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MarketWatch
Stock market is at the start of a selloff, says veteran trader Larry Williams
Attention, investors: Spooky times are on the way for the stock market. Starting right about now, the stock market will see a significant and sustained selloff through about Oct. 10. It’s riding for a fall, too, despite the widespread misbelief that it protects you against losses in weak stock markets.
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Bloomberg
Perelman Selling Almost Everything as Pandemic Roils His Empire
(Bloomberg) — Bit by bit, billionaire Ronald O. Perelman is parting with his treasures.His Gulfstream 650 is on the market. So is his 257-foot yacht. Movers hauled crates of art from his Upper East Side townhouse after he struck a deal with Sotheby’s to sell hundreds of millions of dollars of works.He’s unloaded his stake in Humvee-maker AM General, sold a flavorings company that he’d owned for decades and hired banks to find buyers for stock he holds in other companies.What in the world is going on with Ron Perelman? His exploits on and off Wall Street have been tabloid fare in New York since the go-go 1980s. But now, at an age when most fellow billionaires are kicking back, Perelman, 77, is facing a range of financial challenges, most of all at Revlon Inc., his cosmetics giant.Once touted as America’s richest man, his wealth has dropped from $19 billion to $4.2 billion in the past two years, according to the Bloomberg Billionaires Index.Bankers, socialites and art collectors have been buzzing about Perelman since his investment company, MacAndrews & Forbes, said in July it would rework its holdings in response to the coronavirus pandemic and the ravages it caused to American businesses, including his own.“We quickly took significant steps to react to the unprecedented economic environment that we were facing,” Perelman said in a statement. “I have been very public about my intention to reduce leverage, streamline operations, sell some assets and convert those assets to cash in order to seek new investment opportunities and that is exactly what we are doing.”Read Ronald O. Perelman’s full statement herePerelman also gave more prosaic reasons for the shift, including spending time with his family during lockdown and a desire for a simpler life.“I realized that for far too long, I have been holding onto too many things that I don’t use or even want,” he said. “I concluded that it’s time for me to clean house, simplify and give others the chance to enjoy some of the beautiful things that I’ve acquired just as I have for decades.”Graydon Carter, the former editor of Vanity Fair who’s known Perelman for three decades, said the shift in Perelman’s attitude is sincere.“Often when people say this sort of thing, it’s masking something else. In Ronald’s case, it’s true,” said Carter, who partnered with Perelman to reopen the Monkey Bar in Midtown Manhattan. “He has learned to love and appreciate the bourgeois comforts of family and home.”Carter described Perelman as a “charismatic swashbuckler” who once enjoyed evenings on the New York social circle a little too much. But he said Perelman is now “crazy about spending time at home” with his fifth wife Anna, a psychiatrist, and their two young sons.Richard Hack, who wrote a 1996 unauthorized biography of Perelman, is skeptical.“If you want a simpler life, you go buy a farm in Oklahoma, not sell a painting out of your townhouse in Manhattan,” Hack said. “If he’s selling his art, it’s because he needs cash.”The art includes Jasper Johns’s “0 Through 9,” priced in the $70 million-range, Gerhard Richter’s “Zwei Kerzen (Two Candles),” which went for more than $50 million and Cy Twombly’s “Leaving Paphos Ringed with Waves (I),” which found a buyer for about $20 million, according to people with knowledge of the matter, who asked not to be identified as the sales were private.“What he’s selling is as blue chip as it gets,” said Wendy Goldsmith, an art adviser in London.Some proceeds are slated to pay down loans from Citigroup Inc., according to people with knowledge of the arrangements. He also has loans from JPMorgan Chase & Co., Bank of America Corp. and UBS Group AG related to his artwork, filings show.These are not forced sales, said a spokeswoman for Perelman. She also denied a New York Post story that “The Creeks,” his 57-acre East Hampton estate, is being discretely marketed and said that he remains committed to his considerable philanthropy. Perelman is building a performing arts center in the Financial District, is vice chairman of the Apollo Theater, and sits on the boards of Columbia Business School and New York-Presbyterian Hospital.Read More: Billionaire Perelman Seeks to Reset Empire to Face New WorldIt’s a striking turn for Perelman, long celebrated and feared for engineering some of the most ambitious deals of the 1980’s and 1990’s, and for the litigation, divorces and corporate brawls he left in his wake.“He was imaginative, aggressive and innovative in ways that changed the financial landscape,” said investment banker Ken Moelis, a long-time Perelman adviser.But now, one of the original pioneers of the Michael Milken-fueled junk-bond takeover era is realizing that there’s such a thing as too much debt — especially during a pandemic.Take Revlon, which sits at the center of his empire.Its $365 million market value is a whisper of the $1.74 billion he paid for the company in 1985. He owns about 87% of Revlon and has full control over the firm, run by his daughter, Debra Perelman.For decades, it strained under a heavy debt load, forcing Perelman to provide loans or inject funds as he switched executives to pursue various turnarounds. The billionaire made clear in a Wall Street Journal interview that he “loved the business” and, for better or worse, it most defined him.Revlon, which was slow to respond to shifting trends 20 years ago, has more recently lost sales to smaller beauty companies that lured customers with social media. Now revenue is plunging further because of store closures. The company has $3 billion of debt, some of its bonds trade at 14 cents on the dollar and the company faces a cash crunch in November. A Revlon spokesperson declined to comment.His problems aren’t confined to lipstick. Perelman used his Revlon shares as collateral for MacAndrews & Forbes debt, filings show. The shares have plunged 68% this year, a decline that would typically require lenders to seek additional collateral or repayment of the loans.Shares of other companies in his portfolio, including Scientific Games Corp. and Vericast Corp., were also pledged against MacAndrews & Forbes debt. At least nine banks have claims against Perelman’s assets, including his art collection, house in the Hamptons and various aircraft. About $267 million in mortgages are linked to the firm’s Upper East Side headquarters in Manhattan and other buildings he owns.Perelman has made progress on plans to sell some of his holdings.MacAndrews & Forbes struck a deal this week to sell its 35% stake in Scientific Games to an Australian investment firm. KPS Capital Partners in July agreed to buy Perelman’s stake in AM General, the Indiana-based maker of Humvees and other vehicles, for an undisclosed amount. A $439 million deal to sell Flavors Holdings, a maker of sweeteners and food products, to Whole Earth Brands Inc. was completed in June.Further simplifying Perelman’s holdings, however, might be easier said than done.Revlon’s $3 billion of debt would be a concern for any potential buyer. And Vericast, a collection of marketing and payments businesses, has struggled to navigate industry changes while dealing with its own substantial debt burden. Two of its major revenue streams are check printing and print-based advertising, both in decline due to digital payments and online marketing. Its RXSaver and RetailMeNot units are being shopped, indicating it may be easier to sell the company in parts than as a whole.Read More: Perelman’s Coupon Company RetailMeNot Said to Weigh Sale OptionsEven art sales can be troublesome. A Francis Bacon painting belonging to Perelman, valued at about $15 million to $23 million, was pulled from auction at the last minute due to a lack of interest. The art collection — which contains some of the most valuable 20th century works, including sculptures by Alberto Giacometti and paintings by Mark Rothko and Ed Ruscha — is now responsible for more than a third of his fortune.There are signs that the turmoil is taking a toll within MacAndrews & Forbes, where several of Perelman’s most senior staff have exited in quick succession.In July general counsel Steve Cohen departed, followed by spokesman Josh Vlasto and James Chin, who headed the capital markets group. Chief Financial Officer Paul Savas resigned in June over irregularities with $5 million in insurance payments between Revlon and MacAndrews & Forbes. He was replaced by Jeffrey Brodsky, who according to his LinkedIn profile, has “an extensive background in crisis and turnaround management.”Still, those who know him well say any recent stumbles won’t define him.“Ronald has been dealmaking at the highest level for forty years,” Moelis said. “Even Michael Jordan missed a shot.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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TipRanks
3 Big Dividend Stocks Yielding Over 8%; JMP Says ‘Buy’
From the end of March through the end of August, stocks had a tremendous runup to record high levels. The gains completely wiped out the losses from the mid-winter ‘coronavirus collapse,’ and it looked like we were in for a sustained run of good days. But all of that changed as September rang in. The market hit a bump, and has been undergoing a correction. The Nasdaq is down nearly 7%, and volatility has been high so far this month.A new report from Canaccord’s Tony Dwyer puts the situation into perspective by pointing out the major source of uncertainty: “In a true statement of the obvious,” he writes, “this is the most complicated election-year setup we could possibly have.” He goes on to note the four most important ‘unknown’ factors: how the voting will actually happen this year, and avoiding vote fraud; who will win the White House; if the Democrats will sweep the Federal level elections; and, if the loser will concede the contest without a dragged-out legal battle. These are points giving investors ulcers at night.Dwyer balances all of that with the predictable factor: “Unlike the political backdrop, which is totally unpredictable, we know the Fed intends to keep rates at zero and to keep intervening when there are any signs of stress.” An active central bank will continue injecting liquidity into the system, which will be bullish for stocks. In Dwyer’s view, the only question is, what tools will the Fed use?So, in a situation that recalls Donald Rumsfeld’s ‘unknown unknowns,’ many investors are gravitating toward defensive stocks, taking steps to ensure a steady income stream. And this brings them, quite naturally, to dividend stocks. These traditional defensive plays may not offer the high share appreciation that is so attractive in normal times, but their high-yielding dividends make up for that when things turn sideways.With this in mind, analysts from JMP Securities have tapped three such defensive stocks, with dividend yields range from 8.5% to more than 12%. We’ve run the three through the TipRanks database to find out what makes them so compelling. Here are the results. BlackRock TCP Capital (TCPC)The first stock on our list is a financial company. BlackRock TCP Capital is a specialty finance company with a clear focus on mid-market lending. Since 1999, BlackRock has worked on originating and investing in debt securities, and has made a total of $20.1 billion in financing loans to more than 500 companies over the years. A plurality (over 34%) of the company’s investments are in the software and financial services fields, but BlackRock’s portfolio, current valued at $1.6 billion, spans a diverse field of targets.The company’s investments are profitable; as of the end of Q2 this year, the average annual return was 9.8%. That income provides earnings that regularly beat the forecasts. As the recessionary pressures began to ease, Q2 earnings came in at 36 cents per share, or 20% higher than expected.BlackRock uses these earnings to fund its dividend, which has been paid out regularly for more than 3 years. In a nod to the coronavirus crisis, the payment was cut from 36 cents to 30 cents – but at that level, BlackRock returns almost all of its earnings to company shareholders. The dividend yield is 12.1%, more than 6x higher than the average yield found among S&P listed companies – and more than 12x higher than the yield on US Treasury bonds in these days of near-zero interest rates. JMP analyst Christopher York is cautiously bullish on TCPC, and one of the reasons he cites is the company’s solid cash position.”The company has cash of ~$20.6mln and ~$328mln in availability on revolvers, which is more than enough to support any draw of unfunded commitments of $46.0mln. We think the liquidity at the company is very strong and think the resources at the advisor are superior to many BDCs, which we expect to lead to good longer-term restructuring and recovery outcomes,” York noted. York rates this stock an Outperform (i.e. Buy) and his $11 price target implies room for 13% share price growth in the coming year. (To watch York’s track record, click here)Overall, the analyst consensus rating here is a Moderate Buy, based on 3 Buys and 2 Holds. Shares are selling for $9.76 and the average price target matches York’s, at $11. (See BlackRock stock analysis on TipRanks)PennyMac Mortgage (PMT)Next up is another financial stock, PennyMac Mortgage. This company is a mortgage investment trust, a sub-niche of the real estate investment trust industry that provides somewhat more liquidity by investing primarily in mortgage backed securities rather than directly in real properties.During the corona crisis of 1H20, PMT saw earnings turn negative in Q1 and return to positive territory in Q2. The numbers were -$5.99 EPS in the first quarter, and $4.51 in the second. Revenues followed a similar pattern, with the Q2 top line hitting $475 million.The company adjusted its mortgage payments in the first half to account for the earnings volatility. PMT paid out 25 cents per common share in Q1, just slightly more than half of the long-held dividend of 47 cents. In Q2, management started raising the dividend, and paid out 40 cents per common share, which gives a yield 9.1%.Trevor Cranston wrote the review of this stock for JMP, and sees the company with a path forward as the pandemic effects wane. “[Our] outlook on MSRs has improved somewhat in the past few months as the expected negative COVID-19-related impact has subsided, and we continue to believe strength in the correspondent lending business is likely to more than offset any weakness in MSR results due to strong tailwinds for origination volumes, even as conventional margins have returned to more normalized levels,” Cranston opined. “As a result, believe PMT shares should trade at a premium to the hybrid REIT peer group as many peers sold significant volumes of credit assets in late 1Q and early 2Q, resulting in less book value recovery potential.”Along with these comments, he gives the stock a $19 price target, implying room for 9% upside growth. Cranston’s rating on the stock is Outperform, (i.e. Buy). (To watch Cranston’s track record, click here)Overall, PMT holds a Moderate Buy analyst consensus rating based on 5 recent Buys and 2 Holds. The stock has an average price target of $19.40, slightly higher than Cranston’s, and indicative of a 11% upside potential. (See PMT stock analysis on TipRanks)Oaktree Specialty Lending (OCSL)Last up on this list, Oaktree, is another specialty finance company. Oaktree provides loans and credit access for small- to mid-size companies that cannot gain entry to traditional sources of capital. Oaktree’s portfolio is modestly diverse, with $1.4 billion invested in 128 companies. Most of this is first lien debt, 62%, while some 20% is made up of second lien. Oaktree reported last month on its FYQ3 results, and the results were solid. EPS came in at 12 cents, against a forecast of 11 cents, for a 9% beat. Revenue for the fiscal third quarter was $34.4 million, even with forecast and down slightly yoy.The earnings results suggest that the company is emerging from the corona crises intact, a thesis supported by management’s decision to raise the quarterly dividend. They have not raised the payout since mid-2018, when it was set at 10 cents per common share. The new dividend payment is 10% higher, at 11 cents, but while the numbers seem small, the yield is an impressive 8.5%.Turning back to Christopher York, we find that the JPM analyst has set a $6 price target on OCSL, suggesting his belief in a 24% potential for the stock.Backing his stance, York writes, “We think the combination of stability in portfolio performance in 2Q20, along with growth in the investment portfolio at wider spreads gave the board the necessary boost to finally increase the dividend with improved visibility in recurring core earnings. Going forward, we believe there are a couple levers available for OCSL to expand earnings and ROE, so we think another dividend increase in F2021 is possible.”Of the three stocks on this list, Oaktree is the one with a Strong Buy analyst consensus rating – and it is unanimous. The stock has received 5 Buy reviews in recent weeks. The shares are priced at $4.83, and the $5.60 average price target implies an upside potential of 16% for the coming 12 months. (See OCSL stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched 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.
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MarketWatch
Want to retire rich? Start by unlearning some conventional wisdom
Fortunately, this “knowledge” never greatly influenced my investment strategy. Meanwhile, Wall Street wants to convince you that you know something about the future, so you actively manage your portfolio and thereby fatten the Street’s coffers. In the financial markets, action almost always triggers investment costs and perhaps big tax bills.
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TipRanks
Tesla’s Big Battery Day Event: What to Expect
Next week will be a big one for Tesla (TSLA). Alongside its annual shareholder meeting, on Tuesday (September 22) the EV maker will host its highly anticipated Battery Day. The event has been the source of much speculation as to what delights will be on offer from Musk and Co.Deutsche Bank analyst Emmanuel Rosner has an idea of what to look out for.“We believe Tesla could unveil a new insourced manufacturing system to ramp up battery capacity, improved cell chemistry with greatly-enhanced performance, and fast-declining cost curve,” the analyst said. “While media and investors’ expectations for the event are high, we believe these announcements could meet many of them, and reinforce Tesla’s position as a technology leader.”Battery capacity has already been noted as a major impediment to future growth. As such, Rosner anticipates a formal unveiling of the Roadrunner, Tesla’s battery cell manufacturing system. Expected to utilize technology obtained from Hibar and boasting the dry battery electrode (DBE) technology developed by Maxwell, the Roadrunner should “enable Tesla to scale up its battery volumes quickly while reducing cost and increasing density.”Rosner expects Tesla to “boost its battery output significantly and battery costs to trend well below $100/kWh in the next few years.”Additionally, the event could also shine a light on the development of the fabled “million mile” battery, which is expected to incorporate some advanced chemistry research work done by Jeff Dahn.So, with such a catalyst on the horizon, should investors pick up Tesla shares? Not quite. Although Rosner believes investors’ “ongoing enthusiasm for EV plays” will probably continue to prop up Tesla’s lofty valuation, the analyst counts “demand deterioration” while Tesla sets about making improvements to production as the largest investment risk. Additionally, rising competition in an increasingly crowded EV space “could eat away at Tesla’s lowest cost advantage longer term.”Therefore, Rosner rates Tesla shares a Hold, although the price target gets a meaningful boost. The figure moves from $300 to $400, yet still implies a 9.5% downside from current levels. (To watch Rosner’s track record, click here)Overall, Rosner’s colleagues are reading from the same EV manual. Tesla’s Hold consensus rating is based on 5 Buys, 15 Holds and 10 Sells. However according to the Street, there’s even more downside in the cards. Going by the $307.73 average price target, the analysts expects a 29% share price drop in the year ahead. (See Tesla stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment
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TipRanks
Wells Fargo: These 2 Stocks Could Deliver Triple-Digit Wins
Was the recent market volatility just a fake out? After notching an all-time high on September 2, fears related to overheated valuations spurred a rapid correction, marking the first material correction of the current bull market. However, this doesn’t mean the bears have been vindicated, so says Wells Fargo’s Sameer Samana.Samana highlights the fact that both the S&P 500 and the NASDAQ “were able to hold above the levels we saw in June,” arguing “from a higher highs, higher lows standpoint, the fact you were able to hold at higher levels than June or July is encouraging.” He added, “Right away, it tells a lot to investors, nothing is wrong with the trend, we just got a blowoff and kind of a pullback.”On top of this, the absorption of 10-year and 30-year Treasury issuances, recent M&A activity and easing of financial conditions like the volatility indexes and the dollar are all “helping sentiment on the day and leading to a rebound from the volatility over the past week or two,” in Samana’s opinion.With Samana’s outlook in mind, we took a closer look at two stocks Wells Fargo is backing. The firm’s analysts see over 100% upside potential in store for each. We used TipRanks’ database to find out what the rest of the Street has to say.Bellicum Pharmaceuticals (BLCM)Developing high-performance cellular immunotherapies, Bellicum Pharmaceuticals wants to unleash their power against a wide range of cancers. Given the progress of its controllable CAR-T therapeutic pipeline, Wells Fargo is pounding the table on this healthcare name.Representing Wells Fargo, 5-star analyst Jim Birchenough points out that, “With approaching data for repeat-dose rimiducid to reactivate BPX-601 PSCA-targeted GoCAR-T cells and recent IND clearance for dual-switch HER2-targeted GoCAR-T we see several opportunities for value creation over the next 6-12 months.”BPX-601 is an autologous GoCAR-T product containing BLCM’s proprietary iMC co-activation technology. It was designed to treat solid tumors expressing prostate stem cell antigen (PSCA). BLCM is hoping to amend the Phase 1 trial to increase eligibility from second line pancreatic to second and third line, increase the CAR-T dose from 5×106/Kg to 1×107/Kg and open a cohort of relapsed/refractory prostate cancer patients that have failed all approved treatments.The protocol amendment has been submitted to the FDA for Phase 1, and the company remains on track to present the first repeat BPX-601 and rimiducid data in approximately five second line pancreatic cancer patients enrolled in cohort 5B by YE20.As for BPX-603, its dual-switch GoCAR-T product designed to target solid tumors that express the human epidermal growth factor receptor 2 antigen (HER2), Birchenough has high hopes. Following the recent IND clearance, BLCM revealed the details for the planned Phase 1/2 dose escalation HER2 solid tumor basket trial. The trial will utilize a standard 3+3 design, with a starting BPX-603 dose of 100,000 Cells/kg administered after cyclophosphamide/fludarabine conditioning.Adding to the good news, Birchenough cites the publication of data showing improved proliferation, persistence and innate cell cytotoxicity with the inclusion of iMC and secreted IL-15 and augmentation of target cell killing with the addition of a CAR as a positive. He added, “BLCM expects additional preclinical data updates by late 2020, to select a final candidate over the next 12 months and file an IND 1H22.”To this end, Birchenough rates BLCM an Overweight (i.e. Buy) along with an $18 price target. This figure puts the upside potential at a whopping 158%. (To watch Birchenough’s track record, click here)Looking at the consensus breakdown, 2 Buys and no Holds or Sells have been published in the last three months. Therefore, BLCM gets a Moderate Buy consensus rating. Based on the $21.50 average price target, which is more aggressive than Birchenough’s, shares could climb 209% higher in the next year. (See BLCM stock analysis on TipRanks)Global Blood Therapeutics (GBT)With the goal of transforming the treatment of sickle cell disease (SCD) and other blood-based disorders, Global Blood Therapeutics works to bring cutting-edge solutions to market. Based on the solid performance of one of its products amid the ongoing pandemic, Wells Fargo has high hopes.Wells Fargo’s Jim Birchenough, who also covers BLCM, points to the recent launch of OXBRYTA, its drug designed to treat patients with Sickle Cell Disease (SCD) by addressing hemolytic anemia, as a key component of his bullish thesis. Along with better-than-expected sales, he cites the “clear progress towards a blockbuster opportunity beyond 2020.”During Q2 2020, U.S. sales of the therapy hit $31.5 million, surpassing the $16.1 million consensus estimate and reflecting a 123% quarter-over-quarter gain. Additionally, the COVID-19-related impact to prescriptions stabilized following the initial impact, thanks to increased use of telemedicine by HCPs and increased comfort with virtual engagements with GBT field teams. These trends are set to continue through Q3 2020 and into YE20, with the ultimate recovery surpassing pre-COVID-19 levels, so says management.“While COVID-19 headwinds have impacted exponential growth seen in Q1 2020, continued steady growth through the pandemic, with at least 1,000 new patients per quarter, puts GBT in a position to exit its first year of launch with at least 5,000 patients prescribed and representing $500 million opportunity,” Birchenough commented.On top of this, GBT is communicating with healthcare providers on a virtual basis, achieving 500-600 customer field interactions per week, with the recent launch of its branded patient ad campaign and branded healthcare professional ad campaign. According to Birchenough, aided awareness of OXBRYTA among SCD specialists is above 90%, and 60% of physicians surveyed plan to start patients on OXBRYTA within the next three months.All of this prompted Birchenough to state, “… with broadening prescriber base, higher target hemoglobins for treatment and strong progress towards full reimbursement, GBT is already establishing an opportunity well beyond the ~$2 billion represented by patients with most severe anemia.”It should come as no surprise, then, that Birchenough stayed with the bulls. To this end, he kept an Overweight rating and $133 price target on the stock, implying 140% upside potential.Are other analysts in agreement? Most are. 13 Buy ratings and 1 Hold have been issued in the last three months. So, the word on the Street is that GBT is a Strong Buy. Given the $113.08 average price target, shares could gain 104% in the next year. (See GBT stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched 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.
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TechCrunch
Amid layoffs and allegations of fraud, the FBI has arrested NS8’s CEO following its $100+ million summer financing
The tagline from today’s announcement from the United States Attorney’s office for the Southern District of New York says it all: “Adam Rogas Allegedly Raised $123 Million from Investors Using Financial Statements that Showed Tens of Millions of Dollars of Revenue and Assets that Did Not Exist.” Rogas, the co-founder and former chief executive and chief financial officer and board member of the Las Vegas-based fraud prevention company, NS8, was arrested by the Federal Bureau of Investigation and in Manhattan court earlier today charged with securities fraud, fraud in the offer of sale of securities and wire fraud. “This is a rapidly evolving situation,” Lightspeed Ventures told Forbes in a statement.
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TipRanks
Is Pfizer Stock a Buy Right Now? This Is What You Need to Know
“Big Pharma” doesn’t come much bigger than Pfizer (PFE). Although you could argue it is so big, the stock can hardly move. Shares are essentially trading for the same price as 3 years ago. Pfizer is also one of the leading names in the hunt for a COVID-19 vaccine. But unlike other names in the race to be first to market with a solution, the catalyst has had no bearing on the stock.However, after attending the company’s investor presentation, Mizuho analyst Vamil Divan believes the event “successfully illustrated how the company is evolving into a ‘New Pfizer.’”Pfizer has an extensive pipeline of vaccines and treatments that it expects will generate over $15 billion of annual sales by 2025. The “New Pfizer” is also an attempt to highlight the giant’s growth potential. The upcoming spin-off of its Upjohn portfolio should rid it of unwanted bulk and help it become an “innovation-driven biopharma company.” The company expects to grow the top-line by 6% a year, while delivering double-digit growth on the bottom line.On the rare diseases front, Pfizer anticipates six rare disease assets will be in Phase 3 trials by the end of the year, including three gene therapies.The company is also developing a wide range of immunology products, “each for a targeted number of indications where there appears the potential for a truly differentiated product.”Leading the charge form this business unit is abrocitinib, an oral JAK-inhibitor which Pfizer last month filed for the treatment of atopic dermatitis. Pfizer believes the treatment could reach annual sales above $3 billion.Pfizer is also targeting the launch of 6 new vaccines by 2025. As for the company’s collaboration with BioNTech on a COVID-19 vaccine, Divan said, “we are encouraged by the data to date and believe Pfizer remains on track to have a clear sense of the vaccine’s profile by the end of October, with potential FDA approval shortly thereafter.”The analyst believes the vaccine can generate risk-adjusted sales of roughly $1.7 billion next year and $1.2 billion in 2022.Overall, Divan rates PFE shares a Buy, along with a $43 price target. There’s room for upside of 17% from current levels should the target be achieved in the next months. (To watch Divan’s track record, click here)The rest of the Street has roughly the same average price target ($43.13), whilst the analyst consensus currently rates the stock a Moderate Buy. The rating is based on 4 Buy and 6 Holds. (See Pfizer stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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TipRanks
Analysts Say These 3 Stocks Are Their Top Picks for 2020 and Beyond
Every smart investor knows that he doesn’t know everything – and there is no shame in turning to the experts for advice. International investment firm Credit Suisse regularly publishes the information that investors need to make informed decisions. According to TipRanks, Credit Suisse ranks number 5 among the top 50 investment firms, with a sustained long-term success rate of 60% out of more than 12,000 stock recommendations made.This makes Credit Suisse a natural place to look for stock picks. With the year winding down, and the fourth quarter just around the corner, the bank is starting to publish its analysts 1 picks to round out 2020 – and to get a strong start on 2021. We’ve pulled up three of these picks; stocks that Credit Suisse analysts see gaining 20% or more in the year ahead.Using TipRanks’ Stock Comparison tool, we were able to evaluate these 3 picks alongside each other to get a sense of what the analyst community has to say.Concho Resources (CXO)First on the list, Concho Resources, is a major hydrocarbon exploration and exploitation company in the Permian Basin of West Texas. The company has exploration rights on 800,000 acres of ground in the region, and extracts both oil and natural gas. Concho is a one of the area’s largest unconventional shale producers, and has proven reserves in excess of 1 billion barrels of oil equivalent. The proven reserves are split, 2 to 1, between crude oil and natural gas.Concho has shown great resilience during the corona crisis. While earnings fell by a third in the Q1, they quickly returned to normal levels in Q2. The second quarter results, reported in July, showed a top line of $474 million in revenues, and EPS of $1.13. That EPS result was 242% above expectations. Furthermore, Concho generated $689 million in cash from operations last quarter, well above the forecast – and of that total, $238 million was considered free cash flow, giving the company sound liquidity.Credit Suisse’s Bill Janela explains why this stock is a top pick: “We believe concerns around federal acreage exposure are overblown for CXO and have been more than taken out of its stock price given recent relative underperformance. CXO’s asset quality and depth would allow it to easily reallocate activity; we estimate loss of well permits on Fed acreage would only reduce its NAV by <5%.”To this end, Janela rates this stock an Outperform (i.e. Buy), and his $48.03 price target suggests an impressive 45% upside potential for the coming year. (To watch Janela’s track record, click here)Overall, Concho gets a Strong Buy analyst consensus rating, based on 17 reviews of which 16 are Buys and only 1 is a Hold. Shares are selling for $48.18, and the $72.44 average price target implies a 50% one-year upside for the stock. (See CXO stock analysis on TipRanks)Ares Management (ARES)The second Credit Suisse pick for today is Ares Management, an alternative investment manager with global reach operations across the private equity, real estate, and credit segments. The company brought in $1.77 billion in total revenues last year, and boasts $165 billion in assets under management.Size and competence have stood Ares well during the health and economic crises of 1H20. In discussing its earnings during the period, it’s important to note that the 4Q19 EPS was unusually high – and so the earnings fall in Q1 brought the result back in-line with historical values. Q2 showed a further dip, to 39 cents per share, which was 5% above the forecast.At the top line, revenues collapsed in the first quarter of the year, but roared back in the second. Q2 total revenues hit $602 million. Solid revenues and positive earnings allowed Ares to keep up its dividend payment, which the company has been increasing for the past three years. At 40 cents per common share, this dividend annualizes to $1.20 and gives a yield of 4%, well above the average found among peer companies.Craig Seigenthaler wrote the Credit Suisse review for Ares, saying, “ARES is our Top Outperform due to the high visibility into its Stock Total Return (including Divs) strong fee-related earnings trajectory coupled with its defensive qualities (distressed investing capabilities, credit mix, long-duration AuM base, high composition of fees generated on fixed committed capital)… Over the next two to three years we expect ARES will earn ~$350M in incremental mgmt. fees without raising any additional capital…”Seigenthaler supports his Outperform (i.e. Buy) rating with a $49 price target, suggesting a 23% upside potential going forward. (To watch Seigenthaler’s track record, click here)Overall, shares in ARES are trading for $39.47, and the $44 average price target implies they have room for 11% upside growth this year. The stock's Strong Buy analyst consensus rating is based on 6 Buys and 2 Holds set in recent weeks. (See ARES stock analysis on TipRanks)Carlisle Companies (CSL)Last on our list of Credit Suisse picks is Carlisle Companies, a highly diversified global manufacturer. Carlisle has its hands in many pots, with four major divisions: construction materials, interconnections technologies, industrial fluids, and brake and friction technology. The company is best known, however for its roofing materials, in the construction segment. This is another company weathered the corona crisis and remained in good shape. Earnings per share had been declining through the latter half of 2019, and so the dip in Q1 of this year only continued that trend. EPS turned back upwards for Q2, and at $1.61 it beat the forecast by a wide margin. The outlook for Q3 is even higher, at $1.73. Revenues in 1Q20 were stable, at just over $1 billion in each quarter.Fiscal health has not translated into share appreciation, however, as CSL shares are still down 21% from February’s pre-market collapse peak. The stock has underperformed in recent months, but Credit Suisse’s Adam Baumgarten sees it with an ace in the hole for future growth."~75% of Carlisle’s profits come from commercial roofing, and ~75% of that is for roof replacements. Given the non-discretionary nature of roofs (if your roof leaks, you fix it), roofing is one of the most downturn resistant product categories in our coverage universe… Given that roof replacements are never lost, just delayed, we expect the stock to outperform when the backlog of roof replacements is cleared,” In other words, Baumgarten believes that the economic downturn simply pushed some of Carlisle’s base business into next year at the latest. Based on this belief, the analyst rates the stock an Outperform (i.e. Buy), and his $150 price target implies an upside of 22% in the next year. (To watch Baumgarten’s track record, click here)Carlisle has earned a unanimous Strong Buy consensus rating, with 5 Buy reviews in the past two months. Shares are priced at $122.42 and the $150 average price target matches Baumgarten’s. (See CSL stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched 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.
