There are several different approaches to choosing a 'top' pick for the remainder of the year. If you are trying to produce the biggest gain, then the best choice is likely to be a highly speculative small-cap stock. These stocks can fly or die because they have extremely high levels of risk. They need to be actively managed and are not a good choice for passive investors.
There are some speculative names that I will be discussing in the future, but today I want to discuss a stock that I think has a very good balance between risk and reward and may not require the same level of trade management. The valuation is very attractive, and it is in a great niche, but due to some uncertainty, it has enough risk that it can produce a substantial gain if the market embraces the bullish narrative.
Digital Turbine (APPS) is the leader in end-to-end mobile advertising. It offers a media software platform that enables mobile operators and OEMs to control, manage, and monetize advertising on a variety of devices. APPS uses tracking systems and allows for targeted advertising.
In February, the stock was under pressure because of concerns that Alphabet (GOOGL) was putting new privacy measures in place that would limit some tracking. Apple (AAPL) had previously made a similar move which hurt Meta Platforms (FB) .
Analysts believe that the Google privacy changes will not have a significant impact on APPS and have kept growth estimates and price targets largely the same.
The stock has had substantial growth and is looking for continued growth in the future. In its most recent quarter, revenue jumped 324%. For 2022 the company foresees EPS of $1.67 versus $0.74 in 2021, which is growth of 126%.
In the last three months, four analysts have issued "buys" with an average price target of $94.50. The most recent from Oppenheimer is $117, and it noted that APPS is one of its top picks with a favorable valuation.
Technically the stock has been under pressure since November as growth stocks fell out of favor but has bounced since mid-March and is forming a new base of support.
I feel that Digital Turbine is a solid pick for the balance of the year and should post a strong first quarter of earnings that will confirm its growth prospects.