Some chase rapid growth, others hunt for undervalued gems, and many swear by the steady stream of dividend payouts. You might prefer an active, hands-on strategy – buying low, selling high, and pivoting with the market’s every move. Or maybe you’re more of a long-game player, building your portfolio patiently and letting time do the heavy lifting.
Whatever your style, one truth remains: success starts with picking the right stocks. There’s no magic formula, no secret handshake – just data. Mountains of it. With thousands of stocks and millions of trades flying across the markets every day, the challenge isn’t a lack of information – it’s knowing what to look for, and how to cut through the noise.
The Smart Score tool, developed by TipRanks, uses AI and natural language processing to do just that. The algorithm gathers and collates all of the market data – and then uses it to compare every stock to a set of factors that have been proven to predict future outperformance. Those comparisons are then converted into a simple score, a single digit on an intuitive 1-to-10 scale, with the ‘Perfect 10s’ showing stocks that investors should definitely give some greater scrutiny.
We’ve opened up the Smart Score to look up two high-scorers that are grabbing attention from Wall Street’s analysts and have earned the ‘Perfect 10’. Let’s take a closer look.
First Merchants Corporation(FRME)
The first ‘Perfect 10’ stock we’ll look at is a banking company, First Merchants Corporation. This holding company is the parent of First Merchants Bank, and is based in Muncie, Indiana: First Merchants Bank has a strong presence as a regional bank in Indiana, Ohio, and Michigan, with 110 branch locations.
The bank’s services include personal banking, as well as wealth management. Personal banking services include checking and savings accounts, online and mobile banking, loan and credit services, and money transfers. On the wealth management side, the bank offers investment services, financial and estate planning, and retirement planning. Like many regional banks, First Merchants prides itself on offering a more personalized service.
First Merchants has total assets of $18.3 billion, including $12.9 billion in loans on the books as of December 31, 2024. Over the course of 2024, the company’s total loans grew by 2.9%, or $368.1 million in dollar terms.
Looking at the most recent set of quarterly results, for 4Q24, we find that First Merchants had total revenues of $177.11 million, beating the forecast by $9.27 million and growing 13.2% year-over-year. At the bottom line, the company realized a net income of $64 million, with the quarterly EPS of $1.10 beating expectations by 15 cents per share.
This stock has caught the attention of Piper Sandler analyst Nathan Race, who sees plenty of positives here. Race writes, “We reiterate FRME as our 2025 top pick with additional outperformance expected this year driven by FRME’s strong operating leverage outlook with both solid organic B/S and core fee income growth, at least NIM stability, minimal operating expense increases as well as likely benign credit quality. We view FRME’s still discounted current valuation as an attractive entry point, and believe FRME’s multiples will likely expand in-line with, if not above, peers. FRME’s building excess capital flexibility may also support additional proactive returns to shareholders via buybacks… Overall, our recent discussion with mgmt. reinforced our conviction that FRME is among the best positioned to outperform this year.”
Race quantifies his position on FRME with an Overweight (i.e., Buy) rating and a $55 price target that suggests a 35% gain in the next 12 months. (To watch Race’s track record, click here)
While there are only 4 recent analyst reviews on file for FRME, they are all positive – for a unanimous Strong Buy consensus rating. The stock is currently trading for $40.84 and its $51.75 price target implies a one-year upside potential of 27%. (See FRME stock forecast)
Full Truck Alliance(YMM)
Next up on our look at ‘Perfect 10s’ is Full Truck Alliance, an interesting company in the Chinese tech and logistics sectors. The company is one of the world’s largest digital freight hauler platforms, operating across China. Full Truck connects shippers with truckers, facilitating arrangements for varying cargo types and weights, various shipment routes, and long-haul shipping. The company offers an array of value-added services, designed to smooth out the freight carriage business. These include, on the shipper end, a transportation management system and a freight brokerage, and on the trucker end, traffic monitoring software and fuel services. Both shippers and truckers can access credit and insurance services.
Key among Full Truck’s features are the freight listing and freight brokerage services. Together, these let shippers post their shipping orders and locate the most appropriate trucker for the job—and they let truckers find cargo and routes that best fit their own schedules. The company operates across China, and in the fourth quarter of 2024, the platform covered 300 cities, 100,000 routes, had an average shipper MAU (monthly active users, a key metric) of 2.93 million, and helped 4.14 million truckers fulfill shipping orders. We should note that the average shipper MAU figure represents a 31% year-over-year increase.
Earlier this month, Full Truck released its 4Q24 results. The company’s platform facilitated 56.9 million fulfilled orders in the quarter, up 24% year-over-year. Based on that success, the company brought in $434.9 million in quarterly revenue, for 28% year-over-year growth, beating the forecast by $21.53 million. At the bottom line, Full Truck’s non-GAAP EPS came to $0.14 per American Depositary Share (ADS), 1 cent per share better than the estimates. The company generated $157.6 million in net cash from operating activities.
This underlines a company with real strengths, and covering the stock, JPMorgan analyst Karen Li notes that Full Truck’s key strengths include its leading position in China’s freight transport market and its position as an early leader in the digital freight market.
“Full Truck Alliance (FTA) is the largest digital platform in China’s inter-city road freight transportation market, presenting a noteworthy investment opportunity. The company’s strategic transformation and improving margin profile are key elements of its investment thesis. As the logistics industry shifts towards digital freight platforms, FTA is positioned to play a significant role in this transition, gradually replacing traditional offline freight brokers,” Li opined.
“This strategic direction enhances FTA’s competitive edge and supports its market leadership, backed by a broad network and established presence. In addition, FTA is set for margin improvement, driven by a favourable product mix and a focus on transaction services… We believe FTA’s strategic initiatives and operational efficiencies will support its growth trajectory, making it a notable player in the evolving logistics landscape,” the analyst added.
Li goes on to rate YMM shares as Overweight (i.e., Buy), and she accompanies that with an $18 price target, showing her confidence in a 38.5% one-year upside potential for the stock. (To watch Li’s track record, click here)
The 7 recent analyst reviews here include 6 Buys and 1 Hold, for a Strong Buy consensus rating. The stock’s $12.99 trading price and $15.69 average target price together imply a 21% gain for the year ahead. (See YMM stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
