Sometimes a company’s debut or the release of a new product can stir analysts into a frenzy. Other times, careful consideration of long-term trends and performance can drive improved public opinion of a company’s prospects. In such cases, the resulting market conditions offer stocks with analyst recommendations that simply cannot be ignored.
That’s because the process of determining which stocks to buy can often be subject to emotions and hype. This pitfall is possible for both institutional analysts and retail investors I like. One way to hedge against these potential hype trains is to understand the underlying purpose as to why analysts may reach a consensus on a specific security.
By performing individual analyses based on mathematical factors such as price-to-earnings ratios or market growth extrapolations, investors filter out emotion. Ultimately, it comes down to two factors: how much risk you can stomach, and making sure you only invest in what you understand.
IQVIA Holdings (IQV)
Aiming to solve one of the biggest hurdles in the biotech center, IQVIA Holdings (NYSE:IQV) presents a new way to profit from the biotech industry. Specifically, the company focuses on creating frameworks both from a population and analytical perspective for companies to undergo regulatory trials. This allows biotech companies to outsource their testing process and procedures to IQVIA and significantly reduce the costs of performing regulatory trials
Moreover, the company can leverage its experience in analytics to apply it to various projects that may have structural overlap. One such example is the company’s 4,600 data scientists and 1,300 medical doctors who work together to consistently perfect the process of medication testing.
IQVIA’s future looks even brighter when, because of all of these methodologies and records, the company accrues from providing testing services, enabling it to become even more efficient on future projects. This has allowed the company to develop over 30 different predictive disease detection solutions while growing the company’s financial strength in parallel.
Synopsys (SNPS)
Analysts have been buzzing about Synopsys (NASDAQ:SNPS) in recent months, partly due to the company’s low-cost business model proving incredibly lucrative. As a designer of silicone boards for microchips, the company has been able to capitalize on licensing its designs and its supporting software. This makes the true value of Synopsys its intellectual properties rather than any one specific product.
Synopsys has been among the most talked about stocks with analyst recommendations supporting its earning potential since its Q1 earnings report for 2024. The company was able to increase revenue by 21.15% year-over-year to $1.65 billion while also raising its net income by 65.40% to $449 million. Since then, major publications like Kiplinger and Morningstar have been bullish about the stock’s potential future value.
From my perspective, SNPS could be incredibly lucrative should the advances in AI keep rolling out, as many of its major revenue drivers rely on the technology’s adoption.
Amazon (AMZN)
You don’t have to be an analyst to understand why Amazon (NASDAQ:AMZN) has been so exceptionally popular lately. From its continuous growth and vertical processes to its commitment to constantly expanding into new industries, the company has maintained a steadily rising share price for years.
Yet, the bullish opinions are more related to Amazon’s future position as a cloud computing giant as the world becomes ever more connected. I have also recommended Amazon several times in the past and continue to see the company as a stable investment. In my eyes, the company has exceptional diversification on its technological side, with the Amazon Web Services division reporting consistent growth year-over-year.
These kinds of decisions are indicative of a company that will continue to perform well into the future since it touches so many different business sectors and individuals. As such, it’s easy to understand why Amazon is one of the best stocks with analyst recommendations so unanimously positive.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
