Last week, the NASDAQ fell below 13,200, reaching the net loss of its everyday high earlier this month, 6.4%. If this trend continues, the index will slide in the correction’s area, a loss of 10% from its peak. So what exactly is going on?
At the bottom, these are mixed signals. The COVID-19 pandemic is starting to fade and the economy is starting to open up again – strong positive results that should strengthen markets. But an economic resumption brings inflationary pressures: more people working means more consumers with money in their pockets, and the massive stimulus bills passed in recent months – and the bill now being worked on by Congress, totaling $ 1, 9 billion – has invested extra funds. people’s wallets and liquidity in the economy. There is a pent-up demand, and people with money to spend, and both factors will increase the price.
We see one effect of all this in the bond market, where the ten-year treasury effect yields 1.4%, almost an annual high, and has been rising upwards over the past few weeks. This could be a case of the leap, 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 all the stocks of the stock market, investment gurus can offer a sense of clarity. No one more than billionaire Steven Cohen.
Cohen’s investment firm, Point72 Asset Management, relies on a strategy that involves investing in the stock market, as well as a more macro approach. This strategy captured Cohen’s status as a highly respected power station, with the guru earning $ 1.4 billion by 2020, thanks to a 16% gain in Point72’s main hedge fund.
Keeping that in mind, we have shifted our focus to the latest 13F submission from Point72, which reveals the stocks that the fund picked up in the fourth quarter. Typically in the TipRanks database, which stuck to three ticks in particular, showed that each deserves a consensus from a Strong Buy analyst and has significant upside potential.
Array Technologies (ARRY)
The first new position is in Array Technologies, a ‘green tech’ company that provides detection technology for large-scale solar energy projects. It is not enough to use just enough photovoltaic solar panels to power an energy sector; the panels must detect the sun through the sky, and take into account the seasonal differences in its path. Array provides solutions to these issues with its DuraTrack and SmarTrack products.
Array boasts that its tracking systems will improve the lifelong efficiency of solar projects, and that its SmarTrack system can increase energy production by 5% overall. The company has clearly impressed its customers, as it is in more than 900 installations in more than 900 utility projects.
President Biden is expected to take executive steps to advance green economic policies at the expense of the fossil fuel industry, and Array could potentially benefit from this political environment.
The company’s share is new to the markets, after having its stock market in October last year. The event is described as the ‘first major sunrise’ in the US for 2020, and it was successful. 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 put on the market by Oaktree Capital. Oaktree is the investment manager who has owned a majority stake in the company since 2016.
Among Array’s fans is Steven Cohen. Point72’s new ARRY position is 531,589 shares in the fourth quarter, and is valued at more than $ 19.7 million at current valuations.
Guggenheim analyst Shahriar Pourreza also appears to be confident about the company’s growth prospects, noting that the stock appears to be undervalued.
“Renewable energy companies have seen a huge inflow of capital as a result of the ‘blue wave’ and the Democrats’ control over the White House and both chambers of Congress; However, ARRY is still trading a significant discount to peers, “the 5-star analyst noted.
Pourreza added: “We remain positive about ARRY’s growth prospects, driven by 1) market share profit on the track of fixed tilt systems, 2) ARRY market share within the tracker industry, 3) ARRY’s major opportunity in the less pervasive international market, 4) the opportunity to earn their existing customer base in the long run through extensive warranties, software upgrades, etc., which is very enticing. ”
Consistent with these positive comments, Pourreza ARRY shares are considering a buy, and its $ 59 price target implies a upward push of 59% from current levels. (To see the record of Pourreza, click here)
New stocks in growth industries usually draw attention from Wall Street’s benefits, and Array has had 8 reviews on record since it became known. Of these, 6 are Buys and 2 Holds, which are buying the consensus rating on the stock strongly. The average price target, at $ 53.75, indicates room for ~ 45% upside in the next 12 months. (See ARRY stock analysis on TipRanks)
Paya Holdings (PAYA)
The second Cohen 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 education, government, healthcare, non-profit and utility industries. Paya boasts more than $ 30 billion in payments that are processed annually for 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 stands square with the bulls on this one. During the fourth quarter, Point72 snatched 3,288,843 shares, bringing the size of the stake to 4,489,443 shares. After this 365% boost, the value of the position is now ~ $ 54 million.
Mark Palmer, a 5-star analyst at BTIG, was impressed with Paya’s medium-term outlook and wrote: ‘We expect PAYA to generate revenue growth in its teens over the next few years, with Integrated Solutions leading the way in the middle 20 and payment services will grow in the middle of single digits. At the same time, our company’s operating expenses should grow in the 5% context. As such, we believe that PAYA’s adjusted EBITDA growth will be north of 20% over the next few years, and that its adjusted EBITDA margins will expand from 25% in 2019 to 28% with YE21. ”
Palmer sets a $ 18 price target on PAYA shares, indicating its confidence in 49% growth for the coming year, and considers the shares a buy. (To see Palmer’s record, click here)
The consensus rating of PAYA’s Strong Buy analyst is unanimous, based on 4 reviews purchased over the past few weeks. The stock has an average price target of $ 16, indicating an upward potential of ~ 33% of the current share price of $ 12.06. (See PAYA stock analysis on TipRanks)
Dicerna Pharma (DRNA)
Last but not least is Dicerna Pharma, a clinical stage of biotechnology venture focusing on the discovery, research and development of treatments based on its RNA Interference (RNAi) technology platform. The company has 4 drug candidates in different stages of clinical trials and another 6 in preclinical studies.
The company’s pipeline has clearly caught Steven Cohen’s attention – tailored to a new stake of 2,366 million shares. This stake is worth $ 63.8 million at current value.
The drug candidate furthest along Dicerna’s pipeline 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 in a phase 3 trial. The best results are expected in mid-’21, and if all goes according to plan, an NDA filing for nedosiran is expected by the end of 3Q21.
Analyst Mani Foroohar, who covers the share for Leerink, considers nedosiran to be the key to the company’s future future.
‘We expect Nedosiran to see approval by mid-2022 and place the drug behind competitor Oxlumo (ALNY, LP) in PH1 for about a year and a half … A successful outcome will turn DRNA into a commercial company for rare diseases in a attractive duopoly. market with the best label width, ”notes Foroohar.
For this purpose, Foroohar rated DRNA a better performance (ie buy), and its price target of $ 45 indicates an upward potential of one year of 66%. (To see Foroohar’s record, click here)
All in all, Dicerna Pharma has 4 Buy reviews on record, which makes the Strong Buy unanimous. DRNA shares are trading at $ 26.98, and their average price target of $ 38 puts the increase at ~ 41% over the next 12 months. (See DRNA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.