Top 3 Stocks Approved By Smart Money

Uncertainty abounds among investors.

It seems like everything is in the red, and no one can reliably say how the trade war will turn out.

Unfortunately, there’s no such thing as a silver bullet or a crystal ball when it comes to investing. You have to do the legwork on your own — research and due diligence are non-negotiable. 

But the right tools can simplify the process. For example…

What’s the Word on the Street? 

Wall Street analysts do indeed get things wrong (hello, Jim Cramer). 

However, there are times when a second opinion can help. After all, when evaluating a stock, how often do you dive into its balance sheets? Or do a deep dive into the competition? Take macroeconomic trends into consideration, industry changes, or sit in on an actual earnings call?

This is precisely where our quant ratings system, Zen Ratings, comes into play. It gives equities a holistic score based on seven factors, which we call Component Grade ratings. 

Sentiment is one of them. Not only does it consider what analysts are saying, but it also takes into account whether or not insiders are selling the stock, short interest, how earnings estimates change over time, and how often a company delivers earnings surprises.

In short, it’s like a fast-forward button, enabling you to follow the smart money. 

Below, I’m sharing 3 stocks that earn high marks for Sentiment. 

To source the below stocks, I started with WallStreetZen’s Positive Investor Sentiment screener, which showcases the top-ranking stocks for Sentiment in our system. From there, I filtered the list to only include stocks with an overall Zen Rating of A to further ensure that each stock is worthy of Wall Street’s optimistic appraisal. 

1. Primoris Services Corp. (NYSE: PRIM)

Our first pick happens to be the top-rated stock in a top-rated industry: Engineering & Construction. 

Infrastructure is the name of the game for Primoris Services Corp (NYSE: PRIM), which offers a range of services from highway and bridge construction to energy grid maintenance. PRIM could benefit as conversations surrounding policy increasingly trend toward onshoring and increasing domestic industrial capacity.

What shapes its excellent Sentiment Component Grade? First, analysts are resoundingly bullish — among the 7 analysts we track issuing ratings on the stock, 6 rate it a Strong Buy (the last one rates it a Hold). The average 12-month price target set by analysts sits at $89.14 — a figure that implies a hefty 69.28% potential upside.

Beyond positive coverage, the Sentiment Rating also tracks earnings surprises. Primoris Services has delivered 10 consecutive earnings beats.

Readers should also note that roughly 77% of the company’s shares are held by institutional investors, indicating a strong level of support from the Smart Money crowd.

Lastly, apart from Sentiment, PRIM ranks highly in terms of Artificial Intelligence. This means that a neural network trained on more than 20 years of technical and fundamental data has identified subtle patterns that hint at outperformance. 

Considering PRIM’s high marks across the board, it’s clear that Wall Street’s seal of approval is based on some pretty compelling arguments.

2. TTM Technologies Inc. (NASDAQ: TTMI)

TTM Technologies (NASDAQ: TTMI) is a business in a high-demand, high-growth industry — it’s one of the world’s top producers of printed circuit boards (PCBs), which are about every single modern device, from toasters and smartphones to advanced medical devices. 

While it isn’t immune to tariffs, particularly when it comes to supply chain disruptions, TTMI’s size advantage and solid fundamentals make the prospects of it weathering the storm and overcoming these challenges much more likely.

Let’s take a closer look at why the stock enjoys an A rating for Sentiment. 

For one, top-rated analysts are keen on the stock. TTMI is only covered by 2 Wall Street analysts we track, but they both have great track records — Needham’s James Ricchiuti and Stifel Nicolaus’ Ruben Roy are rated in the top 3% and top 5%, respectively. The former issues a Buy rating, while the latter issues a Strong Buy rating. Even more interestingly, both have set a $33 price target, which, if met, would amount to an 85.6% rally.

Looking further, since we currently face the possibility of recession, it’s worth considering how risky a stock is when evaluating it. TTM earns a Component Grade of B for Safety, which looks at things like predictability of earnings, cash flows, and operational metrics.

Last but not least, just like our previous entry, TTM Technologies stock has an Artificial Intelligence rating of A. 

3. PagerDuty Inc (NYSE: PD)

No, PagerDuty Inc. (NYSE: PD) has nothing to do with the pagers you remember from the 90s. It’s a cloud-based incident management and operations company. 

Their bread and butter is monitoring, responding to, and resolving critical business disruptions, mostly on the IT front. 

We’re all keenly aware of how even short-term outages can have a deleterious effect, not only on customer confidence, but stock prices as well. As the digital economy continues to grow, with an ever-greater concentration of businesses focusing on online channels, demand will likely remain strong for the foreseeable future.

And demand has been anything but sluggish thus far — PagerDuty has managed to notch a truly impressive streak when it comes to earnings — 16 consecutive earnings per share (EPS) beats.

Based on the price targets set by the 6 analysts who cover the stock, the average 12-month price forecast for PD shares sits at $21.33 — which implies a 37.1% upside.

Despite a strong bearish turn in the financial markets as of late, the ratio of insider selling to insider buying stands at 77.24% to 22.76%. That might not sound like much, but insider buying is actually quite a rare occurrence, demonstrating quite a lot of confidence from key company personnel and/or board members.

Once again, we’re dealing with a company that has an Artificial Intelligence Component Grade rating of A. However, PD shares also rank in the top category according to Growth.

This is a bit of a riskier play, as the company is not yet profitable. However, margins have moved from -19% to -11.6% in the past year — and seeing how the services the business offers are essentially immune to tariffs, coupled with the strong winning streak it has been on, we wouldn’t be surprised if PagerDuty became profitable sooner than expected.

The Bottom Line?

Sentiment isn’t everything, but it can be a powerful ally when looking to strengthen the case for a potential investment. 

If you’re interested in finding more stocks like these, check out our Positive Investor Sentiment screener. If you’re looking for easy-to-use presets to help you narrow down your search, check out our Stock Ideas list. 

What to Do Next?

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