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Four UPGRADED Stocks Buy on the Dip

Mercado Libre (MELI), Autodesk (ADSK), General Mills (GIS), and Church & Dwight Company (CHD) are four stocks that are showing strong signs of outperformance in a weak market. These stocks tend to have the best chance of outperforming when market conditions improve.

The market has been weak in the last couple of weeks with the S&P 500 being down 8%.

 

The POWR Ratings can help you identify the best stocks to buy. This exercise is even more important in down markets as upgraded stocks tend to have strong business momentum and investors are using weakness to accumulate shares.  
Let’s take a look at four of the more intriguing POWR Rating upgrades: Mercado Libre (MELI), Autodesk (ADSK), General Mills (GIS), and Church & Dwight Company (CHD).
 
Mercado Libre (MELI)

When it comes to eCommerce stocks, few are as intriguing as MELI. MELI is the top e-commerce company in Latin America. The company also provides a digital payment system to boot, making it easy for those who lack a bank account to shop online.

This POWR Ratings star simply cannot be stopped. MELI has "A" grades in the Industry Rank, Trade Grade, Peer Grade, and Buy & Hold Grade components. Furthermore, MELI is ranked first of 58 publicly traded companies in the Internet category.

The top analysts are bullish on MELI, setting an average price target of $1,366.92, indicating the stock has nearly 7% upside. Out of the 13 analysts who have studied the stock, 11 rates it as a “Buy”, two consider it a “Hold” and none advise selling.

Autodesk (ADSK)

This software and services business provides digital media solutions to those in a litany of industries. ADSK revenue is up 15% compared to this point last year. Furthermore, operating expenses are increasing at a slower rate than the company's sales. Add in the fact that ADSK's deferred revenue is up more than 28% and you have all the more reason to be hopeful for this stock. If that weren’t enough to whet your appetite for ADSK, consider the fact that the company is using augmented reality for its premier product dubbed AutoCAD that facilitates software design for clients.

ADSK has "A" grades in the Buy & Hold Grade, Trade Grade, and Peer Grade components. The stock is ranked above all but one in the Software - Business category. The analysts anticipate ADSK will reach $270.46, indicating the stock has around 13% room for upward movement.

General Mills (GIS)

Cereal is back en vogue. Though cereal sales dipped across prior years, people are scooping up boxes of Cheerios, Special K, Frosted Flakes, Raisin Bran, etc. left and right during the pandemic. Alternatives to dairy milk are partly fueling the renewed interest in GIS. GIS is clearly benefitting from the spike in cereal sales. Aside from cereal, GIS also manages 100 supermarket brands.

The POWR Ratings show GIS has an "A" Trade Grade and Buy & Hold grade. GIS is ranked first of nearly 60 publicly traded companies in the Food Makers category. The top analysts are bullish on GIS, setting an average price target of $65.13 for the stock, indicating it has just under 10% upside.

The bottom line is people will continue to buy GIS products no matter how long the pandemic lasts. This is a recession-proof and pandemic-proof stock if there ever was one.

Church & Dwight Company (CHD)

Most people have not heard of CHD yet this stock is certainly worthy of your attention. CHD makes and markets all sorts of specialty and personal care products. CHD has "A" grades in the Industry Rank, Buy & Hold Grade, and Trade Grade POWR Rating components. The stock is ranked 5th of 34 publicly traded companies in the Consumer Goods space.

The leading analysts have set a price target of $97.36 for CHD, meaning it has the potential to increase more than 10% before it is considered fairly valued. CHD second-quarter sales are up 10.6% on a year over year basis. Furthermore, the company's guidance has been raised, moving its sales growth target all the way up from 6.5% to 9.5%.

CHD personal care and household products will be purchased regardless of the state of the economy and the pandemic. This appears to be one of the safest places to park your money during these uncertain times.

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CHD shares were unchanged in premarket trading Friday. Year-to-date, CHD has gained 24.89%, versus a 3.30% rise in the benchmark S&P 500 index during the same period.



About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.

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