With the S&P 500 Index only slightly below its all-time high, bargains are getting harder to find.
If you want to go after the hottest tickers, prepare to pay a pretty penny for them.
But not every stock with potential is shooting through the roof. Goldman Sachs recently issued “buy” ratings on several stocks that definitely haven’t been market darlings this year.
Here are three companies Goldman considers hidden gems — plus another little-known opportunity outside the stock market.
Twilio (TWLO)
This cloud communications platform helps software developers interact with users through embedded features like text chat, phone calls and video calls.
The company was founded in 2008 and today has more than 250,000 active customer accounts.
Business is growing rapidly. In Q3, revenue increased 65% year-over-year to $740.2 million. For Q4, management expects revenue to be in the range of $760 million to $770 million.
And yet the stock hasn’t been a market favorite. Year-to-date, Twilio shares tumbled 27.7%, compared with the S&P 500 Index’s 24.9% gain in the same period.
Goldman jumped on Twilio last week, with a price target of $350 — about 36% worth of upside from current levels.
Granted, Twilio still isn’t the cheapest pickup, as it trades at over $250 apiece. But you can own a smaller piece of the company using a popular app that allows you to buy fractions of shares with as much money as you are willing to spend.
Boeing (BA)
After the stock market’s impressive climb over the past year and a half, many companies are trading above their pre-pandemic levels.
Not Boeing, though. While the company’s share price has doubled since the March 2020 lows, it’s still well below where it stood before COVID.
Boeing is one of the leading players in the aircraft manufacturing business, and investors have been sensibly concerned about whether airlines will bother to buy new planes as the pandemic continues to suppress the travel industry.
But things have improved, according to the latest earnings report. In Q3, revenue rose 8% from a year ago to $15.3 billion. The company had a commercial airplanes backlog of $290 billion at the end of September.
Goldman has set a price target of $305. Since Boeing currently trades at just $190, the Wall Street giant is projecting a potential upside of over 60%.
FedEx Corporation (FDX)
Since FedEx’s delivery service is an essential part of many e-commerce businesses, one would expect the stock to thrive in this day and age.
And although FedEx shares did have an impressive rally earlier this year, they have pulled back since. In fact, over the past 12 months, the stock has slipped 13.2%.
But Goldman remains bullish. On Dec. 17, the investment bank reiterated its buy rating on FedEx and set a $343 target, representing roughly 35% upside from current prices.
The company reported earnings last week. The report shows that in the three months ended Nov. 30, FedEx generated $23.5 billion of revenue, up 14% year-over-year.
Adjusted earnings came in at $4.83 per share, unchanged from a year earlier.
The stock’s curious slide reinforces just how hard it is to predict winners and losers. If you don’t want to gamble on individual stocks right now, you can always build a diversified portfolio of blue-chip stocks just by using your “spare change.”
Ready to look outside the stock market?
When looking for opportunities, never forget that stocks can be highly volatile, and Wall Street experts don’t always make the right predictions.
If you want to invest in something with big potential that’s also insulated from the ups and downs of the stock market, consider this overlooked asset: fine art.
Contemporary artwork has outperformed the S&P 500 by a commanding 174% during the same period, according to the Citi Global Art Market Chart.
Artwork is becoming a popular way to diversify because it’s a “real” physical asset with little correlation to the stock market, much like precious metals or real estate.
On a scale of -1 to +1 (with 0 representing no link at all), Citi found the correlation between contemporary art and the S&P 500 was just 0.12 over the past 25 years.
It’s true that investing in fine art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich. But with a new investing platform, you can invest in iconic artworks too, just like Jeff Bezos and Peggy Guggenheim.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
