There's no doubt about it, the tech sector, which powered so much of the market's success in the last decade, has led the declines in the past six months. Since the start of the year, the tech-heavy NASDAQ index is down nearly 28%, even after some recent bounces.
But while the index is beaten down, not every component stock is suffering right now. Some stocks, in fact, have been outperforming their peers, and haven't been touched by the general collapse in tech.
Jim Cramer, the well-known host of CNBC's 'Mad Money' program, likes what he sees in two that are rated among the NASDAQ's best performers in 1H22, in particular, and believes that they can continue to deliver impressive returns for shareholders.
According to the TipRanks data, these are both Buy-rated equities. Let's take a look at the details, and the analyst commentary, to find out just what else brought them to Cramer's attention.
T-Mobile US (TMUS)
We'll look first at T-Mobile, one of the US market's largest wireless service providers, and a leader in 5G network coverage. In the first quarter of the year, T-Mobile saw its total customer count hit 109.5 million, a record high level for the company, and an increase of 1.4 million year-over-year. These numbers, in turn, generated powerful financial results; T-Mobile saw a total of $20.1 billion in total revenue for 1Q22, of which $15.1 billion was reported as services revenue.
Even better for the company's future business prospects, T-Mobile continued to expand its nationwide, standalone 5G network coverage, and can now boast of reaching some 315 million people in the US, or approximately 95% of the total population. The company's best service, its faster 'ultra-capacity' 5G, currently covers some 225 million people, including almost 85% of T-Mobile's active customer base. The company plans to expand this coverage to 260 million by year's end, and to 300 million by the end of next year.
In line with those plans, the company announced in June that its coverage network had reached an additional 81 cities and towns in the states of Colorado, Iowa, Kansas, Missouri, and Oklahoma, reaching an additional 5 million homes.
Ambitious plans, sound revenues, and a leading position in the next generation of network tech all recommended this stock to Jim Cramer, who describes TMUS as poised for a 'great performance in its next quarter.' So far this year, shares in TMUS are up 20%, dramatically outperforming the NASDAQ index.
Just how great might that performance be? 5-star analyst Ivan Feinseth, of Tigress Financial, writes of T-Mobile's path forward: "Growth momentum continues to accelerate, driven by its ongoing demand for high-speed network connectivity, and the company offers a unique value proposition for both customers and investors. TMUS's strong customer acquisition growth and services revenue momentum will continue to drive accelerating Business Performance trends. TMUS continues to drive strong customer acquisition growth across all product offerings driven by its ultra-high-speed network and compelling value proposition."
Acknowledging the strength of the company's forward plans, Feinseth rates T-Mobile shares a Buy, and his $195 price target suggests an upside of ~41% for the year ahead. (To watch Feinseth's track record, click here)
Overall, T-Mobile hasn't just generated revenues, it has also generated interest among the Street's analysts. 8 have chimed in with reviews in recent weeks, giving the stock 7 Buys and 1 Hold for a Strong Buy consensus rating. The shares are priced at $137.05 and their $174 average target implies ~27% upside in the next 12 months. (See TMUS stock forecast on TipRanks)
Seagen, Inc. (SGEN)
The next Cramer pick we'll look at is Seagen, a biopharmaceutical researcher working on new treatments in the field of oncology. Seagen is a multi-stage biopharma, with several medications approved and on the market, or undergoing label-expansion late-state clinical trials, as well as several new tracks in early stages of clinical trial research. This has Seagen pushing all the buttons for what makes a biopharma stock attractive.
In the first quarter of this year, Seagen saw total revenues of $426 million, which included product sales of $383 million. The product sales numbers come from the company's four approved drugs, Adcetris, Padcev, Tukysa, and Tivdak. All four have FDA approval, and Padcev has recently also received approval from the EU as a treatment for previously treated metastatic urothelial cancer. The combined product sales were up 27% year-over-year.
But the biggest news on Seagen is not from the product line or development pipeline. Biotech giant Merck has for several months now been sounding out Seagen regarding possible acquisition, and those moves have been gaining momentum since the spring. For Merck, such an acquisition would bring a major increase to the anti-cancer portfolio; Merck already owns Keytruda, and Seagen's product line would make a strong complement. For Seagen, an acquisition would bring both stability to the leadership level and access to far larger resources.
Speculation on the merger potential has had a beneficial effect on SGEN shares. Year-to-date, SGEN shares are up 12% in volatile trading.
The merger interest from Merck has Jim Cramer jumping all over this stock. He says it is a stock that 'investors should buy,' with the buy-out possibility from a big name being a big booster.
In coverage for Raymond James, analyst Dane Leone would agree, and in his review sees the merger talks as the key factor for investor interest in Seagen.
"The stock has recently been bid higher around disclosure from reputable news sources that Merck is in talks to potentially acquire the company. Given the recent departure of the long-time Seagen CEO, we think that it is likely the Board of Directors is evaluating strategic alternatives for the company. The relationship with Merck, specifically, has been long-standing and given the needs of Merck around KEYTRUDA patent expiry and limited existing Antibody-Drug Conjugate exposure, Merck could be seen as a viable bidder," Leone opined.
"That said our analysis of potential strategic acquirers does suggest that there could be interest from other large biopharma companies as well. Overall, expected growth of the existing Seagen commercial portfolio, significant optionality of label expansion for key programs such as PADCEV, and general increased interest in the ADC modality post Destiny-Breast04, will likely support Seagen as a high-interest candidate," the analyst added.
It should be unsurprising, then, that Leone rates SGEN an Outperform (i.e. Buy). The analyst also sets a $220 price target that indicates his confidence in a 24% upside over the next 12 months. (To watch Leone's track record, click here)
Rapid shares gains and merger interest have Wall Street, generally, attentive to Seagen. Some of the analysts are bullish, while others are more wait-and-see; the 12 recent analyst reviews include 8 Buys and 4 Holds, for a Moderate Buy consensus rating. Shares are currently trading for $176.77 and the average price target has not yet caught up with the stock's recent surge; the analysts are still pointing toward a price of $176.30 in the next year. It will be interesting to see how that changes as more analysts update their stances on the stock. (See Seagen stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.