Every Tuesday, I write about Barchart.com’s Top 100 Stocks to Buy and Bottom 100 Stocks to Buy. The former covers stocks with significant momentum higher; the latter are stocks with significant momentum lower.
Every once in a while, you’ll find a Bottom 100 Stock to Buy that is. The same goes for the Top 100 Stocks to Buy. Sometimes, momentum stocks remain a good thing despite the gains already made in the past year.
As I went about finding a story angle for today, I found that 11 of the Top 100 Stocks to Buy had moved up the rankings by at least 10 spots. Of those, five weren’t even on the list in Monday trading.
Here are three to buy with at least one from each group.
Graham Corp.
Graham Corp. (GHM) is ranked 65th of the Top 100 Stocks to Buy, down from 81st in Monday trading. Its weighted alpha is 141.24, less than its 52-week gain of 151.57%, which could suggest its recent movement has slowed somewhat. I chose it anyway. Here’s why.
If there's one kind of stock I really like, it is companies with little investor interest or following. Graham’s average 30-day volume is 153,688, about 1.4% of its outstanding shares. It has 268 followers at StockTwits.com. By comparison, Nvidia (NVDA) has 516,421.
Graham designs and manufactures mission critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, states StockTwits’ overview for the company.
GHM stock gained over 17% in the past week.
What’s the reason for this move? I’m not quite sure. It did make a big move in early June after reporting healthy Q4 2024 results that included a 12% increase in revenue over Q4 2023 and earnings per share of 15 cents, up from breakeven a year ago. Lastly, it finished the fiscal year with a backlog of $400 million.
To top things off, it paid off its long-term debt. Except for $7.8 million in operating lease liabilities, it has no debt. If you include its $16.9 million in cash, it has net cash of $9.2 million.
“Much of its defense business is tied to U.S. Navy nuclear sub and carrier contracts, which are top government priorities. The backlog provides some clarity about future quarters, and suggests Graham is on track to grow revenue by upward of 10% annually over the next few years,” stated the Motley Fool in June.
Orion Group Holdings
My wife runs a small construction company so any time I get a chance to write about the construction business, I take the opportunity.
Orion Group Holdings (ORN) is in 30th spot of the Top 100 Stocks to Buy, down from 40th in Monday trading. Its weighted alpha is 195.52, less than its 52-week gain of 255.34%.
As its investor presentation states, “Orion is a leading marine and specialty construction
company in the U.S., Canada and Caribbean Basin.” It has two operating segments: Marine (66% of revenue), and Concrete (34%).
In Q1 2024, its revenues were $160.7 million, slightly higher than a year earlier. Its adjusted loss of $4.0 million was less than half its loss from Q1 2023. Its focus for the remainder of the fiscal year is to bang out its $757 million backlog at higher margins.
“We expect revenue to continue to build throughout the year with our current backlog and strong pipeline of opportunities. We remain focused on increasing our margins as a top priority,” stated CEO Travis Boone in its Q1 2024 press release.
In 2024, it expects revenue of $905 million at the midpoint of its guidance with $47.5 million in adjusted EBITDA. The company continues to aggressively bid on marine construction projects. It said in its first quarter press release that its opportunity pipeline has nearly quadrupled in the past year to over $11 billion.
It is building for a strong 2024 and an even stronger 2025.
I like the Dec. 20 $15.00 call with a current ask price of $0.75, or a 5% down payment. Given its momentum, 39% appreciation doesn’t seem like all that much over the next five months or so.
It reports next Wednesday after the close.
Paysign
Paysign (PAYS) is 62nd on the Top 100 Stocks to Buy. It didn’t make the list in Monday trading. Its weighted alpha is 142.69, higher than its 52-week gain of 137%.
Paysign provides prepaid cards and processing services for the corporate, consumer, and government markets. Its products are marketed under the Paysign brand.
“Our suite of product offerings includes solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives,
consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit
accounts accessible with a debit card,” states its 2023 10-K.
“In the future, we expect to further expand our product into other prepaid card offerings such as travel cards and expense reimbursement cards. Our cards are sponsored by our issuing bank partners.”
The company generates a significant portion (79%) of its revenue from plasma donation centers that use its prepaid cards to pay donors for their plasma donations. It receives cardholder and interchange fees from these organizations.
It also generates 18% from the Pharmaceutical industry, which uses them to provide patients with out-of-pocket funds to pay for prescription drugs. It receives card program management fees, transaction claims processing fees, interchange fees, and settlement income for using and processing these cards.
The remaining 3% are other fees associated with its prepaid card products and services.
In Q1 2024, its revenues grew 30% year-over-year to $13.2 million, while its adjusted EBITDA was $1.7 million, up 135% from $720,000 a year earlier. It expects to continue growing both of these figures by double digits in 2024.
All four analysts who cover the stock rate it a Strong Buy (5.00 out of 5) with a target price of $6.12, 17% higher than where its stock is currently trading.
Its volume in Tuesday trading is 1.65 million, 8x its average 30-day volume. Something’s up.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
