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Billionaire Steven Cohen chooses these three “strong buy” stocks
Last week, the NASDAQ dropped to less than 13,200, making the net loss from its historic peak, reached earlier this month, to be 6.4%. If this trend continues, the index will enter correction territory, a 10% loss from its peak. So, what exactly is going on? Basically, they are mixed signals. The COVID-19 pandemic is starting to disappear and the economy is starting to reopen – strengths that should boost markets. But an economic restart brings inflationary pressures: more people working means more consumers with money in their pockets, and the huge stimulus projects passed in the past few months – and the $ 1.9 trillion bill now in Congress – put additional funds in people’s wallet and liquidity in the economy. There is a pent-up demand out there and people with money to spend, and both factors will work to raise prices. We can see an effect of all this on the bond market, where the ten-year Treasury bond is yielding 1.4%, close to the one-year high, and has been trending upwards in recent weeks. This may be the case for jumping the gun, however, as Federal Reserve Chairman Jerome Powell said in testimony before the Senate that he is not considering a move to raise interest rates. In other words, these are confusing times. For those who feel lost in the fog of the stock market, investment gurus can offer a sense of clarity. Nobody more than billionaire Steven Cohen. Cohen’s investment firm, Point72 Asset Management, has a strategy that involves investments in the stock market, as well as a more macro approach. That same strategy consolidated Cohen’s status as a highly respected investment powerhouse, with the guru earning $ 1.4 billion in 2020 thanks to a 16% gain in Point72’s main hedge fund. With that in mind, our focus has shifted to Point72’s most recent 13F deposit, which reveals the shares the fund snapped up in the fourth quarter. Fixing on three tickers in particular, the TipRanks database revealed that each gained a “strong buy” analyst consensus and has significant appreciation potential. Array Technologies (ARRY) The first new position is at Array Technologies, a ‘green technology’ company that provides tracking technology for large-scale solar projects. It is not enough to just deploy enough photovoltaic solar collection panels to power an energy utility; the panels must track the sun in the sky and take into account seasonal differences in their path. Array offers solutions to these problems with its DuraTrack and SmarTrack products. Array is proud that its tracking systems will improve the efficiency of the life of solar panel projects, and that its SmarTrack system can increase energy production by 5% overall. The company clearly impressed its customers, as it has facilities in 30 countries, in more than 900 public utility projects. President Biden is expected to take executive action to boost green economic policy at the expense of the fossil fuel industry, and Array could benefit from this political environment. The shares of this company are new to the market, having held its IPO in October last year. The event was described as the ‘first major solar IPO’ in the United States in 2020 and was a success. The shares opened at $ 22 and closed the day at $ 36. The company sold 7 million shares, raising $ 154 million, while another 40.5 million shares were placed on the market by Oaktree Capital. Oaktree is the investment manager who has owned a majority stake in the company since 2016. Among the fans of Array is Steven Cohen. With 531,589 shares in the fourth quarter, Point72’s new ARRY position is worth more than $ 19.7 million in the current valuation. Guggenheim analyst Shahriar Pourreza also appears to be confident about the company’s growth prospects, noting that the shares appear undervalued. “Renewable energy companies have seen a huge influx of capital as a result of the ‘blue wave’ and the control of Democrats in the White House and in both chambers of Congress; however, ARRY continues to negotiate a significant discount for peers, “noted the 5-star analyst. Pourreza added:” We remain optimistic about ARRY’s growth prospects driven by 1) gains from the crawler’s market share compared to fixed tilt systems, 2) ARRY gains in market share within the crawler industry, 3) ARRY’s great opportunity in the international market less penetrated, 4) the opportunity to monetize its existing customer base in the long term through extended warranties , software updates, etc., which are highly margin accretive. ”In line with these optimistic comments, Pourreza values ARRY’s shares as Buy, and its target price of $ 59 implies a 59% increase from current levels. (To see Pourreza’s track record, click here) New stocks in growing industries tend to attract the attention of Wall Street professionals, and Array has 8 reviews recorded since it went public. Of these, 6 are purchases and 2 are retentions, making the consensus rating on the stock a strong buy. The average target price of $ 53.75 suggests room for a ~ 45% rise in the next 12 months. (See ARRY’s stock analysis at TipRanks) Paya Holdings (PAYA) Cohen’s second choice we are looking at is Paya Holdings, a North American payment processing service. The company offers integrated payment solutions for B2B operations in the sectors of education, government, healthcare, non-profit organizations and public services. Paya boasts more than $ 30 billion in payments processed annually, to more than 100,000 customers. In mid-October last year, Paya completed its move to the public market through a merger of SPAC (special acquisition company) with FinTech Acquisition Corporation III. Cohen is standing with the bulls on this one. During the fourth quarter, Point72 took up 3,288,843 shares, bringing the holding to 4,489,443 shares. After this increase of 365%, the value of the position is now ~ $ 54 million. Mark Palmer, a 5-star analyst at BTIG, is impressed by Paya’s medium-term prospects, writing: “We expect PAYA to generate revenue growth in the early teens over the next few years, with Integrated Solutions poised to grow in the mid-twenties. 20 and payment services are expected to grow around one digit. At the same time, the company’s operating expenses are expected to grow in the context of 5%, in our view. As such, we believe that PAYA’s adjusted EBITDA growth will be 20% to the north in the coming years, and that adjusted EBITDA margins will expand to 28% in YE21 from 25% in 2019 ”. Palmer sets a target price of $ 18 for PAYA’s shares, indicating his confidence in a 49% growth for the next year, and classifies the shares as a Buy. (To view Palmer’s track record, click here) PAYA’s strong buying analyst consensus rating is unanimous, based on 4 buyer reviews defined in the past few weeks. The shares have an average target price of $ 16, which suggests a potential increase of ~ 33% from the current price of $ 12.06. (See the analysis of PAYA shares in TipRanks) Dicerna Pharma (DRNA) Last, but not least, is Dicerna Pharma, a clinical biotechnology company with a focus on the discovery, research and development of treatments based on its platform. RNA interference technology (RNAi). The company has 4 drug candidates in various stages of clinical testing and 6 in preclinical studies. The company’s pipeline clearly caught the eye of Steven Cohen – to the point of taking on a new stake, totaling 2.366 million shares. This stake is worth $ 63.8 million in current values. The most distant candidate drug along the Dicerna duct is nedosiran (DCR-PHXC), which is being investigated as a treatment for PH, or primary hyperoxaluria – a group of several genetic disorders that cause life-threatening kidney disorders through overproduction of oxalate. Nedosiran inhibits the enzyme that causes this overproduction and is undergoing a Phase 3 test. First-line results are expected in mid-21 and, if all goes as planned, an NDA application for nedosiran is expected by the end of the 3Q21. Covering Leerink’s shares, analyst Mani Foroohar sees nedosiran as the key to the company’s future in the short term. “We hope that Nedosiran will be able to see approval in mid-2022, putting the drug about a year and a half behind competitor Oxlumo (ALNY, MP) in PH1 … A successful outcome will transform DRNA into a commercial rare diseases in an attractive duopoly with the best brands in the category, “Foroohar noted. To that end, Foroohar classifies DRNA as Outperform (ie purchase), and its $ 45 target price suggests a potential upward trend of 66 % in one year. (To watch Foroohar’s history, click here) Altogether, Dicerna Pharma has 4 purchase reviews recorded, making the purchase strong unanimous. DRNA shares are trading at $ 26.98, and their average price $ 38 target puts the upside at ~ 41% over the next 12 months. (See DRNA stock analysis at TipRanks) To find good ideas for stock trading with attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool recently launched that brings together all the insights from TipRanks. Disclaimer: The opinions expressed in this article are only those of the analysts presented. ntent is intended to be used for informational purposes only. It is very important to do your own analysis before making any investments.