Stocks That Should Surprise the Market: Ameriprise Financial Inc. (AMP), Accuray Incorporated (ARAY)

Ameriprise Financial Inc. (NYSE: AMP) shares are -6.21% down in the year-to-date (YTD) period and have moved -5.01% or -$8.24 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +0.78% lower. Comparatively, the stock is -13.62% down YTD and -1.15% over the trailing 3-month period. If we look at the shorter duration, its week performance is -11.88% and -6.77% over the month.

Analyst Recommendations

On January 03, 2020, RBC Capital Mkts recommended the AMP stock is a Outperform, while earlier, Morgan Stanley had Downgrade the stock as a Equal-Weight on January 07, 2020. 13 analysts offering the recommendations for the stock have a consensus rating of 1.90 to suggest that the AMP stock is a “Strong Sell”. 0 of the 13 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 9 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $156.23 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $190.33. The forecasts give the Ameriprise Financial Inc. stock a price target range of $202.00 on the higher side while at least one analyst think the stock could plunge to a low of $178.00. The consensus price target represents an upside potential 17.92 while the two limits represent an upside potential of 22.66% or 12.23%.

Earnings Forecast

Analysts estimate the earnings to decrease -1.60% in the current quarter to $4.31, up from the $3.75 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $18.26, down -1.50% from $16.1 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $4.43 and $4.59. Wall Street estimates earnings per share to be at an average of $20.4 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 26 over the last 12 months, while SEC filings reveal that there have been 61 insider sales over the same period. Insiders have purchases 557,922 shares while those sold by company executives and officers stand at 623,804. The last 3 months have seen insiders trade a total of 547,526 and 595,575 in purchases and sales respectively.

CRACCHIOLO JAMES M, a Chairman and CEO at the company, sold 25,429 shares worth $4.54 million at $178.59 per share on Feb 19. The EVP Technology and CIO had earlier sold another 6,862 AMP shares valued at $1.23 million on Feb 20. The shares were sold at $179.55 per share. Berman Walter Stanley (Executive VP and CFO) sold 52,160 shares at $177.43 per share on Feb 18 for a total of $9.25 million while TRUSCOTT WILLIAM F, (CEO, Global Asset Management) sold 11,998 shares on Feb 18 for $2.13 million with each share fetching $177.88.

Accuray Incorporated (NASDAQ:ARAY), on the other hand, is trading around $3.09 with a market cap of $283.79M and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $8.38 and spell out a more modest performance – a 63.13% return. Some analysts are even forecasting -$0.01 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Accuray Incorporated (ARAY) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

ARAY’s operating margin was positive on the trailing 12 months basis, remaining steady at 1.30%, while the operating expenses over the recent quarter were at $35.2 million. This represented a 64.38% of the company’s total revenues which amounted $98.83 million. With this in place, we can see that the company’s diluted EPS inclined $0.12 on the year-over-year period, shrinking to -$0.05 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Mar 2020), the total assets figure advanced to $479.47 million from $463.75 million over the previous quarter. Total current assets were at $338.51 million. The cash flow from operating activities totaled -$8.17 million, significantly higher than the -$31.6 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $-10.7 million.

Insider activity

Insiders have transacted a total of 32 times at Accuray Incorporated over the last 6 months, with insider purchases undertaken 17 times and accounting for 1,477,772 shares. Insider sales totaled 152,309 shares over the same period, with these deals completed in 15 transactions. Looking at these numbers, we realize that net purchases over that period are 2.0 shares. Insiders now hold a total of 3.76M shares after the latest sales, with 64.60% net shares purchased.

Major holders

Insiders own 4.20% of the company shares, while shares held by institutions stand at 78.60% with a share float percentage of 86.71M. Investors are also buoyed by the number of investors in a company, with Accuray Incorporated having a total of 160 institutions that hold shares in the company. The top two institutional holders are Blackrock Inc. with over 6.95 million shares worth more than $19.59 million. As of Dec 30, 2019, Blackrock Inc. held 7.68% of shares outstanding.

The other major institutional holder is Neuberger Berman Group, LLC, with the investment firm holding over 5.75 million shares as of Dec 30, 2019. The firm’s total holdings are worth over $16.2 million and represent 6.35% of shares outstanding.

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