Billionaire Ron Baron says the recent market weakness offers a great buying opportunity; Here are 3 Stock Analysts Hit Like

Last month, the annualized inflation rate reached 8.6%, the highest in more than 40 years. Last week, in response, the Federal Reserve raised its benchmark interest rate by 75 basis points, the largest such increase since 1994. The combination of high inflation and aggressive tightening by the central bank sent a market Stock already nervous at its worst level. week since the start of the COVID crisis, and has economists talking grimly about a repeat of the late 1970s and early 1980s, when similar inflation and high interest rates led to market weakness and a deep recession.

However, for long-term investors, the picture may not be so bleak. The general market downturn has led to lower prices across the board, and that may offer opportunities to buy high-quality names in hard-hit sectors. In fact, billionaire investment legend Ron Baron of Baron Capital sees the current environment as a “major, once-in-a-generation buying opportunity.”

“In general, we remain optimistic. Normally we don’t think much about short-term macro issues like inflation, oil prices, interest rates and the Russia-Ukraine conflict. Inflation is always with us, but most people don’t talk about it. In my lifetime, inflation has averaged about 4% to 5% a year. That means prices double about every 14 or 15 years. The stock market doubles about every 10 or 12 years. , or about 7% to 8% per year,” Barón said.

The key for investors, then, is to find stocks that are poised to gain in the future, when the downtrend runs its course, even if they are down now. Wearing TipRanks Database, we identified three battered stocks that earned a “Strong Buy” rating from the analyst community. Not to mention, each offers more than 50% growth potential, despite the challenging market environment. Let’s take a closer look.

wall box (wbx)

We will start with Wallbox, a Spanish firm in the electric vehicle (EV) charging market. Wallbox works on both the commercial and residential sides of electric vehicle charging and offers a range of charging products for home and commercial use. Charger features include universal plugs and touch screen controls. Wallbox is especially proud to offer the first bidirectional charging unit, which allows a fully charged EV to send power to the user’s home, or even to the electricity grid; in fact, it turns the EV into a storage battery when not in use as a car. .

Wallbox has been in the public markets since last October, when it completed a business merger with a SPAC firm. Since its Wall Street debut, WBX shares hit a high of $18.50 in November and were still trading near $17 when 2022 opened, but are down 47% year-to-date.

The sharp drop in share price came even as Wallbox reported strong financial results. The company’s 1Q22 report, released last month, showed €28.3m on the top line, a 192% increase from the prior year quarter. This was driven by a 180% year-over-year increase in charger sales (some 51,000 units sold in the quarter) and a gross margin that, at 41%, exceeded internal forecasts. Wallbox is targeting full-year 2022 revenue in the range of €175m to €205m, which would translate to 145% to 190% annual growth.

The company’s rapid growth has impressed the Cowen analyst gabriel daud, who writes: “With a diverse portfolio of products supporting US expansion and power management transformation, Wallbox benefits from a required $293 billion investment in hardware globally between 2022 and 2030. Vertical integration within manufacturing allows the company to navigate a difficult supply chain environment. and achieve best-in-class gross margins of ~40%. We see WBX tipping to positive FCF in 2026 with an additional advantage from new software products, such as Sirius.”

Daoud quantifies his outlook on WBX stock with an outperform rating (ie buy) and a $14 per share price target implying a ~63% upside over the next 12 months. (To see Daoud’s history, Click here)

Wallbox has not only impressed Daoud; the stock’s strong buy consensus rating is supported by 5 recent analyst reviews, including 4 buys and 1 hold. The stock is priced at $8.58 and its average target price of $16.50 indicates a strong 92% growth potential this year. (See the WBX Stock Forecast on TipRanks)

Generac Holdings (GNRC)

For the second stock, we’ll look at Wisconsin-based Generac, a manufacturer of electric power generators. The company’s generators are designed as backup units for use in the residential, light commercial and industrial markets, to provide power in the event of a grid failure. Generac offers a wide range of generating units, from 15-kilowatt devices suitable for home use to multi-megawatt power systems for the industrial sector. The customer can even choose small portable generators, for use in workshops or camps.

Generac has always been expanding its product lines, looking for new niches that can make use of backup power generation. In recent weeks, the company launched new products for the electric vehicle and portable generator markets. The former offers solutions for vehicle charging problems, while the latter brings dual fuel capabilities to the portable generator market with models capable of operating on both LP gas and regular gasoline.

New products in a quality line have been the backbone of Generac’s strong sales position. The company has seen its top line grow steadily over the past few years, with 8 consecutive sequential quarterly revenue gains. In recent 1Q22, Generac reported $1.14 billion on the top line, up 41% year over year. The gain was driven by a 43% increase in residential product sales and included a 38% increase in commercial and industrial sales.

At the same time that revenues grew, profits fell. The company reported adjusted net income in the first quarter of $135 million, down from $153 million in the prior year quarter. Per share, this translated to a year-over-year reduction from $2.38 to $2.09.

Generac shares have seen volatile trading this year, swinging sharply both higher and lower. So far this year, shares are down 33%.

The drop in the share price has not prevented the Northland analyst Donovan Schaffer to fall firmly on the upside of this stock. He sees Generac well-positioned to move forward, laying out three reasons why: “(1) GNRC dominates the growing US home backup (HSB) market, with enduring competitive advantages and a market share of ~ 75%; (2) it is ideally positioned to understand and navigate the terrain of the energy transition, and thus make the most of its burgeoning clean energy business; and (3) has a large global footprint acquired between 2010 and 2018 that goes unnoticed and could serve as a latent force multiplier.”

Schafer uses these comments to support his outperformance (ie buy) rating on GNRC stock and sets a price target of $370, implying 57% growth potential over 12 months. (To view Schafer’s history, Click here)

Stepping back and looking at the big picture, we see that Generac has collected 16 recent analyst reviews, and their 15-to-1 breakdown on Buy versus Hold gives the stock a consensus view of Strong Buy. The stock’s average target price is $399.33 and the listing price is $233.50, suggesting it has room for a hefty 70% rise in the coming year. (See the GNRC Stock Forecast on TipRanks)

Capital of Silvergate (YES)

Last but not least is Silvergate, a California commercial bank that focuses on digital currency investing. Silvergate started in 1988 and has been a leader in digital currency investing for almost a decade. The company has had 24 consecutive years of profitability and offers services to a wide range of institutional investors and digital currency exchanges.

So far this year, Silvergate shares have fallen 58%, a sharp drop that has coincided with the sharp drops we have also seen in the crypto markets.

Despite the difficulties the crypto market has seen recently, Silvergate’s business in digital currencies has been expanding. The company’s 1Q22 report showed 1,503 digital currency clients at the end of the quarter, compared to 1,381 at the end of the fourth quarter and 1,104 in the prior year quarter. At the same time, the bank’s Silvergate Exchange Network, its digital currency exchange, saw transfers decline in 1Q22, from $219.2 billion in 4Q21 to $142.3 billion.

While foreign exchange transactions were down, Silvergate still saw revenue gains. The bank reported first quarter net income of $27.4 million, a 28% increase from 4Q21 and an even more impressive 115% gain from 1Q21. The bank’s income came in at 79 cents per diluted share.

Analyst jared shaw, in his Silvergate coverage for Wells Fargo, believes now is the time for investors to consider SI stock. He writes: “SI has created a strong network effect through its Silvergate Exchange Network (SEN), which is used by some of the largest exchanges and institutional clients in the crypto space. As rates rise, the largest spread revenue will come from a zero-cost deposit base, and further growth in SEN leverage and the launch of an SI-issued stablecoin payments network represent future opportunities. Continued institutional adoption of crypto and product innovation in SI should help maintain the bank’s growth profile. We believe that much of the bearish case is priced at current levels, making it an attractive entry point…”

With that stance, it’s no surprise that Shaw rates the stock as Overweight (ie Buy). He gives the stock a $120 price target, showing his confidence in a 93% one-year upside. (To view Shaw’s history, Click here)

Overall, of the 9 Wall Street analysts who recently reviewed this stock, 8 rated it Buy versus just 1 Hold (ie Neutral), for a consensus rating of Strong Buy. The shares are selling at $62.32 and have an average target of $175.89, indicating a ~182% upside for the next few months. (See the SI Stock Forecast on TipRanks)

To find great ideas for trading stocks at attractive valuations, visit TipRanks’ The best stocks to buya recently launched tool that unites all TipRanks stock insights.

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

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