to invest in a sports betting company when persistent inflation is putting pressure on the economy. Just take a look at the data, though, and you'll surely be convinced that gambling isn't a dead business, and DraftKings could be your first draft pick for the season.
Why Some Investors Might Not Like DraftKings Stock
To be fair and balanced, I must acknowledge that DraftKings stock isn't appropriate for very risk-averse investors. I invite you to
look at its five-year chart.
As you can see, DKNG stock shot higher during the risk-on frenzy of 2020 and 2021, formed a classic bearish head-and-shoulders pattern, and then dove much lower. Back in the second half of 2020 and all of 2021, interest rates were low, and many stocks representing unprofitable startups soared.
Those days are in the rearview mirror now. Interest rates are high, and some startup businesses are being weeded out if they can't survive.
DraftKings is surviving, though. Granted, the company isn't currently profitable, and this fact might bother some investors. That's a personal call that you'll have to make based on your own risk tolerance.
At least we can say that DraftKings is improving its bottom-line results. Specifically, the company reported a third-quarter 2023 adjusted loss of
$0.35 per share. That's a substantial improvement over the
loss of $0.62 in the year-earlier quarter.
More Gamblers and More Revenue for DraftKings
Besides, there's more to DraftKings' growth story than an improving bottom line. For example, DraftKings reported an astounding 40% year-over-year increase in monthly unique players to 2.3 million in Q3 2023.
I guess this means people are willing to engage in online sports betting even when the prices of food, gasoline, and rent are high. As the experts have been saying all year long, the consumer is "strong" (i.e., people have irrational spending habits in America even if they have little to no savings).
I'm not here to judge people's spending patterns, though. As long as DraftKings is raking in revenue, DKNG stock still looks like a high-conviction pick.
Speaking of
revenue, DraftKings
generated sales of $789.9 million in 2023's third quarter. That's up by a whopping 57.4% compared to the year-earlier quarter's revenue. This result also beat the consensus estimate of $704.9 million.
Also, DraftKings' average revenue per monthly unique player in Q3 2023 was $114, up 14% year-over-year. Again, people are spending their paychecks to gamble with DraftKings, and that's not necessarily great for America, but it's terrific for DraftKings.
Is DraftKings Stock a Buy, According to Analysts?
On TipRanks, DKNG comes in as a Strong Buy based on 23 Buys, four Holds, and one Sell rating assigned by analysts in the past three months. The
average DraftKings stock price target is $37.28, implying 10.5% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell DKNG stock, the most profitable analyst covering the stock (on a one-year timeframe) is
Jordan Bender of JMP Securities, with an average return of 48.55% per rating and a 77% success rate. Click on the image below to learn more.
Conclusion: Should You Consider DraftKings Stock?
So, should investors spin the roulette wheel and take a chance on DraftKings stock? There's certainly a bullish argument to be made, as the American consumer is clearly "resilient" when it comes to spending money to gamble with DraftKings.
Yet, investors who can't tolerate volatility and risk probably shouldn't invest in DraftKings. If you don't mind spinning the wheel and trying your luck, though, then you might want to consider DKNG.
Disclosure
Many investors in cryptocurrencies and their related assets were sorry to see October fly away. For the most part, such investments rose powerfully in price during the month, melting away the latest crypto winter as if it never descended in the first place.