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Billionaire Ken Griffin Bets On These 3 “Strong Buy” Shares
Shares have risen since late October, buoyed by an election that could offer stability and news that effective vaccines for the novel coronavirus are closer than we dared to think. Rapid changes in the market are enough to make investors turn heads or, at least, to get them to turn to the experts to make sense of the financial landscape. In times like these, legends can offer guidance. We refer to the people who have transformed the way we play the investment game, namely Ken Griffin. Ken Griffin has a knack for math and finance. Since starting stock trading from his Harvard dorm in 1987, Griffin has amassed a personal fortune of over $ 15 billion and made a reputation on Wall Street as a giant in the hedge world. Although he is personally lonely, his investment decisions remain public and following Ken Griffin’s choices in stocks makes for a viable investment strategy. Griffin observes the market fall of last winter and describes the general rebound since March as “a macro trader’s dream”. Looking at the election, he sees the results as a net positive for the markets. The divided government, he says, along with a narrower Democratic majority, will empower the centrists and help avoid “crippling” tax increases. With that in mind, we wanted to take a closer look at three stocks that Griffin’s Citadel Fund has recently raised. By examining the tickers through the TipRanks database, we learned that each boasts a “Strong Buy” consensus rating from the analyst community and huge upside potential. Kadmon Holdings (KDMN) First we have Kadmon, which focuses on developing drug treatments for immune disorders and fibrotic diseases, and like many clinical research companies, the point of investment here is all about potential rather than earnings. Kadmon has two drugs in the pipeline: Belumosudil (KD025), which is in an advanced stage of testing as a treatment for chronic graft versus host disease (cGVHD) and systemic sclerosis; and the experimental KD033, which is being studied as immunotherapy for cancerous tumors. A new drug application (NDA) has been submitted to the FDA for Belumosudil in cGVHD, and is currently under review. Meanwhile, a phase 2 study in systemic sclerosis continues to be enrolled and a small, open-label phase 2 study is expected to begin in 1Q21. Additionally, KD033 is currently in a Phase 1 study of metastatic and / or locally advanced solid tumors. An active pipeline, especially one where drug candidates are steadily advancing, is sure to grab the attention of investors. Among the fans is Ken Griffin. 924,309 shares were purchased by Citadel in the third quarter, with the total holding now standing at 6,587,531 shares. The position is worth over $ 24 million, in fact, thanks to the company’s promising pipeline and share price of $ 3.80, Mizuho analyst Mara Goldstein believes investors should get in on the action. Belumosudil, a new ROCK2 inhibitor, has successfully completed a pivotal program (ROCKSTAR) in chronic transplantation against host disease and a submission to the FDA has been initiated. We believe this indication will generate US $ 628 million in revenue in 2030, which we believe is not fully appreciated by KDMN’s valuation. […] We also see potential opportunities from further indications and other candidates holding valuation downturn potential, “Goldstein noted. To this end, Goldstein values KDMN at Buy along with a price target of $ 13. This target conveys Goldstein’s confidence. KDMN’s ability to rise 246% from current levels. (To see Goldstein’s track record, click here) Do other analysts agree? They are. Only Buy ratings, 4, in fact, have been issued over the past three months. Therefore, the message is clear: KDMN is a strong buy. Given the average price target of $ 13.75, the stock could skyrocket by 266% over the next year. KDMN shares on TipRanks) K12, Inc. (LRN) Griffin’s next pick list is K12, a company in the education management organization niche or, in other words, a provider of school programs and educational resources designed to online learning as an alternative to traditional school systems. K12 was founded in 2000, but took off during the 2020 crown crisis, when social lockdown policies moved students to home education and online venues. The numbers prove it, as far as possible. K12 reported third quarter (FY Q1) revenue of $ 371 million, up 37% from the previous quarter and an even more impressive 44.3% year-over-year. The company’s general education business accounted for $ 313.8 million of that total, up 34.4 percent year-on-year. EPS jumped 150% sequentially, from 12 cents in the second quarter to 30 cents in the third quarter. Clearly, Griffin understood K12’s potential in the current environment, as he bought 447,703 shares of LRN during the third quarter. Griffin now owns over 496,000 shares in the company, and this stake is worth nearly $ 11.9 million. Barrington analyst Alexander Paris takes a bullish stance on this stock. Paris writes: “Management is cautiously optimistic about the possibility of growing by focusing on student retention (which has steadily improved in recent years) and its professional learning initiatives … investors have been attracted to its robust distance learning model. and they see the potential benefit of COVID -19 by stimulating demand for its services over the medium to long term. ”In line with these comments, Paris rates the stock as Outperform (ie Buy). Its price target of $ 60 shows the its confidence in a 150% upside for next year. (To see the Paris track record, click here) Again, this is a Strong Buy unanimous consensus rating stock, supported by 4 recent analyst reviews The shares have an average price target of $ 49.33, suggesting a 106% upside from the $ 24 trading price. (See K12 Stock Analysis on TipRanks) Overstock (OSTK) OR verstock is an online retailer that started its business in the wake of the dot.com bubble twenty years ago; Ironically, it started out as an ecommerce company by selling off the inventory assets of failed ecommerce companies. Today, Overstock is still involved in the closeout segment, but it also sells new products in the bedding, furniture and home decor niches. In the last quarter, Overstock beat out earnings and revenue estimates. EPS was expected to lose 22 cents, but posted a profit of 50 cents. On the top line, revenues grew 110% year-on-year to $ 731.7 million. Obviously, Overstock benefited from the corona pandemic which prompted more online retail, and OSTK shares benefited as well. The stock has risen by an astronomical 707% year to date, even after falling significantly from its late August high. A discount retailer with a strong online presence is a clear opportunity in the current climate and Griffin has taken advantage of it. His new position is OSTK which totals 110,281 shares, currently valued at $ 6.3 million. Writing for Piper Sandler, 5-star analyst Peter Keith observes: “[T]Yields in the fourth quarter “remain strong”, suggesting that it is entirely possible to continue growing around 100% in the quarter. New customer growth was + 141% y / y and OSTK recorded a sequential improvement in repeat customer purchase rate. ”The analyst concluded:“ Valuation at <1.0x NTM EV / S seems to us very cheap, especially considering a ~ $ 490M net cash position, which represents about 18% of the market capitalization. We would be aggressive buyers of the stock at current levels. "Keith gives OSTK an overweight (aka Buy) rating and its $ 140 price target implies a 145% rise over the next 12 months. (To see Keith's track record, click here) All in all , Overstock's Strong Buy consensus rating is based on 4 purchases and 1 suspension. The stock is selling for $ 57.10 and the $ 101 average price target suggests it has a one-year growth potential of 76% . (See OSTK Stock Analysis on TipRanks) To find good ideas for trading stocks at attractive valuations, visit TipRanks 'Best Stocks to Buys, a newly launched tool that combines all of TipRanks' equity insights. Opinions expressed in this article are solely those of the analysts present. The content is to be used for informational purposes only. It is very important that you do your own analysis before making any investments.
