For anyone looking to get ahead in the investing game, following in the footsteps of stock picking legends is an obvious path to follow.
Hardly any are more legendary than George Soros, forever known as the ‘man who broke the Bank of England,’ after pocketing a cool billion dollars in one day when betting against the Pound back in 1992.
That single act, however, does not define Soros, who has made sound investment decisions throughout his career which bought decades-long returns of 30% to his Quantum Fund. And while Soros has given away much of his fortune to philanthropic causes (some $30 billion+), his net worth today is a not-too-shabby ~$8.50 billon.
So, when Soros goes stock shopping, investors are obviously keen to see what’s in his bag. The billionaire recently loaded up on two stocks, and we used TipRanks’ database to find out what the analyst community has to say about them. As it turns out, Soros is not the only one taking the bullish view here; both get the thumbs from the analysts and boast Strong Buy consensus ratings.
Biohaven Ltd. (BHVN)
Merger and acquisition activity can shake up the markets, and the first Soros pick has recently been involved in such action. Biohaven, Ltd. is a spin-off of the parent company Biohaven, a clinical-stage biopharmaceutical research company that was bought out by Pfizer earlier this year. Pfizer took control of the parent firm’s full portfolio of anti-CGRP assets, while allowing the remainder to spin off as Biohaven Ltd., trading under the BHVN ticker, with Pfizer holding a 3% share of the spun-off stock.
On its own hook, Biohaven Ltd. retains a solid portfolio of drug candidate assets. These include potential treatments for a variety of neurological and psychological conditions, including epilepsy, mood disorders, and obsessive-compulsive disorder, and a late-stage program in the treatment of spinal muscular atrophy (SMA). In addition, the company has developmental programs in the pre-clinical stages.
The company expects to complete enrollment of two Phase 3 studies next year, both in the use of drug candidate troriluzole in the treatment of obsessive-compulsive disorder. The trials are expected to enroll a total of 1,300 patients across 200 global study sites. The company also has a Phase 3 study of taldefgrobep alfa ongoing, in the treatment of SMA. This study has a target enrollment of 180 patients.
Additionally, Biohaven Ltd. is looking to complete the Phase 1 trials of BVH-7000 in the first half of 2023. On successful completion of these trials, in the treatment of epilepsy, the company aims to initiate at least one pivotal trial, also in 2023.
To fund these programs, and to launch the new ticker, Biohaven Ltd. held a public offering of stock last month, putting 28.75 million shares of BHVN on the market at $10.50 per share. Gross proceeds from the sale, before deductions, came to $301.9 million.
All of this caught the eye of George Soros. His firm bought 1,017,534 shares of the company in Q3. This is not a new position for the legendary investor; Soros first got into this ticker in Q2 of this year; clearly, he sees the Pfizer transaction and Biohaven spin-off as an opportunity. His recent buy represents an 81% increase in his total holding of the stock, which is now worth over $32 million.
Soros is not the only bull on this stock. The merger and spinoff have also caught the attention of Cantor’s Charles Duncan. While the 5-star analyst believes the rest of the pipeline is in the “show me” category, BHV-7000 is the “most-valuable pipeline asset.”
“Looking ahead,” said Duncan, “the key potential value creating milestone for us will be the P1 data for BHV-7000. Based on our conversations with the company, the observations of note will relate to safety/tolerability as well as phamacokinetic/pharmacodynamic (PK/PD), which should generate enough information to select doses and titration schedules for the eventual P3 studies. We expect to see these data in 1H23 and for Biohaven to initiate its P3 trials in 2H23. In addition, we expect to see P3 data from troriluzole for OCD in 2023 and taldefgropeb alfa for spinal muscular atrophy (SMA) in 2024, which could provide upside to our current thesis.”
A valuable asset and plenty of near- to mid-term catalysts are positives for this company, and Duncan rates the shares as Overweight (i.e. Buy). His price target, of $27, implies a robust upside of 91% in the next 12 months. (To watch Duncan’s track record, click here)
Overall, BHVN has picked up 3 analyst reviews – and they are unanimous that this is a stock to Buy, for a Strong Buy consensus rating. The shares are trading for $14.10 and their average target of $24.33 suggests that a one-year gain of ~73% lies ahead. (See BHVN stock forecast on TipRanks)
Booking Holdings (BKNG)
The next Soros pick we’ll look at is Booking Holdings, a leading online travel company. Booking is a holding company, and its subsidiary brands include Booking.com, Priceline, Agoda, Rentalcars.com, Kayak, and OpenTable. Customers can use these sites to access rooms, flights, meals, and other services world-wide, and the brands can connect with customers everywhere. Services are offered in more than 40 languages and include over 6.6 millions listings of homes, apartments, and other accommodations.
In recent quarters, Booking Holdings has consistently reported year-over-year quarterly revenue increases, reflecting the lifting of COVID lockdowns and the related surge in business and leisure travel. In the most recent reported quarter, 3Q22, the company had a top line of $6.05 billion, up 29% from 3Q21. For the first nine months of this year, the 3-quarter revenue total of $13.04 billion marked a 63% increase from the same period last year.
In addition to revenues, the company reported strong earnings. Net income, at $1.67 billion, was more than double the year-ago value of $769 million, while the non-GAAP EPS, at $53.03, was up 41%. While liquid assets were down from the $11.1 billion reported at the end of last year, the company still has over $9.02 billion in cash and cash equivalents as of September 30 this year.
Standing squarely in the bull camp, Soros’ fund pulled the trigger on the stock for the first time, buying up 10,800 shares. As for the value of this new position, it comes in at $20.95 million.
Looking at this stock for Evercore ISI, 5-star analyst Mark Mahaney has taken note of the company’s strengths – especially its potential to ‘steer through stormy weather.’
“We continue to like BKNG given its newer investments (merchandising, flights, cross-selling) that should support above pre-COVID growth in terms of Room Nights, Bookings, Revenue and EPS as conditions normalize. We also believe the material progress BKNG has made in driving more traffic directly to its site – e.g. 45% of Bookings are now via its Mobile app, up from 35% back in ’19 – carries very significant EBITDA Margin expansion implications,” Mahaney noted.
“There is clear discretionary consumer spend risk here, but strong valuation support should help, along with a management team and a business model that have been fully tested over the last 20+ years,” the analyst added.
These comments back up Mahaney’s Outperform (i.e. Buy) rating on the shares, and his price target, now set at $2,600, implies an upside potential of 34% on the one-year time horizon. (To watch Mahaney’s track record, click here)
Overall, BKNG gets a Strong Buy consensus rating based on 17 recent analyst reviews from the Street. These reviews include 13 Buys over just 4 Holds. The shares are trading at $1,940 and change and the average price target of $2,650, slightly more bullish than Mahaney’s, indicates potential for ~19% upside by the end of next year. (See BKNG stock forecast on TipRanks)
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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.