Investing can seem complicated as there are many questions to consider before investing in a stock: Is the right time to top up? Are the stocks overvalued? Will a battered stock ever recover?
All of these concerns are valid, but there are ways to simplify the process, such as investigating insider actions. By insiders we mean business leaders who act “on the inside” and are accountable for the performance of the companies they work for. After all, they have knowledge that is not available to the occasional investor. And watching them buy stocks of their own companies, especially in bulk, is a clear signal to investors that they believe the stocks offer good value at current levels.
If that's not convincing enough, when the same stocks are being lauded by analysts at one of the world's largest banks like JP Morgan, it's definitely worth taking a closer look.
That's exactly what we did. Using TipRanks' Insiders Hot Stocks tool, we've focused on two names that insiders have invested millions in recently and that JPMorgan's equity experts also have room for further growth — one of which potentially has significant upside potential 175%. Additionally, analyst consensus rates both as Strong Buys. So let's take a look at why you should be paying attention to these two stocks right now.
Akoya Biosciences (AKYA)
We first head into the life sciences realm and learn about Akoya Biosciences, a company that calls itself “the spatial biology company.” That means it is a pioneer in spatial phenotyping technology that enables researchers and clinicians to gain deeper insights into the complex biology of diseases at the cellular level.
Together, the company's single-cell imaging products, such as the PhenoCycler (formerly known as CODEX) and the PhenoImager (formerly known as Phenoptics), provide a complete solution that meets the diverse needs of researchers in the fields of research, translational and clinical research.
Products have steadily grown in importance, and that was also the case in the last reporting quarter – for Q1 2023. Revenue rose 26.7% year over year to $21.4 million, beating guidance by $1.08 million. At the other end of the scale, earnings per share of -$0.49 were in line with Street's expectations. As for the outlook, the company maintained its previous full-year 2023 guidance, projecting revenue in the range of $95 million to $98 million. The midpoint of this range is above the consensus estimate of $95.92 million.
Despite the good numbers, AKYA shares have suffered badly this year, losing 32% year-to-date. It seems the time has come for the Insiders to act, and there are six of them in total. Apparently, several members of the C-suite believe the stock is undervalued. This week, board members Thomas Raffin, Matthew Winkler, and board chairman Robert Shepler all added shares, buying 2,020,000, 203,388, and 120,000 shares, respectively. In addition, board members Myla Lai-Goldman and Scott Mendel, along with CFO Johnny Ek, purchased smaller amounts of 20,000 shares each. Combined, these purchases are currently valued at $15.74 million.
You're not the only one showing confidence. Julia Qin, an analyst at JP Morgan, reads the latest print and has great things to say about the Spatial Biology company.
“AKYA delivered another strong quarter thanks to the new PhenoCycler-Fusion product cycle, with multiple products in the pipeline such as the field upgrade of PhenoCycler Fusion 2.0, PhenoCode panels and the expansion of the RNA menu to reflect year-on-year growth 2023 and beyond… At a whopping $17 billion.” “TAM for spatial biology, a differentiated value proposition, a strong clinical market positioning, and a strong management team believe AKYA is well-positioned to deliver a achieve and achieve attractive revenue growth and margin expansion,” said Qin.
Qin backs these comments with an Overweight (ie, Buy) rating and a price target of $18, suggesting the stock has scope for 175% growth over the next year. (To see Qin's track record, Click here)
This attitude is not an anomaly. All six other recent analyst ratings are positive, naturally making the consensus view here a strong Buy. Analysts expect the stock to climb a whopping 142% in the coming months, with an average price target of $15.86. (See AKYA Stock Forecast)
Top Golf Callaway Brands (MOD)
Because our next Insider/JPM-backed name will shift from medical devices to instruments of a whole different color. Topgolf Callaway Brands is a leading name in the global golf industry. Formed in 2021 from the merger of premium golf equipment manufacturer Callaway Golf and golf entertainment brand Topgolf, the company offers a range of products for amateur and professional golfers through its portfolio of brands – including golf equipment, apparel and entertainment.
This golf specialist delivered top marks for both sales and profits in its latest quarterly report. Revenue hit $1.17 billion, up 12.5% year over year and beating the Street's forecast by $30 million. Adj. Earnings per share came in at $0.17, beating analysts' forecast of $0.15.
However, the company provided a disappointing outlook: Revenue for the second quarter is expected to be between $1.175 billion and $1.195 billion, slightly below the consensus of $1.22 billion.
Management stressed that there are likely to be several initiatives that would drive growth in the second half of the year, but didn't provide too much information on them.
That wasn't much of a consolation to investors, because after digesting the details, they sent shares sharply lower. However, director Adebayo Ogunlesi must assume that the future bodes well for MODG as he recently acquired 100,000 shares which are now valued at $1,966,000.
JPM analyst Matthew Boss is also confident in the company's continued success and believes that Topgolf Callaway excels in its field.
“Management sees ‘extremely strong' demand within the social/walk-in business (80% of revenue mix), continued tailwinds for experiential activity and benefits from PIE, with CFO Lynch confident of SVS (Same-Vue- Sales) for FY23.” Outlook and multi-year growth potential of Topgolf (long-term low single-digit SVS with plenty of new space) … We believe the company deserves the “growth” name in golf with an accelerating multi-year financial profile of approximately 10-12 years represents % revenue growth, which equates to mid/high teens EBITDA growth,” said Boss.
Accordingly, Boss rates MODG as Overweight (ie, Buy), while its price target of $25 suggests shares will rise 27% in the coming months. (To see Boss' track record, Click here)
JPMorgan's view could prove to be Valens' conservative view – the stock's consensus rating of ‘Buy Strong' and average price target of $31.25 suggest upside potential of ~59% from the current stock price of $19.66 dollars. (See MODG Stock Forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.