Billionaire Israel Englander is making big bets on these 2 strong buy stocks
After what appeared to be a brick wall of late for the opening rally of the year, markets appear unsure of which direction to take next, making it difficult for investors to navigate the choppy conditions.
With that in mind, perhaps the best solution for investors is to follow in the footsteps of legendary Wall Street names — such as Israel Englander.
Millennium Management’s chairman and CEO started the hedge fund in 1989 with $35 million, and now the company is a nearly $53 billion company, so he knows a thing or two about investing. Of late, Englander has been busy replenishing the portfolio with some large purchases and we have tracked two of his recent purchases.
Do these decisions sit well with The Street’s equity experts? It turns out they certainly do. According to the TipRanks database, both are rated as Strong Buys by the analyst consensus. Let’s see why these names are getting a lot of praise right now.
Dexcom Inc (DXCM)
The first UK-backed stock we’ll look at is medical device maker Dexcom. Based in San Diego, California, the company manufactures continuous glucose monitoring (CGM) systems for diabetics. The company’s solutions include the Dexcom G6 wearables and the newer Dexcom G7, a small wearable sensor that sends real-time glucose readings to a user’s smartphone every 5 minutes and that the FDA recently approved for use by people with all types of diabetes Age two years and older has released. The company advertises the product as the most accurate CGM offering on the market.
Diabetes is not only a chronic disease, but also an increasingly common one. Dexcom’s products are growing in popularity, as evidenced by the company’s steady sales growth.
This was shown again in the most recent quarterly statement – for 4Q22. Dexcom posted revenue of $815.2 million, up 16.8% year over year and in line with Street’s expectations. There was a cohesive beat in the end line as an adj. Earnings per share came in at $0.34, ahead of guidance of $0.28. The company also stuck to its earlier guidance for 2023, which calls for revenue growth of 15% to 20% and gross margins of 62% to 63%.
The Englishman obviously looks a lot to like here. During the fourth quarter, he increased his stake in the company by more than 200% by purchasing 2,658,077 shares. He now holds a total of 3,890,649 shares, which are worth $431.9 million at the current share price.
Mirroring Englander’s confidence, Matt O’Brien, an analyst at Piper Sandler, says Dexcom is a “favorite name for 2023” and cites several reasons to get on board.
“While DXCM has continued to trade sideways since November following its strong third quarter gains, we believe there is room for significant value appreciation from the launch of the domestic G7, continued OUS expansion and the underlying opportunity (Basal-IQ Tech uses a Dexcom G6 sensor) groundbreaking. Better-than-expected volumes and strong GM leverage give DXCM an opportunity to become a hit-and-buyer story moving through 2023, in our view,” said O’Brien.
Not surprisingly, O’Brien has an Overweight (ie, Buy) rating on DXCM stocks, supported by a $150 price target. This target increases the upside potential to 35%. (To see O’Brien’s track record, Click here)
Most agree with O’Brien’s thesis. The stock claims a Strong Buy consensus rating based on 10 Buy versus 3 Hold. Based on the average target of $129.92, shares are poised to climb 17% over the coming year. (See DXCM stock forecast)
SBA communication (SBAC)
Moving on to our next English-backed name is SBA Communications (SBAC), a real estate investment trust (REIT), but a unique one at that. Based in Boca Raton, Florida, the company owns and operates wireless communications infrastructure and is in fact one of the largest cell tower providers in the United States with offices in Central America, Brazil, Africa and the Philippines. Its primary focus is leasing antenna space at its communications sites to a variety of wireless carriers, including Verizon, AT&T and T-Mobile.
SBAC’s solid position is reflected in the company’s steadily increasing sales and earnings over the last few quarters. For the most recently reported quarter for Q4’22, revenue increased 15.3% from the same period last year to $686.1 million, beating Street’s call by $4.81 million. Although net income rose sharply to $102.6 million from $48.9 million in 4Q21 and accounted for $0.94 per share, the figure fell short of the $1.11 that analysts had been expecting .
The Englishman comes into play here with a big increase in holdings in Q4. He bought 594,994 shares during the quarter, increasing his stake by nearly 300% and now holding a total of 797,089 shares, currently worth over $206 million.
Englander appears optimistic about the future of SBAC, as does Ric Prentiss, analyst at Raymond James, who writes, “SBAC is our current favorite tower stock because of its: 1) larger exposure to US Towers; 2) higher quality AFFO; 3) longer runway for strong dividend growth (the company currently pays a quarterly cash dividend of $0.85 per share); and 4) demonstrated ability to allocate capital opportunistically, including share repurchases.”
Based on this view, Prentiss rates SBAC as a Strong Buy and has set a price target of $334. Should that figure be reached, investors will be sitting on returns of ~29% a year from now. (To see Prentiss track record, Click here)
Now let’s turn to the rest of the road where SBAC is getting a lot of support. Barring two skeptics, all 10 other recent analyst ratings are positive, making the consensus view here a strong Buy. Shares are expected to rise ~27% in the coming year considering the average target is $328.82. (See SBAC Stock Forecast)
To find great stock trading ideas at attractive valuations visit TipRanks’ The best stocks to buya newly launched tool that brings together all of TipRanks’ stock insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is for informational purposes only. It is very important that you do your own analysis before making any investment.
https://finance.yahoo.com/news/2-strong-buy-stocks-billionaire-215620587.html Billionaire Israel Englander is making big bets on these 2 strong buy stocks