Barchart.com’s Top 100 Stocks to Buy is an interesting list to watch.
It’s beneficial if you’re a momentum investor looking to bet on a stock that’s already gained a significant amount because it tells you whether the performance over the past year is front- or back-loaded.
What do I mean by that?
Is the stellar one-year performance from returns achieved six to 12 months ago, or has it occurred more recently? You’re primarily interested in whether the tank still has some gas left. You don’t want to buy at the very high from the person who purchased at the very low.
As the Barchart glossary says, “[The] Weighted Alpha indicator is a measure of how much a stock has risen or fallen over the past 250 trading periods, allowing traders to quickly spot stocks or sectors that have shown a strong rally over the past months and which may continue to rally.”
So, for example, American Coastal Insurance (ACIC) has the best performance over the past year of the Top 100 Stocks to Buy, with a return of 2567.53%. Its weighted alpha is 349.50. The second-best performer is Soleno Therapeutics (SLNO). It’s up 2,510.28% with a weighted alpha of 120.10.
This tells investors that ACIC’s one-year performance gains have been generated more recently than SLNO's, suggesting that the condominium insurer’s stock might have more gas left in the tank than the healthcare company.
Five stocks entered the Top 100 Stocks to Buy on Tuesday. Here’s what I’d buy.
BellRing Brands
BellRing Brands (BRBR) entered the Top 100 in the 77th spot, the highest ranking of the five stocks making their debut. BellRing’s weighted alpha on Tuesday was 102.80. Its shares are up 109.2% over the past year. As I write this on Wednesday, it’s 62nd (15-spot move) with a weighted alpha of 113.60.
BellRing’s nutrition products include Premier Protein, Dymatize, and PowerBar, which its former parent, Post Holdings (POST), acquired from Nestle (NSRGY) in 2014. BellRing was spun off from Post in March 2022. Post shareholders received 1.267788 shares of BellRing for each share in the parent. BellRing’s shares have more than doubled since the spinoff.
Casi Pharmaceuticals
Casi Pharmaceuticals (CASI) entered the Top 100 in the 82nd spot with a weighted alpha on Tuesday of 101.80. Its shares are up 204.8% over the past year. As I write this on Wednesday, it’s 84th with a weighted alpha of 101.80.
Casi is a biopharmaceutical company developing and commercializing therapies and products in hematology and oncology. The company is based in Beijing, with a U.S. office in Rockville, Maryland.
On November 8, the company announced that its partnership with Juventas Cell Therapy Ltd. received approval from the China National Medical Products Administration (NMPA) to market “Juventas' investigational cell therapy, Inaticabtagene Autoleucel (CNCT 19), for the treatment of relapsed and refractory B-cell acute lymphoblastic leukemia (r/r B-ALL) in China,” stated Casi’s Nov. 8 press release.
Through the end of the third quarter, Casi had revenues of $27.0 million from Evolmela, the company’s hematology treatment. Its operating loss for the first nine months was $21.7 million.
QuikLogic
QuikLogic (QUIK) entered the Top 100 in the 85th spot with a weighted alpha on Tuesday of 99.70. Its shares are up 85.0% over the past year. As I write this on Wednesday, it’s 77th with a weighted alpha of 106.40.
The California-based company specializes in FPGA (Field Programmable Gate Array) integrated circuits that can be reprogrammed unlimited times after manufacturing. The Department of Defense (DoD) recently awarded the company a $6.9 million base contract with options extending several years that could bring the total contract to $72 million.
In the most recent quarter, QuikLogic’s operating profit was $1.28 million on $6.67 million in revenue. It expects non-GAAP profitability for 2023 on a 30% increase in revenue. Through the first nine months of 2023, its non-GAAP loss was just $129,000.
IES Holdings
IES Holdings (IESC) entered the Top 100 in the 97th spot with a weighted alpha on Tuesday of 95.40. Its shares are up 103.26% over the past year. As I write this on Wednesday, it’s in 70th with a weighted alpha of 109.50.
The Houston company designs and installs electrical systems for all kinds of end-user customers, including data centers, power generation, e-commerce distribution centers, and virtually any commercial enterprise that requires elaborate electrical systems.
Its revenue growth through the first nine months of 2023 won't blow you away -- $1.73 billion, 12% higher than a year earlier -- but its operating profit jumped 244% to $107 million or 6.2% of revenue. Its backlog was $1.5 billion as of June 30.
InterDigital
InterDigital (IDCC) entered the Top 100 in the 100th spot with a weighted alpha on Tuesday of 93.20. Its shares are up 104.02% over the past year. As I write this on Wednesday, it’s in 70th with a weighted alpha of 109.50.
InterDigital has provided advanced research capabilities for developing wireless and video technologies for over 50 years. It makes most of its money from licensing its many patents. In Q3 2023, its revenue was $140.1 million, 22% higher than a year earlier, with a $53.7 million operating profit, 69% higher than a year ago.
Although it’s an exciting income and capital appreciation play, it fell off the Top 100 list on Wednesday, so I removed it.
The Best Bet
Believe it or not, there's something to like about all five companies. However, I did say I would tell you which one I would bet on if it were up to me. And that’s what I'm going to do.
BellRing reported its Q4 2023 results on Monday. Net sales rose nearly 25% to $473 million, with an operating profit of $78 million, 28% higher year-over-year. For all of 2023, its sales were $1.67 billion, with an operating profit of $287 million (17.2% operating margin).
In 2024, it expects sales of at least $1.83 billion, with an adjusted EBITDA of $360 million. That’s 10% and 7% higher, respectively.
While there was nothing to write home about for the entire year, the fourth quarter results suggest it’s ready to deliver 2024 results that blow through its guidance for the year ahead.
With momentum gathering speed after earnings, the near-term and long-term look positive for BellRing. It’s the one to buy.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
