Finding the right stocks is the key to successful investing, but it’s not easy at all. The answer to the question, which stocks to buy? It’s no secret, but it’s hidden, in the torrent of data the markets produce. What we need are some clear signals that will cut through the noise and point to the appropriate stocks for these times.

The amount of data, and the utter impossibility of analyzing it all in real time, is a formidable barrier to successful stock picking — but Wall Street analysts control that part, turning the question into a more manageable one: Which analysts to follow? The quick answer is to follow the best analysts.

That takes us to Raymond James Analyst John Freeman. This 5-star stock expert is a permanent resident in between The best analysts contribute to the TipRanks database; The 66% success rate of his stock calls, and the 39% average return these calls will bring to the investors who follow them, have Freeman standing tall among his peers on Wall Street. It is currently ranked second out of 8,170 analysts.

In recent weeks, Freeman has picked three stocks he believes are poised for gains of more than 70%. Let’s open a file TipRanks database And get the lowdown.

Marathon Oil Corporation (MRO)

The first “Freeman’s pick” we’ll look at is Marathon Oil, a $17.4 billion oil industry leader. Spun off from parent company Marathon Petroleum in 2011, Marathon to focus on hydrocarbon exploration and production, has since built its business on some of the best producing regions for oil and natural gas in the United States. The Texas-based company has major production activities in the Bakken, Eagle Ford, Delaware, and Stack/Scoop regions, spanning from Texas to Montana.

These extensive operations produced strong production numbers, which is the basis for Marathon’s financial success. In Q322, the company averaged 295,000 barrels of oil equivalent per day, with oil production making up 166,000 net barrels of that total. The company generated $2.25 billion in total revenue from this production, up 55% year-over-year.

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Other financial metrics in the third quarter were also strong. Net income was $817 million, or $1.22 per share. On an adjusted basis, those numbers were $832 million and $1.24. Adjusted earnings per share were up more than 217% year-over-year. Cash flow, which underpins dividend and other shareholder returns, has also been strong; Marathon had $1.556 billion in net operating cash for the quarter, and after factoring in working capital, it still amounted to $1.44 billion in cash flow. This included $1.03 billion in adjusted free cash flow.

Marathon returned $1.2 billion to shareholders during the quarter, primarily through share buybacks — but also through a modest dividend. This payment, in the latest announcement, was set at 9 cents per common share for payment on December 12th. The main point of the dividend is the rapid rate at which Marathon has raised it — since the February quarter of 2021, the dividend has increased by 200%.

Freeman sees Marathon’s strong commitment to preserving share value — and returning share value to shareholders — as one of the most attractive features of this stock.

“Marathon represents one of the few companies in our coverage with flat/increasing share metrics thanks to an incredibly aggressive buyback program. Q4 ’22 will be the low point, with MRO announcing that they intend to buy back approximately $300 million of inventory during the quarter. , which is 51% of CFFO over the year. Assuming the same return next year, we estimate a 13% return on buybacks and a 15% total shareholder return.”

The chief analyst summed up: “Given Marathon’s strong balance sheet, and first-class yield strategy, we reiterate our Strong Buy rating.” This rating comes with a price target of $48 which would mean a one-year gain of approximately 82%. (To watch Freeman’s track record, click here)

Overall, the Street consensus rating on Marathon Oil is Moderate Buy, based on 14 recent analyst reviews that include 7 Buys, 5 Holds, and 2 Sells. Shares are priced at $26.38 and an average price target of $34.86 indicates an upside potential of about 32% over a one-year horizon. (See MRO stock forecasts on TipRanks)

North oil and gas (wedge)

The next company is Northern Oil and Gas, which is an exploration and production company in the North American market. Northern focuses its operations in North Dakota and Montana, specifically in the Williston Basin, but also has activities in the Marcellus shale in Pennsylvania and West Virginia, and in the Permian Basin on the borders of Texas and New Mexico.

Like Marathon above, Northern’s recent third quarter results show that strong production numbers are fundamentally sound results. The company produced 79,123 barrels of oil equivalent per day in the third quarter, which is a record for the company, an increase of 37% over the same period last year. Of the total, 57% was oil, and the remainder was natural gas and natural gas products.

Northern generated $276.8 million of GAAP cash flow for the quarter, with cash from operations coming in at $269.3 million. This was a 7% increase quarter over quarter and included $110.6 million in free cash flow. Fuel flow rate increased by 99% year-on-year.

During the third quarter, Northern closed on a large acquisition in the Texas-Delaware Basin. The company acquired properties from Alpha Energy Partners, settling for $155.1 million in cash. This is a proven acquisition, with production next year expected from 3,000 to 3,500 barrels of oil equivalent per day.

For return-minded investors, we should note that Northern began paying a dividend in the June quarter of last year, at 3 cents per common share; The company has increased the payment in every quarterly announcement since then, and the latest, at 30 cents per common share, is a 20% increase from the last payment. The 30 cent div is scheduled to be paid on January 31, 2023. At this rate, it will convert annually to $1.20 and a yield of 3.7%.

Freeman noted that Northern saw higher-than-expected capital expenditures during the third quarter, mainly related to the company’s recent acquisition moves. Looking ahead, he writes of Northern Northern’s capital guidance: “NOG’s capital guidance hit significantly with a full-year uptick of 11% to $485m at the halfway point. The bumps are not without benefits, with net spot up 3% and up Wells net added production up 6.5%. It also makes sense that NOG has had more success on the ground games this year than they expected.”

“The company has made significant additions to running wells each quarter this year, from 49.1 in the first quarter to 61.5 in the third quarter. We’re not naive enough to think NOG will be insulated from inflationary pressures, but a 5% increase in AFEs from last quarter stands well ahead of their peers in the industry,” Freeman added.

To that end, Freeman rates NOG a Strong Buy, while his $60 price target implies an 85% price increase in the coming year.

Overall, Northern Oil and Gas has a Strong Buy rating from the analyst consensus, based on 10 recent reviews which split 9 to 1 in favor of overbuying. With a trade price of $31.32 and an average price target of $50.30, Northern has an average upside probability of about 61% for the year ahead. (See NOG Stock Predictions on TipRanks)

Antero Resources (AR)

The last stock on Freeman’s list of picks is AR, or Antero Resources. This company is a natural gas producing company that operates in the Upper Ohio River region, in the Marcellus and Utica shale formations where Pennsylvania, Ohio and West Virginia meet. This region, located in the heart of Appalachia, has long been known as one of the richest natural gas basins in the United States. Antero has more than half a million net acres of productive holdings, with over 17.7 trillion cubic feet of proven natural gas reserves.

The company’s net production during the third quarter of the year 22 amounted to 3.2 billion cubic feet per day of natural gas, a total that includes 171 thousand barrels per day of natural gas liquids. This resulted in net cash from operations of $1.1 billion, free cash flow of $797 million and adjusted non-GAAP net income of $531 million.

Antero doesn’t pay a dividend, but the company has an aggressive share buyback program — which saw the company buy back more than 382 million shares during the third quarter. In Antero’s third-quarter financial statement, the company announced that it would increase license buybacks by $1 billion, for a new total of $2 billion.

In addition to propping up the share price with buybacks, Antero is also committed to reducing debt, and the company paid out $404 million during the quarter. As of Sept. 30, Antero had $1.17 billion in outstanding debt, a total less than about $1 billion so far this year.

Freeman sees Antero benefiting from continued increases in natural gas demand, and his outlook for next year paints a pretty picture of the company’s prospects.

“While guidance for 2023 is still a quarter away, RJe’s 2023 production of ~3.4 Bcf/d (roughly in line with the Street) represents an increase of approximately 5% year-over-year, which sets them apart from most of its Marcellus peers driven by both 1) increased ethane production across the Shell Petrochemical complex and 2) a net gain of 3.75% of WI on each well drilled after March 2023, following the conclusion of the AR Quantum joint venture,” Freeman noted.

The analyst added, “Currently, AR trades at an EBITDA multiple of just 3.7 times, and yields a yield of 22% 2023 FCF – both best among large firms.”

Gauging his stance, Freeman gives Antero a Strong Buy rating with a price target of $55, indicating his confidence in an upside of 72% over the next 12 months. (To watch Freeman’s track record, click here)

Overall, there are 8 recent analyst reviews on file for Antero, and they include 5 Buys and 3 Holds — giving the stock a Moderate Buy consensus rating. Meanwhile, the average price target of $50.14 implies an upside of 57% from the current trading price of $31.82. (See the Antero stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best stocks to buya 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.