3 oversold stocks that could be primed for a comeback

Sometimes playing the stock market can be like playing with a toddler. You just have to make sure you remember how to play opposites. Or, as Warren Buffett said, “Be fearful when others are greedy, and greedy when others are fearful.”

It’s human nature to want to buy when prices rise – you’ve heard of FOMO. But you need to keep that impulse at bay, because the time to buy, as Buffett would explain, is when prices are falling. This is where you will find the real bargains.

The key is to find oversold stocks, those with depressed stock prices alongside healthy fundamentals. And to find them, we can check both the data and the experts.

We used the TipRanks database to pull the latest scoop on three stocks that are showing all the signs of overselling and encountering a profile: analysts on the street see them as strong buys, they are showing a strong rise, even in the triple digits . , and their stock prices are falling. Let’s dive into it.

AppLovin (APP)

We will start in the software sector. AppLovin is a platform for mobile app developers, offering tools to optimize app creation and marketing, at any scale. The platform also supports monetization and brings flexibility that app developers can use to their advantage. AppLovin also offers app publishing, advertising, and analytics services. The company’s total revenue is split approximately 2:1 between application revenue and software platform revenue.

The total top line is impressive. AppLovin posted total revenue of $793 million in 4Q21, the latest report released, for 56% year-over-year growth. Of that total, $247 million came from enterprise software revenue, while application revenue was $547 million. These higher figures led to a net profit for the quarter of $31 million, which represents a dramatic turnaround from the net loss of $19 million in the year-ago quarter.

Since its IPO a year ago, AppLovin has seen its revenue grow steadily — and the fourth quarter numbers, released last February, were record results for the company. For the full year of 2021, AppLovin’s growth was even more impressive: revenue grew 92% year-over-year to $2.8 billion, and annual net income was $35 million. was light years ahead of the $126 million loss recorded in 2020.

Despite strong numbers in recent quarters, equities suffered heavy losses on investor concerns about slowing growth (56% in Q4 vs. 90% in Q3). Additionally, the midpoint of AppLovin’s forecast for 2022 was $3.7 billion, below expectations, which were hoping for a forecast of $3.83 billion. Overall, AppLovin shares have lost 59% of their value this year.

That said, DA Davidson analyst Franco Granda likes the current setup and thinks AppLovin shares are well oversold.

“We highlight AppLovin as another company in our coverage that has been oversold over the past two months. Now that the company has achieved significant scale on its apps business, the focus is on growing the software platform which is poised to become the largest mobile AdTech ecosystem. The current sales valuation multiple of less than 6x EV/’22 is unsustainable, in our view, as it would be difficult to find other high-growth software companies with a financial profile approaching that of APP at similar multiples. The disconnect between price and trade trajectory presents a buying opportunity,” Granda explained.

These comments support Granda’s Buy rating on the stock, while its $100 price target implies a roughly 158% year-over-year upside. (To see Granda’s track record, Click here)

The bulls are clearly racing for this stock, as the 11 recent analyst analyzes include 10 to buy and only 1 to hold. The stock is selling for $38.64 and has an average price target of $95.45, indicating a 146% upside potential for the stock over the coming year. (See APP stock forecast on TipRanks)

Kinross Gold Corporation (KGC)

Next, Kinross Gold, is a mid-cap company – valued at $6.8 billion – with active mining operations in the major gold-producing regions of the United States, West Africa and Brazil. . But it also operates in Russia, which has exposed it to great risk from the Russo-Ukrainian war, resulting trade disruptions and sanctions against Russia. Shares of Kinross, which have fallen 28% in the past 12 months, have not been able to regain ground this year.

Closing out 2021, Kinross announced in February that it had met production targets from last year, with a total of 2.07 million ounces of gold brought to surface falling within the lower half of published guidance. for the year. This production brought Kinross free cash flow of $196 million for the year, including just over $100 million in 4Q21.

In order to end its exposure to Russian risk factors, Kinross announced on April 5 that it had reached an agreement to sell 100% of its Russian assets. The deal will see the buyer, Highland Gold, pay Kinross $680 million in cash.

Kinross has also reached an agreement to sell a large part of its Ghanaian assets. The company will sell its 90% stake in the Chirano mine to Asante Gold, for $225 million in cash and stock. The Ghanaian government will continue to own 10% of this mine. The move, announced April 25, allows Kinross to streamline operations.

This streamlining bodes well for the future. Kinross is heading for significant increases in gold ounce production over the next three years, forecasting 2.65 million in 2022 and 2.8 million in 2023. While the outlook for 2024 is 2.6 million, this remains higher than last year’s production. These production increases should fuel further free cash flow growth, allowing Kinross to continue to return cash to investors. In 2021, the company returned more than $250 million to its shareholders.

Analyst Jackie Przybylowski, who covers BMO Capital stocks, takes a bullish look at Kinross. He writes: “We continue to view Kinross as ‘oversold’ relative to Russian risk. The sale of these assets is mitigating much of the negative surplus the stock has faced since the start of the Russian conflict… We continue to see significant value from Kinross’ flagship mine, Tasiast, as well as Dixie (recently acquired with Great Bear), Bald and Round Mountain, Paracatu and other Kinross assets.

Przybylowski uses these comments to support an outperform (i.e. buy) rating on KGC shares, and his $10 price target suggests a year-over-year upside of around 88%. (To see Przybylowski’s track record, Click here)

Overall, 15 recent analyst analyzes were recorded for Kinross, split 11 to 4 in favor of Buys over Reserves and confirming the Strong Buy consensus view of Wall Street analysts. KGC is selling for $5.18 and its average price target of $7.81 implies an upside of around 51% next year. (See KGC stock forecast on TipRanks)

BioLife Solutions (BLFS)

We will end in the biotechnology sector, with BioLife, a company that provides services and support products to the pharmacological research sector. BioLife produces and supplies a range of cold rooms for cell and gene therapy companies, including cryopreservation storage units, bioconservation for blood storage and hypothermic storage and shipping racks. In addition to cold storage, BioLife also provides cell thawing media to reverse cryopreservation and allow samples to be used in research laboratories.

BioLife’s revenues have grown steadily since the second quarter of 2020, reflecting continued demand for cold storage and transportation in the bioscience industry. In the latest earnings report, for 4Q21, the company posted $37.3 million in revenue, up 153% from the fourth quarter of 2020. Breaking down this revenue total, BioLife has made $14.8 million from its cellular processing platform, $16.6 million from freezers. and thaw, and $5.9 million for its warehousing and warehousing service platforms.

While revenues were up, the company’s gross margin fell year-over-year from 50% to 15%. The company attributed the drop in margins to a shift in its product mix and a series of inventory write-offs after last year’s acquisition of rival Stirling. BioLife ended 2021 with $69.9 million in cash and is heading towards 2022 revenues of between $159.5 and $171.0 million. Achieving these revenue forecasts will mean growth of 34% to 44% in 2022.

Although BioLife’s trading results were generally strong, the company’s shares are down 65% year-to-date.

Stephens analyst Jacob Johnson likes what he sees in BioLife, saying, “When it comes to oversold small-cap growth stocks, BLFS is our best bet.”

Going into detail, Johnson writes: “While Stirling’s operational issues will likely weigh on 1H22 margins, we expect this headwind to bottom out in 4Q21. If BLFS can show sequential margin improvement, we think the stock will start to work. We believe these moving parts of Stirling have masked the otherwise strong performance of BLFS… In short, ex-Stirling BLFS continues to post results that highlight CGT’s end-market strength. With shares trading at 5x FY22 earnings (4x FY23) against a three-year average of 10x and a CYRX at 6.5x/5x, we believe BLFS shares remain too cheap.

Consistent with those bullish comments, Johnson gives BLFS shares a Buy rating, along with a price target of $47 indicating a solid 257% year-over-year upside. (To look at Johnson’s background, Click here)

Other analysts do not pray to be different. With 6 buy odds and no hold or sell, the word on the street is that BLFS is a strong buy. The shares are selling for $13.22 and the average target of $49.67 implies an upside of around 276% from that level. (See BLFS stock forecast on TipRanks)

To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Warning: The opinions expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Garland K. Long