2022 has undoubtedly been a tough one for traders. Even accounting for the latest positive aspects, all the most important indexes are nonetheless down for the 12 months and the backdrop of financial uncertainty nonetheless hovers menacingly.
Such an setting makes it troublesome to search out the shares that are primed to cost forward, however one approach to type the wheat from the chaff is to comply with within the footsteps of legendary inventory pickers.
And few are as well-versed within the investing recreation as billionaire Steve Cohen. Well-known for his high-risk, high-reward buying and selling model, the hedge fund supervisor’s Point72 agency boasts $25 billion of property beneath administration, with Cohen’s web price estimated to be round $16 billion.
So, when Cohen makes some strikes, it’s solely pure for traders to concentrate. Just lately, Cohen has been loading up on two names, and we’ve delved into the TipRanks database to get the lowdown on these tickers. Seems it’s not solely Cohen who thinks these shares are price a punt. In keeping with the analyst consensus, each are rated as Sturdy Buys, too. So, let’s see what makes these names interesting funding selections proper now.
Precise Sciences (EXAS)
The primary Cohen’s decide we’re taking a look at is Precise Sciences, a molecular diagnostics specialist centered on most cancers prevention, with its instruments serving to to detect cancers whereas nonetheless within the early phases.
The corporate’s preliminary product was the colon most cancers take a look at, Cologuard, launched in 2014 as the primary stool DNA take a look at for colorectal most cancers. Initially centered on the early identification and prevention of colorectal most cancers, Precise Sciences has since expanded its product line to incorporate extra oncological screening and precision testing for a lot of types of most cancers.
The corporate’s newest quarterly report was a beat-and-raise affair. Precise delivered income of $523.07 million, amounting to a 15% year-over-year enhance whereas beating the consensus estimate by $19.95 million. Likewise, on the bottom-line, EPS hit -$0.84, bettering the Road’s forecast for -$1.07. And for the outlook, on account of the quarter’s strong beat, the corporate raised its full 12 months 2022 income steering from $1.980-2.022 billion to $2.025-2.042 billion.
It’s no surprise, then, that an investor like Steve Cohen would take an curiosity in an organization like Precise Sciences. In Q3, Cohen’s Point72 made a major purchase in EXAS shares, totaling 2.43 million shares, which on the present share value at the moment are price over $104 million.
Canaccord analyst Kyle Mikson additionally sees loads of purpose for an upbeat outlook right here. He writes, “Whatever the path that the colorectal most cancers screening market takes over the subsequent a number of years, we stay bullish that Precise’s Cologuard enterprise needs to be a constant strong progress asset over time. We’re additionally extremely passionate about Precise’s long-term progress potential given its many pipeline property, progress towards reaching profitability (with out pursuing dilutive choices) and efficiency. We imagine the corporate is on monitor to execute on its core long-term progress technique.”
Accordingly, Mikson charges EXAS shares a Purchase, backed by a $70 value goal. There’s loads of upside – 63% to be precise – ought to the goal be met over the subsequent 12 months. (To observe Mikson’s monitor report, click on right here)
Total, 12 analysts have supplied their views on Precise and these break down into 9 Buys and three Holds, offering the inventory with a Sturdy Purchase consensus score. At 57.67, the typical goal implies shares will ship returns of ~35% over the approaching months. (See EXAS inventory forecast on TipRanks)
Horizon Therapeutics (HZNP)
The following Cohen-endorsed identify is Horizon Therapeutics, a biopharmaceutical firm centered on bringing to market drugs for uncommon, autoimmune and extreme inflammatory ailments. Horizon has a deep and different drug portfolio which incorporates thyroid eye illness (TED) remedy Tepezza, gout treatment Krystexxa, and urea cycle dysfunction remedy Ravicti, amongst others.
All contribute to the income haul with Tepezza main the best way. Though in Q3, the drug’s gross sales declined by 20% year-over-year to $491 million, the determine amounted to a 2% sequential enhance and allayed fears of a much bigger pullback. The truth is, whereas complete income fell by 10% from the identical interval a 12 months in the past to $925.4 million, the determine beat the Road’s forecast by $37.76 million. There was additionally a beat on the underside line, with adj. EPS of $1.25 coming in nicely forward of the $1.01 anticipated on Wall Road.
Even higher, the corporate additionally delivered with its outlook; the full-year gross sales information was elevated from $3.59 billion to $3.61 billion (consensus had $3.56 billion).
Other than its product portfolio, the corporate has a bulging pipeline which received an actual enhance from final 12 months’s acquisition of Viela Bio. The $3 billion deal helped the corporate not solely get its palms on Viela’s lead candidate Uplizna, which has been authorized to deal with neuromyelitis optica spectrum dysfunction (“NMOSD”) within the US, but in addition strengthened the pipeline with three property indicated to deal with autoimmune ailments resembling systemic lupus erythematosus (SLE), sjögren’s syndrome and rheumatoid arthritis.
Cohen evidently thinks the corporate is making all the suitable strikes. In Q3, he opened a brand new place and purchased 2,094,400 shares. These at the moment are price over $157 million.
Wanting forward, Wells Fargo analyst Derek Archila factors out that subsequent 12 months has loads on faucet: “We predict 2023 might be an enormous 12 months for HZNP’s pipeline, which we imagine is underappreciated and will generate upside for shares. There are a number of scientific catalysts that we predict might assist HZNP shares re-rate and get traders to assign extra terminal worth that’s not within the inventory at these ranges.”
Expounding on the above, Archila added, “Tepezza’s low CAS/persistent TED trial will learn out in 2Q23, which is vital to increasing its use in a a lot bigger set of TED pts than excessive CAS/lively. Past this, we’re most all in favour of daxdilimab’s SLE Ph2 trial in 2H23, which is de-risked by BIIB059 and its Ph2a trial in alopecia areata in 2023. We predict this might be a ‘pipeline-in-a-product’ given there are lots of autoimmune situations the place Sort I IFN is implicated. Additionally, knowledge from dazodalibep in Sjogren from a number of populations might be reported within the 1H23.”
Given all the above, Archila has excessive hopes. Together with an Obese (i.e., Purchase) score, he set a $118 value goal on the inventory. This goal places the upside potential at 57%. (To observe Archila’s monitor report, click on right here)
Total, most of Archila’s colleagues again his bullish stance. Primarily based on 9 Buys vs. 2 Holds, the analyst consensus charges the inventory a Sturdy Purchase. The forecast requires one-year positive aspects of ~30%, given the typical goal stands at $97.45. (See HZNP inventory forecast on TipRanks)
To seek out good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched instrument that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is extremely vital to do your personal evaluation earlier than making any funding.