As the trade war rages on, and economic data continues to raise the alarm, it’s no wonder why investors have become more cautious.
But even as the picture looks increasingly bleak, there are a handful of stocks that analysts say are “must owns” for smart investors.
Among them, there are five names that stand out: Dexcom (NASDAQ: DXCM), Edwards Lifesciences (NYSE: EW), Five Below (NASDAQ: FIVE), OneSpa World Holdings (NASDAQ: OSW), and Vertex Pharmaceuticals (NASDAQ: VRTX).
All five of these stocks are up year to date, with Dexcom up 31%, Edwards Lifesciences up nearly 46%, Five Below up nearly 22%, Vertex up just under 3%, and OneSpa is up 23% since its March IPO.
And likewise, all of these stocks carry a consensus Buy rating from analyst. Of the five, analysts see the most upside for Vertex and OneSpa, with average price targets indicating possible upside of 25% and nearly 17%, respectively.
Cowen recently upgraded Vertex shares to Outperform. “In a large cap universe of middling growth prospects, we think [the company’s] fundamentals position Vertex as the ‘must own’ biotech for large cap growth investors.”
As for OneSpa, if you’ve ever gotten a massage while on vacation, chances are the service was provided by OneSpa World Holdings as the company manages spa services for cruise ships and global destination resorts.
After a recent meeting with analysts, Stifel analyst said, “We walk away from our time with management still convinced OSW remains a must own stock both over the near/long-term.”
“OSW, in our opinion, remains the ultimate FCF growth story within the cruise/travel segment as we estimate FCF/share will grow, on average, around 20% [per] year for the next three years, while trading at a reasonable multiple of 15x our 2021 FCF estimate,” the Stifel analyst said.
Diabetes glucose monitoring systems manufacturer Dexcom is another “must own” stock.
That’s according to Piper Jaffray, which said after a recent investor meeting with the company, “Continuous glucose monitoring demand remains robust and importantly G7 is only 12-15 months away. Longer term, we left the meetings with a lot more bullishness on the hospital market as well as tenon-intensive Type 2 market where we do believe DXCM’s sensor technology will have an impact.”
“DXCM remains a must own for investors.”
As for Five Below, Wells Fargo says that while the threat of tariffs looms over many retail stocks, one discount chain has been standing out as a winner.
“Five Below stands out as a compelling investment idea in an increasingly difficult consumer investment landscape,” the Wells Fargo analysts said.
According to Wells Fargo, Five Below’s tariff mitigation strategy is “aggressive,” and said that the company has “an attractive valuation that provides room for significant upside.”
“FIVE is a must own stock, in our view.”
And finally, Canaccord recently rated Edwards Lifesciences a Buy with a $250 price target – 12% higher than the current price. The firm said the stock is a “must own for at least another 3 quarters.”
“We surmise EW common could top $250 by year’s end – largely owing to our call that EW could deliver accelerating TAVR growth through H2:19E, augmented by TMTT, to which we also see upside to current guidance,” the Canaccord analysts wrote. “Consequently, we think large-cap investors should add to positions – yes, even with the stock bidding up 10% after a stellar Q2.”