The stock market experienced its largest correction in four years this summer. Amid the volatility, some analysts made profitable calls. Here are the five most profitable ratings from the period between July 1 and Oct. 3.
Imperial Capital analyst Bob McAdoo made the most profitable rating amid the recent market selloff when he affirmed an outperform rating on Republic Airways Holdings Inc. (RJET) on Aug. 27 with a $10 price target. McAdoo’s bullish rating stemmed from the failed attempt by the pilot union to increase compensation and improve work rules on their current contract. McAdoo noted, “With chapter 11 bankruptcy a potential alternative to a new contract, we suspect the national union ultimately will override the local union’s decision and allow for a pilot vote.”
The $10 price target reflects [his] belief that the pilots will ultimately ratify the current contract proposed by Republic and operations and share prices will return to normal. Shares of RJET were priced at $2.54 when McAdoo rated it and jumped to $6.43 by Oct. 3, a 138.1% profit when measured over the S&P 500. Overall, Bob McAdoo has earned a 55% success rate recommending stocks and a 2.6% average return per recommendation when measured over the S&P 500 and a three-month horizon.
Mark Breidenbach of H.C. Wainwright made the second most profitable rating during the selloff, issuing a buy on Can Fite Biopharma Ltd (CANF) with a $4 price target when shares were trading at $1.70 on Aug. 21. Breidenbach rated the company following its quarterly earnings, when the company posted a loss and a major customer left. Breidenbach noted, “Can-Fite’s current cash position could sustain operations until early 2017.” Shares of CANF shot up a few weeks after the rating when the company’s pipeline drug, CF102, received Fast Track status by the FDA. CANF rose 109.7% as shares quickly rose to $3.70 by Oct. 3. Overall, Mark Breidenbach has a 20% success rate recommending stocks with an average loss of 2.3% per rating when measured over the S&P 500 and a three-month horizon.
Imperial Capital analyst Scott Buck made the third most profitable rating since the selloff when he reiterated an outperform on Republic Airways on Sept. 2 with a $10 price target. Like McAdoo, Buck attributed his bullish rating to the national pilots union announcement that it would not recommend a vote on the final offer. He suspected “both parties will continue to negotiate and believe[s] an agreement is still possible.”
RJET traded at $3.01 on Sept. 2 and closed at $6.43 on Oct. 3. Buck’s call would have earned 99.3% when measured over the S&P 500. On average, Buck has a 69% success rate recommending stocks and a 23.9% average return per recommendation when measured over the S&P 500 and a three-month horizon.
The fourth most profitable rating came from Dave King of Roth Capital. He recommended to sell Quiksilver Inc. (ZQK) on Sept. 1 with shares trading at $0.41. Roth became bearish on the retail company and slashed his price target from $1.50 to $0 when it filed for bankruptcy. After King’s recommendation, Quicksilver plunged to less than $0.01. King’s sell rating produced a 96.60% return. Overall, King has a 44% success rate recommending stocks with an average loss of -1.0% per rating when measured over the S&P 500 and a three-month horizon.
Matt Koranda of Roth Capital made the fifth most profitable rating when he affirmed a buy on Adept Technology (ADEP) with a $10 price target on Sept. 1.
On the day of Koranda’s rating, ADEP shares were priced at $6.63. Just 16 days later, the analyst downgraded his rating on the stock to neutral after the company agreed to be acquired by Omron for $13 per share. As such, those who followed Koranda’s advice on the day of his initial recommendation would have earned a 90.7% return on their investment. Overall, Koranda has a 38% success rate recommending stocks and a +1.5% average return per recommendation when measured over the S&P 500 and a three-month horizon.