10 Secret Stocks Top Investors Are Betting On

Top Investor Stock: Tesla (TSLA)

Top Investor Stock: Tesla (TSLA)

Tesla’s big ambitions and disruptive potential have clearly struck a chord with top investors. This volatile auto stock boasts a “Very Positive” investor sentiment. Over the last 30 days, the best-performing investors have increased their TSLA exposure by no less than 10.8%.

But the Street does not share this optimism — quite the contrary. Right now, the stock has a hold analyst consensus rating with only six recent buy ratings. This is versus eight hold and nine sell ratings. Meanwhile, the $309 price target suggests big downside potential of 10% from the current share price.

Top Jefferies analyst Philippe Houchois has just slashed his 2018 revenue estimate for Tesla by 14%. He has also cut his fiscal 2018 Model 3 delivery forecast by 35% to just 175,000 units. In a bearish report (entitled “Another Curve Ball”) the analyst reiterates his “sell” rating and $240 price target (30% downside).

And he isn’t feeling overly impressed by CEO Elon Musk’s new merit-based compensation package. Houchois says the new deal sends “mixed messages” and is “overly incentivized on valuation multiples rather than financial performance.”

Top Investor Stock: Allergan (AGN)

Top Investor Stock: Allergan (AGN)

Irish based Allergan Plc. (NYSE:AGN), maker of Botox, has a “Very Positive” signal from top-performing investors. Indeed, top investors have upped their exposure to this pharma giant by almost 3% over the last 30 days. Plus, investors who hold AGN on average dedicate 4.3% of their portfolio to the stock.

Perhaps these top investors are onto something. We can see that Barclays’ Douglas Tsao has just upgraded Allergan from “hold” to “buy.” The move comes with a bullish $230 price target (28% upside) up from $220 previously. Tsao’s shift in sentiment, after over three years on the sidelines, comes from the company’s market-leading Botox position. A survey of physicians revealed that patients are much more satisfied with Allergan’s Botox than rivals Dysport and Xeomin.

Overall the stock has a cautiously optimistic “Moderate Buy” analyst consensus rating. These analysts (on average) see the stock rising 18% to hit $212 in the coming months.

Top Investor Stock: Apple (AAPL)

Top Investor Stock: Apple (AAPL)

Top investors still have faith in the market-leading power of iPhone maker Apple Inc.(NASDAQ:AAPL). Both in the last week and in the last 30 days, top investors have upped their Apple shareholdings (by 0.5% and 3.9% respectively). Plus Apple tends to make up a considerable chunk — 9% — of these portfolios.

However, the Street is not quite as bullish on AAPL stock as it used to be. The consensus is no longer “Strong Buy” but “Moderate Buy.” Analysts believe iPhone X sales peaked early and say Apple will guide for a lower March quarter than previously expected.

With this in mind, top Atlantic Equities analyst James Cordwell downgraded AAPL to “hold” with a $190 price target. He explains:

“This better than anticipated supply means that a greater proportion of demand was able to be served in the December quarter, leaving March quarter expectations (which were predicated on significant pent-up demand) for ~20% iPhone unit growth now looking somewhat aggressive (~20% iPhone unit growth).”

Top Investor Stock: Applied Materials (AMAT)

Top Investor Stock: Applied Materials (AMAT)

I am very bullish on chip equipment maker Applied Materials, Inc. (NASDAQ:AMAT). And I am not alone. Top investors are also piling into the stock, which also has 100% Street support right now. Indeed, in the last three months, no less than 11 analysts have published buy ratings on AMAT. Most promisingly, their average price target of $69 indicates upside potential of over 28%.

The No. 2 analyst on TipRanks, B.Riley FBR’s Craig Ellis has just met with AMAT management. He left the “upbeat” session with renewed conviction. Ellis explains why here: “We expect Memory spending sentiment to improve through 2018, and with that, we expect large-cap Semi Caps like AMAT (and KLAC and LRCX) to enjoy multiple expansion even as sell-side EPS grind higher.”

As for AMAT specifically, he says “AMAT’s vast portfolio breadth and large revenue scale positions mgmt well to frame industry spending potential and we sense CFO Durn remains justifiably upbeat.” Indeed, Ellis’ $71 price target indicates big upside lied ahead of 28%.

Top Investor Stock: Netflix (NFLX)

Top Investor Stock: Netflix (NFLX)

Netflix, Inc. (NASDAQ:NFLX) has just experienced a beautiful quarter. The company posted very strong earning results for Q4, suggesting that 2018 is going to be a key inflection year. And we can see from the screenshot above that investors love NFLX stock as much as they love its content. Not only are investors seriously upping their NFLX holdings, they also dedicate a relatively big portfolio proportion to this stock (4.9%).

A slew of price target increases show that the Street is also growing increasingly bullish on Netflix’s potential. Currently, the stock has a “Moderate Buy” analyst consensus rating.

Top RBC Capital analyst Mark Mahaney just ramped up his price target to $300 (11% upside potential). He says: “We believe secular demand for internet TV is ramping rapidly globally, and Netflix has positioned itself extremely well to benefit from this, with a compelling value proposition to consumers.”  He notes that the company’s guidance for Global Streaming Revenue of $3.59B in Q1 2018 implies very impressive 43% Y/Y growth.

Top Investor Stock: First Solar (FSLR)

Top Investor Stock: First Solar (FSLR)

Top investors are snapping up First Solar, Inc. (NASDAQ:FSLR) stock — with shares up a whopping 118% over the last year. Indeed, this solar panel maker represents a savvy tax play according to Roth Capital’s Philip Shen. U.S. President Donald Trump looks set to impose a new 30% tariff on fully assembled solar panel imports from abroad. As a U.S. manufacturer, First Solar’s panels will be exempt from these new import taxes. The result: a golden opportunity for FSLR to boost U.S. sales and margins.

Apparently First Solar is already seeing sales soar as utility customers rush to complete orders before the tariff imposition.

From a Street perspective, this “Moderate Buy” stock has only 10% upside ahead. However Shen’s $80 price target suggests a more agreeable 19% growth potential.

Top Investor Stock: Incyte (INCY)

Top Investor Stock: Incyte (INCY)

Investors aren’t giving up on pharma stock Incyte Corporation (NASDAQ:INCY) anytime soon. Shares may be down 20% in the last three months, but the stock is still trending high with the market’s top players. We can see that these investors are happy to take a low speculative position and see what unfolds.

The pharma sells Jakafi for bone marrow disorders and boasts a deep and promising pipeline, leading to sustained takeover speculation.

Luckily best-performing analysts are also very bullish on INCY, with seven recent buy ratings. Given the pullback in prices, these analysts now see the stock spiking a massive 60% to $150 in the year.

Take five-star Leerink analyst Michael Schmidt. He believes that concerns over Incyte’s cancer treatment epacadostat, its most advanced late-stage pipeline candidate, are overblown. INCY is developing epacadostat with Keytruda. He is reassured by management confidence in recent data and, as a result, reiterated his buy rating earlier this month.

Top Investor Stock: Nvidia (NVDA)

Top Investor Stock: Nvidia (NVDA)

With Nvidia Corporation (NASDAQ:NVDA) shares exploding by an incredible 125% in the last year, it’s no surprise that top investors are feeling super bullish. In the last 30 days alone, the number of top portfolios holding NVDA is up by 4.4%. Not only that, these investors dedicate a sizable portion (almost 8%) of their portfolio to this fast-growing chip stock.

However, Susquehanna analyst Christopher Rolland isn’t convinced that the party can last. He calculates that NVDA benefited from approx. $500 million Ethereum-related GPU sales in Q4. This would boost Q4 results and near-term guidance. But ultimately, he sees substantial longer-term risks resulting from this unsustainable mining profitability.

In contrast, Vivek Arya — a five-star analyst — singles out Nvidia as a top pick. He ups his price target to $275 (11% upside). Arya believes there is 1) a large-scale upgrading opportunity 2) continued strength in crypto and 3) upside in high-performance computing. Note that Arya’s approach is paying off with an eye-dropping 94% success rate and 102% average profit across his NVDA stock ratings.

Top Investor Stock: Boeing (BA)

The world’s largest aerospace company, Boeing Co (NYSE:BA) has a “Very Positive” top investor sentiment right now. But with shares on a tear this year, upside potential seems relatively limited (according to the Street’s average price target). However, the stock does boast a “Strong Buy” analyst consensus rating. And top Cowen & Co analyst Cai Rumohr isn’t backing down anytime soon. He has just ramped up his price target from $320 to $415 (22% upside potential).

According to Rumohr: “Strong demand, a favorable production outlook, and above-average est. Tax Act benefits suggest 2018 CFPS [cash flow per share] near $23, ramping to $28 by 2020.” He explains that the $415 price target is based on a 2018 cash flow yield of 5.5%; and — the best part for investors — adds “we can envision a $455 potential valuation on 2019 cash flow.”

Top Investor Stock: Alibaba (BABA)

Chinese e-commerce king Alibaba Group Holding Ltd (NYSE:BABA) ticks all the boxes. Both top investors and the Street love this fast-growing stock. In fact, in the last eight months, BABA has received 100% buy ratings from the Street. And even with the stock soaring, analysts still see further upside potential ahead. Five-star Oppenheimer analyst Jason Helfstein has a $230 price target on BABA (7% upside).

He explains why he is such a fan of BABA here: Alibaba remains one of our top picks in our coverage universe as the company continues to execute well in driving growth in core commerce, with a strong opportunity to improve monetization.”

Indeed, Helfstein sees big potential for Alibaba’s online-offline Hema retail stores. Customers can shop, dine and order grocery delivery from their mobile phones in-store and use Alipay to pay.

Helfstein anticipates Alibaba having 30-40 of its Hema stores in each of China’s major cities. This is a big deal when each hypermarket can serve up to roughly 50k consumers.

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Source: Investor Place

3 Companies Working to Destroy the Blockchain with Quantum Computing

It pays sometimes to listen what comes out of the annual meeting of the world’s elite at Davos, Switzerland. This year was a prime example.

Satya Nadella, the CEO of Microsoft (Nasdaq: MSFT), gave the stark warning that the world is rapidly “running out of computing capacity”. He added that Moore’s Law – the maxim that the power of computer chips doubles every two years – is “rapidly running out of steam.”

Nadella said the problems the world faces today need superfast quantum computers to solve them. As the head of the company’s quantum computing team, Todd Holmdahl, said to the Financial Times, “We have an opportunity to solve a set of problems that couldn’t be solved before. On a classical computer, they would take the life of the universe to solve.”

This is breakthrough technology that will change our world, making quantum computing (a subject I’ve touched on previously) a topic worth revisiting.

Related: Here’s Where to Invest in The Promise of Quantum Computers

Quantum Computers

Building a quantum computer has stumped scientists and engineers for about 35 years due to the complicated physics involved.

Qubits – the basic units of quantum information – are highly susceptible to ‘noise’ and therefore error. For qubits to be useful, they must achieve both quantum superposition (a property something like being in two physical states [0 and 1 in computing] simultaneously) and entanglement (a phenomenon where pairs of qubits are linked so that what happens to one can instantly affect the other, even when they’re physically separated). These delicate conditions are easily upset by the slightest disturbance, like a slight vibration or a fluctuating electric field.

Quantum computers will be particularly suited to factoring large numbers (making it easy to crack many of today’s encryption techniques and probably providing uncrackable replacements), solving complex optimization problems, and executing machine-learning algorithms. And there will be other applications no one has yet even thought about.

The cracking of encryption techniques may even push current blockchain technologies to the dustbin of history quickly. More on that later.

Until now, scientists have only been able to build fully programmable five-qubit computers and more fragile 10- to 20-qubit test systems. Neither kind of machine is capable of much. But the head of the quantum computing effort at Alphabet (Nasdaq: GOOG), Harmut Neven, says his team is on target to build a 49-qubit system perhaps within a year.

That would be close to the minimum target set by scientists of around 50 qubits. This 50 qubit target isn’t an arbitrary one. It’s a threshold, known as quantum supremacy, beyond which no current supercomputer would be capable of handling the exponential growth in memory and communications bandwidth needed to simulate its quantum counterpart. In other words, the top supercomputer systems can currently do all the same things that five- to 20-qubit quantum computers can do, but at around 50 qubits this becomes physically impossible.

The Threat to Blockchain

Before I tell you about some of the breakthroughs in quantum computing coming from the likes of Microsoft, let me first fill you in on the greatest threat to blockchain out there. It’s not regulations, it’s quantum computers. Let me explain…

Much of the allure of blockchain comes from its security benefits. The technology allows a ledger of transactions to be distributed between a large network of computers. No single user can break into and change the ledger, making it both public and secure.

Public key cryptography uses a pair of keys to encrypt information: a public key which can be shared widely and a private key known only to the key’s owner. Anyone can encrypt a message using the intended receiver’s public key, but only the receiver can decrypt the message using their private key. The more difficult it is to determine a private key from its corresponding public key, the more secure the system is.

Even if today’s supercomputers tried to figure out what the private key is, it would take it an estimated 785 million times longer than the age of the universe. In other words, it’s impossible. But with quantum computers possibly 100 million times faster than classical computers, they could possibly break today’s public key cryptography, rendering the blockchain technology that relies open to hacking and obsolete.

So naturally research into quantum-resistant cryptographic systems has already begun at places like the National Security Agency (NSA). But I doubt these systems will be available before the advent of quantum computers.

Breakthroughs Around the Corner

That is thanks to efforts from companies like International Business Machines (NYSE: IBM), Google and Microsoft, which make quantum computers likely and commercially viable within several years. Previous estimates were that quantum computing was still decades away.

But two impending milestones – from Microsoft and Google – will show that the frontiers of theoretical physics are quickly being turned into practical reality. Google’s revelation involves that aforementioned machine that will be the first demonstration of quantum computer solving a problem that is at the very limit of what is possible for a classical computer.

IBM has been a pioneer in the field and actually achieved a working qubit in 1998. It announced in December a long list of partners to help it develop practical applications for the technology. The partners include a number of universities, government research institutions and major companies, such as JPMorgan.

I would say that IBM is ahead of Google in that it has already programmed a supercomputer to simulate a quantum machine with more than 50 qubits. A feat, I might add, most did not think was possible.

Both Microsoft and IBM are offering simulations of quantum computers that run on today’s “classical” machines, while IBM is also giving its partners access to a rudimentary quantum system.

Microsoft’s Different Approach

Now let’s focus on Microsoft, which began working on producing a working qubit (quantum bit) 12 years ago. And now finally, it is “imminently close” to announcing that it has reached that goal.

I find Microsoft the most interesting of the three leaders in quantum computing because of the unique approach it is taking. It apparently has developed a type of qubit that effectively fragments electrons. That means the same piece of information is held in multiple places at the same time. If one part of the qubit goes through quantum decoherence, the information it contained is not lost.

This will likely lead to a more stable system than its competitors’ systems. Microsoft will likely need only one qubit compared to 1,000 or 10,000 (mainly unstable) qubits.

For me, if Microsoft does indeed reveal that working qubit, it will place them ahead in the race for quantum computing supremacy. It would be my choice as a major future beneficiary of quantum computing.

But don’t forget about Google and IBM, as well as Intel and the Canadian private firm, D-Wave Systems. All are working on developing the leading computing technology.

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Source: Investors Alley