Top Stock Picks From The Street’s Best Female Analysts

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Next time you see a rating from a female analyst consider the following; a study published in the Journal of Accounting Research has shown that female analysts issue bolder and more accurate forecasts. The author, Dr Alok Kumar, examined over 2 million stock forecasts made by 17,240 analysts covering a total of 13,636 stocks.

However, these findings are not related to the natural investing ability of men vs women. Multiple studies show that women are actually more risk averse and less competitive in their investing behavior. Instead the answer lies in male-dominated nature of the financial services professions. Over the entire 1983 to 2005 sample period, Kumar found only about 16 percent female analysts.

This leads to the crux of the study: “Overall, due to a self-selection process, only women with above average abilities would choose the analyst profession and, consequently on average, female analysts are likely to be more skillful than male analysts.”

In light of the above, we used TipRanks to identify the 3 of the Street’s top female analysts and the stocks they like best right now. TipRanks uses a natural language processing algorithm to rank over 4,700 analysts based on two factors 1) average return and 2) success rate of their buy-sell recommendations

So without further ado, let’s take a closer look now:

Helane Becker: Southwest Airlines (LUV)

Cowen & Co’s managing director Helane Becker is the number 1 services sector analyst on TipRanks. This is down to her impressive 77% success rate and 24.2% average return on stock recommendations.

Right now, Becker is betting on the fortunes of major US airline stock Southwest Airlines. This is an airline which is currently 97% focused on domestic business- so there is immense potential for international expansion. “Southwest has a good balance sheet, it delivers a good product to customers, particularly leisure customers, (and) they pay a dividend and buy back stock,” Becker recently told Forbes. She has a $67 price target on LUV (16.4% upside potential).

She has even raised the possibility that Warren Buffett could be interested in snapping up the airline. Indeed, with a market cap of 34.1 billion the company easily fits within Buffett’s massive $116 billion budget. The hedge fund guru recently remarked to CNBC that he “wouldn’t rule out owning an entire airline.” Becker suggests that LUV could be the perfect airline to fit the bill. Buffett is someone “who looks for opportunities where there’s a potential for growth” explains Becker- and Southwest can keep growing 6 to 10%.

This move would cement Buffett’s U-turn on airline stocks. As recently as 2013 he remarked that the airline industry was a ‘death trap’ to investors. However, he now owns over $3 billion of LUV stock with further billion-dollar holdings in Delta Airlines (DAL), American Airlines (AAL) and United Continental (UAL).

Overall, we can see from TipRanks that LUV boasts a cautiously optimistic Moderate Buy analyst consensus. In the last three months this breaks down into 4 buy ratings and 2 hold ratings. Meanwhile the average analyst price indicates big upside potential of 25%.

Ritu Baral: Global Blood Therapeutics (GBT)

Senior biotech analyst Ritu Baral is a managing director at Cowen & Co. She is also one of the Top 5 healthcare analysts tracked by TipRanks. Her success rate may only be 55%, but at 35.4% her average return per buy-sell recommendation is very high.

Her most recent recommendation is fast-growing Global Blood Therapeutics, which as the name suggests develops treatments for grievous blood-based disorders. She sees GBT reaching $83 in the coming months, indicating 38% upside potential.

“We think GBT has a very promising platform of small molecule candidates to treat blood based disorders” writes Baral in an investor report on March 7. In particular, the company is carrying out a Phase ½ trial of GBT440- a once-daily, oral therapy for sickle cell disease. Sickle cell disease is marked by severe pain, recurrent hospitalizations, multi-organ damage, and early mortality.

Even though the current data on GBT440 is preliminary and only based on a small patient numbers, the drug has still “shown consistent, profound benefit in key surrogate and biomarkers of disease with good safety to date.” Most excitingly, Baral believes that an expansion into the treatment of hypoxic respiratory diseases (such as idiopathic pulmonary fibrosis (IPF) and ARDS) is ‘highly promising’ due to the preclinical data and scientific rationale.

But Baral isn’t the only analyst bullish on GBT right now- far from it. In the last three months GBT has received 10 back-to-back buy ratings. That means no hold or sell ratings here. And with an average price target of $76 analysts are forecasting 27% upside potential from the current share price.

Laura Martin: Facebook (FB)

Five-star Needham analyst Laura Martin is the 19th top services analyst on TipRanks. Across her 227 stock ratings, she scores a 64% success rate and relatively high 16.2% average return.

One of Martin’s favorite stocks right now is social media giant Facebook. Following strong Q4 results she reiterated her take on FB as a “Top Pick for 2018’. Looking ahead Martin sees prices capable of spiking 17% to hit $215.

She is a fan of the stock for multiple reasons including its: a) strategic position; b) financial momentum; c) mobile ad dominance; d) valuation; e) new revenue streams; f) revenue diversification; and, g) deep moats.

Indeed, Martin is confident that “With 1.4B daily active users and 2.1B monthly users (at 9/30/17) using FB’s family of apps about 50 minutes a day, FB is the dominant mobile aggregation platform for finding and connecting people globally.” Crucially, she believes that the transition in focus to "meaningful interactions" from "passive viewing" should elevate ultimately raise the company's pricing power with advertisers.

In fact, the Street appears to share her confidence in FB’s upside potential. The stock has a ‘Strong Buy’ outlook with no less than 28 recent buy ratings vs just 2 hold ratings and 1 sell rating. The average analyst price target of $228 indicates 24% upside potential.

Our database covers over 5,000 stocks. Find your own “Strong Buy” stocks in the sector that interests you the most. Go to the Nasdaq Smart Portfolio stock screener now.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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