Top Buys From Bay Street: 3 New Upgrades You Need to Know About Now

Need juicy ideas? This trio of recently upgraded stocks, including IAMGOLD (TSX:IMG)(NYSE:IAG), might provide the opportunities you’re looking for.

| More on:

Hi, Fools. I’m back again to highlight three stocks that were recently upgraded by Bay Street. Although it’s always best to take analyst opinions with a grain of salt, newly upgraded stocks can be a good source of buy ideas.

As I always tell regular readers, it’s the investment thesis behind the rating — not the upgrade itself — that is most important.

So, without further ado, let’s get to it.

Engineering gains

First up, we have WSP Global (TSX:WSP), which Desjardins Securities upgraded from hold to buy on Thursday. Along with the upgrade, Desjardins analyst Benoit Poirier maintained his price target of $76, representing about 13% worth of upside to where the stock sits now.

Poirier believes WSP’s recently unveiled strategic plan “should be achievable.” The company’s goal is to increase net revenue to $8 billion-$9 billion, while posting adjusted operating margins of 11.5%-12.5% over the next three years. Poirier says that WSP’s exposure to the stability-providing public sector should serve it well in meeting those objectives.

WSP is already up 15% over the past month versus a gain of 7% for the S&P/TSX Capped Industrials Index. But when you couple a dividend yield of 2.3% with management’s solid track record, there should be plenty of long-term upside to be had.

Mullen it over

Next up, we have Mullen Group (TSX:MTL), which Raymond James upgraded from market perform to outperform earlier today. Along with the upgrade, Raymond analyst Andrew Bradford maintained his price target of $15.60, representing about 26% worth of upside from where it sits now.

Bradford thinks Mullen’s current price presents a rare value-based opportunity. Specifically, he believes the pessimism surrounding Mullen’s oilfield services is overblown, and expects LNG related pipeline stringing alone to raise 2020 EBITDA by 7%-8%. Moreover, he says that Mullen’s trucking outlook will probably be more positive even amid a slowing economy.

Mullen shares are down 24% over the past six months — versus a loss of 24% for the S&P/TSX Capped Energy Index — and boast a juicy dividend yield of 4.5%. In other words, the risk/reward trade-off is certainly attractive.

Golden choice

Rounding out our list this week is IAMGOLD (TSX:IMG)(NYSE:IMG), which was upgraded by Desjardins Securities from “hold” to “buy” earlier this week. Along with the upgrade, Desjardins analyst Josh Wolfson maintained his price target of $6, representing roughly 24% worth of upside from where the stock sits now.

IAMGOLD recently announced that it will not proceed with the construction of its Ontario Cote Gold project, and Wolfson is very bullish on that decision. According to Wolfson, IAMGOLD now sits in a healthier position, as the project would’ve led to increased financial and development risks. In fact, Wolfson now sees the company’s liquidity position and steady production as key advantages over other gold stocks.

IAMGOLD remains down 32% over the past six months versus a loss 4% for the S&P/TSX Capped Materials Index.

The bottom line

There you have it, Fools: three newly upgraded stocks worth checking out.

As always, don’t view them as a bunch of formal recommendations. They’re simply ideas for further research. The track record of professional analysts is infamously mixed, so plenty of due diligence is still required.

Fool on.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Mullen is a recommendation of Stock Advisor Canada.  

More on Investing

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »