Stock Hotlist: Conviction Buys

Picking the wrong stocks can decimate your portfolio.

They’re pure portfolio poison.  

But the right stocks…

If you pick the right stocks, you could find yourself jumping for joy on top of an enormous pile of cash.

With over 4000 stocks to choose from, picking the right ones can be nearly impossible… 

Unless you’re spending hours each day combing the markets.  

That’s why we’ve done it for you.  

We sort through thousands of stock ideas and narrow them down to a few primed for solid price action soon.  

For this list, we’ve narrowed it down to three stocks that could skyrocket in the coming weeks.

Click here to get the full story on the stocks we’re watching this week… 

NextEra Energy Inc. (NEE) 

Most stocks from the utility sector are slow-growing income plays. As such, an electric utility stock wouldn’t typically be considered a growth stock.   However, Wall Street expects NextEra Energy to grow its earnings by an annual average of around 9% over the next five years. This comes on the heels of averaging more than 8% adjusted earnings growth since 2007. For all intents and purposes, NextEra Energy is a growth stock within the utility sector.

The biggest differentiator that has helped NextEra achieve this stellar growth rate is its focus on renewable energy. NextEra is currently generating 31 gigawatts (GW) of capacity from renewable energy sources, including 23 GW from wind and 5 GW from solar – which has helped substantially lower electricity generation costs for the company and its customers. 

NextEra Energy pays an annual dividend of 2.47% and is currently trading at its lowest 12-month forward price-to-earnings ratio in five years, making it a superior growth opportunity. Overall, NEE gets a Strong Buy rating from the consensus based on 19 recent reviews, including 15 Buys and 4 Holds. An average price target of $90 represents a 20% upside.  

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Canadian Natural Resources LTD (CNQ)  

When it comes to energy, Canada stands out with its expansion of fossil-fuel production. Oil giant Canadian Natural Resources has the largest undeveloped base in the Western Canadian Sedimentary Basin, is the largest independent producer of natural gas in Western Canada, and is the largest producer of heavy crude oil in Canada.  

Higher oil and gas prices substantially improved energy companies’ earnings in 2022. CNQ utilized the excess cash to return to shareholders and improve its balance sheet. The company lowered its debt from around $35 billion in 2021 to $12 billion at the end of Q1 2023. 

Valued at some $58.4 billion, the Canadian energy behemoth has a trailing four-quarter earnings surprise of roughly 7.4%, on average. Considering the potential tailwinds for the industry and for CNQ itself, it would make sense for the massive oil company’s stock to trade at a premium price. Potential investors will be glad to know that the stock has a forward P/E ratio of 7.4, better than the industry average of 8.  

The pros on Wall Street agree that CNQ shares are ripe for the picking. Of 21 analysts offering recommendations, 14 rate the stock a Buy, and 7 give it a Hold rating. There are no Sell recommendations. CNQ also boasts an attractive 4.9% dividend yield. A median price target of $67.37 represents a 25% increase from the current price.  

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DexCom (DXCM)

Diabetes is increasing at an alarming rate in the United States. According to the CDC’s National Diabetes Statistics Report, for 2022, cases of diabetes have risen to an estimated 37.3 million – about 1 in 10 people. Mid-cap medical device manufacturer, DexCom is responding with innovative solutions that are gaining popularity among the masses, so much so that the company has recently reconsidered and raised its outlook.

In April, Medicare officials expanded reimbursement for continuous glucose monitors or CGMs to all patients who require insulin to manage their diabetes. It is the most significant expansion ever in the history of the CGM category providing access to a number of people who will benefit greatly. And it’s the tailwind leading CGM manufacturer DexCom has been waiting for.

Management now expects to reach $4.6 billion to $5.1 billion by 2023. That’s an increase of $600 million from the previous range for the year. DexCom’s sales last year rose 19% to $2.91 billion. Analysts polled by FactSet predict sales will rise 20% to $3.5 billion in 2023.

DexCom stock is highly rated across the board. According to Investor’s Business Daily, DexCom’s fundamental and technical measures warrant a place in the top 3% of all stocks. The 22 analysts covering the stock resoundingly agree, giving it a Strong Buy recommendation.   

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