These buy-listed stocks are too cheap to ignore

Although every market advisor tells you never to try to “time” the market, timing is still important to success. Investors need to buy at low prices, and to do that they need to know when prices are low. This does not necessarily mean low in absolute dollars, but low relative to a stock’s recent past performance.

Recognizing this lower price range, investors can turn to the pros on Wall Street for help. Analysts have been busy lately, picking stocks that are in their lower price range and poised for strong gains.

We used the TipRanks database to research two such stocks; each has fallen more than 50% in the past year, but each also has a buy rating and solid upside potential, according to Wall Street analysts. Here are the details.

CS Disco, Inc. (LAW)

We’ll start with CS Disco, a software company that brings AI, cloud computing and data analytics to the legal profession. CS Disco’s offerings include solutions for managing legal claims, enhancing the discovery process, document review and case building – and that’s just the beginning. The company offers law firms, corporations and educational institutions a scalable system focused on legal issues.

While there is never a shortage of legal service needs in our highly litigious society, LAW shares have fallen on hard times over the past 12 months, plunging approximately 76%. The share decline comes as the company posted deepening quarterly losses, and management last summer slashed its mid-year 2022 revenue forecast by 11% and predicted a annual net loss larger than expected for 22.

Acknowledging the company’s headwinds, five-star Canaccord analyst David Hynes writes, “We’ve reached the point with Disco that the stock is just too cheap for the potential of this company…it’s an action that went from the next giant vertical to a problem child in 18 months. Some of this was self-inflicted, namely that the model and the team don’t provide enough forward-looking metrics to hang your hat on, but to us, a lot of it feels like the pains of growing a business still under -sized.”

“Whatever the culprit, with LAW stocks now trading at around 1.0x EV/R on C2023E, we think it’s time to be more constructive on the stock… With growth improving , confidence should be restored, and if that’s true, there’s nothing to say that it shouldn’t be at least a 3-4x stock EV/R, which current 2023 estimates would cost at LAW 11 at $13,” Hynes added.

So it should come as no surprise that Hynes rates LAW as a buy. Not to mention that his price target of $12 puts the upside potential at around 55%. (To see Hynes’ track record, click here)

Overall, there are 9 recent analyst analyzes in LAW’s filing, and they include 5 buys, 3 holds and 1 sell – giving the stock a consensus Moderate Buy rating. The stock is selling for $7.75 and its average price target of $11.56 indicates upside potential of around 49% over the next 12 months. (To see LAW Stock Forecast)

Turtle Beach Company (TO HEAR)

Next up is Turtle Beach, a San Diego-based gaming accessory company. While computer game software companies tend to grab the headlines, games won’t go anywhere without the hardware that companies like Turtle Beach design and manufacture – headsets, controllers, simulation systems, microphones and other gear. sound. Turtle Beach got its start in the 1970s and today is best known for its headsets and console gaming audio.

Shares of Turtle Beach, however, are down 53% over the past year. At the end of 2021, and into 2022, the company experienced a sharp decline in earnings and profitability, from quarterly net gains to losses, and the stock price began to decline in response. By mid-summer, it was clear that demand – which had soared during the pandemic period, when shutdowns kept people home and emphasized home entertainment options such as games on computer – was down and not recovering – or at least not recovering anytime soon.

In addition to headwinds from the gaming sector, Turtle Beach explored the possibility of a takeover in 2022, but by the end of the summer those moves had fallen through. In August, the company’s board formally decided not to sell, at least for now, and shares fell about 30% when that word got out. At the same time.

Analyst Sean McGowan, writing on Turtle Beach for Roth Capital, says the “headwinds are likely to dissipate” going forward, and gives some details to back up his position: “Apart from the market selloff, we believe HEAR’s decline has two primary causes: 1) Surprising weakness in the video game sector, leading to declining sales and an industry-wide stock price squeeze; and, 2) A costly proxy fight and unsuccessful sales effort forced by an activist investor. We believe both of these factors will subside over the next 12-18 months, propelling HEAR to at least $18.

McGowan’s comments support his Buy rating on the stock, and his $18 price target implies a roughly 97% gain over the one-year period. (To see McGowan’s track record, click here)

Overall, analysts on the street seem to have a more optimistic view of HEAR stocks than investors; the stock has been the subject of 5 recent analyst reviews, with a 4-to-1 split favoring Buys over Reserves for a strong Buy consensus rating. The shares are trading at $9.14 and the mid-price target of $11.70 suggests a 28% increase from that level. (To see HEAR stock forecast)

To find great stock ideas trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that brings together all of TipRanks’ stock information.

Disclaimer: The views expressed in this article are solely those of the analysts featured. 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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