Given the current financial landscape, one way to find compelling investment opportunities is to take a cue from legendary stock pickers.
One such Wall Street guru is Steven Cohen. As Chairman and CEO of Stamford, Connecticut-based Point72 Asset Management, Cohen leads a 1,650-person registered investment advisory firm. Cohen and his firm are well renowned in the financial community. In 2020, Point72 posted a 16% gain. Additionally, according to Forbes, as of May 2021, Cohen’s net worth is around $16 billion.
Cohen has been in the investing business since the 1970s. He founded S.A.C. Capital Advisors in 1992, and in 2014, converted his investment operations to the Point72 Asset Management family office. Sports fans might also recognize him as the owner of the New York Mets major league baseball team.
Recently, Point72 upped its stake in Uber Technologies, Inc. (UBER). The stock, with its considerable upside potential, could really thrive in the economic recovery. (See Uber stock analysis on TipRanks)
Firing on All Cylinders
Point72 is evidently leaning bullish on the ride-sharing space, particularly with industry leader Uber.
A recent 13F filing reveals that Point72 added a whopping 4,639,708 shares of UBER in the first quarter of 2021, increasing its position by 117%. Following the purchase, UBER stock comprises 2.18% of Point72’s portfolio. Clearly, Point72 sees something special about Uber.
Judging from Uber’s blockbuster first quarter 2021 results, it certainly looks like Point72 made the right move.
Impressively, during Q1 2021, Uber collected $19.5 billion in gross bookings, representing a 24% year-over-year increase. Moreover, Uber’s first quarter 2021 delivery revenue totaled $1.7 billion, signifying quarter-over-quarter growth of 28% and an astounding 230% year-over-year increase.
In addition, Uber remained flush with cash at the end of the quarter. The company’s unrestricted cash, cash equivalents, and short-term investments totaled $5.7 billion at the end of Q1 2021.
Uber CEO Dara Khosrowshahi took the opportunity to tout the company’s momentum as its ride-sharing business model expands into the delivery niche.
“Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings,” Khosrowshahi said.
Uber is the Clear Market Leader
There really is no one in the ride-share market that beats Uber, or even comes close to Uber in size and profit.
Uber’s market capitalization is over $92 billion, and the company has 22,000 full-time employees. In terms of geographical spread, the company operates in the U.S., Canada, Europe, Latin America, the Middle East, the Asia Pacific region, and Africa.
For the sake of comparison, let’s look at ride-sharing competitor, Lyft (LYFT). This company doesn’t have the market footprint or the brand-name recognition that Uber does.
Lyft’s market capitalization is slightly above $17 billion – less than one-fourth of Uber’s market cap. Furthermore, Lyft has around 4,600 full-time employees.
Wall Street Weighs In
According to TipRanks’ analyst rating consensus, UBER is a Strong Buy, with 25 Buy and 3 Hold ratings. The average analyst price target is $72.50, implying 46.6% upside potential.
The Takeaway
If Cohen’s track record offers any indication, investors might be well advised to take note of Point72’s sizable allocation in Uber.
Disclosure: David Moadel held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
