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Billionaire George Soros is taking on these 3 “Strong Buy” shares
Some investors achieve legendary status and rise well above their competitors through a combination of luck and success. Perhaps no one exemplifies this more than George Soros, the Holocaust survivor who graduated from the London School of Economics after the war and went into banking to make a name for himself. He was incredibly successful. The hedge fund he founded, Soros Fund Management, achieved an average annual return of 33% from 1970 to 2020, making it the most successful hedge fund in history. Soros’ greatest single hit was on September 16, 1992 when he “broke the Bank of England”. He had taken a short position in sterling that was raised to $ 10 billion, and when the pound fell in response to political change, he personally made $ 1 billion in a single day. Soros wasn’t always right about his financial calls, but he’s more right than wrong. He is also known for his bon mots when it comes to talking about trading. “It is not about whether you are right or wrong,” Soros was quoted as saying, “it is about how much money you make when you are right and how much you lose when you are wrong.” With this in mind, we decided to look at the recent activities of Soros Fund Management as inspiration. With three stocks that the fund added to TipRanks’ database in the first quarter, we noticed that the analyst community was also on board, as each stock had a consensus rating of “strong buy”. Farfetch, Ltd. (FTCH) We’re starting out with an online retail inventory, Farfetch, a company that specializes in selling luxury goods and brands. Farfetch is a truly international company with headquarters in Portugal, headquarters in London and offices in New York and LA, Tokyo and Shanghai, and Brazil. Like many tech-centric companies, Farfetch has faced a loss – but in the first quarter of this year the company made an abrupt turnaround toward profitability. The earnings report for the first quarter of 21 showed after-tax income of $ 516.7 million compared to a quarterly loss of $ 79.2 million a year earlier. The company announced that these gross earnings included a one-time non-cash benefit of $ 660 million “resulting from the lower impact of share price on fair value items and revaluations.” Total revenue from operating activities was $ 485 million, up 46% year-on-year and higher than analysts’ forecast of $ 457 million. A key metric, the gross value of orders processed through the company’s platform, increased 49% year over year to $ 915.6 million. Farfetch’s success relies on a strong user base. The company has more than 3 million active customers and operates in 190 countries. Sellers on the platform have made available over 1,300 luxury brands. Even after falling in value in the first half of 2021, the stock is still up an impressive 234% over the past 12 months. One of the fans of FTCH is Soros. In its most recent release, Soros announced that its fund had purchased 125,000 shares of FTCH, a stake that is now valued at more than $ 5.5 million. Stephen Ju, 5-star analyst at Credit Suisse, rates FTCH with outperformance (ie buy) and a price target of USD 78. Investors can pocket a profit of ~ 88% if the analyst’s thesis prevails. (To see Ju’s track record, click here.) “We see the company positively if it maintains Adjusted EBITDA guidance as Farfetch will reinvest the higher revenue contributions to customer acquisition – which supports long-term adoption rates. We are modeling ~ 700,000 new customers for 2021, ~ 600,000 for 2022 and from 2023 our expectations are also unchanged at ~ 1.2 to 1.5 million, ”said Ju. The analyst summarized: “Our investment theses remain: 1) the large addressable market of $ 300 billion remains fragmented and penetrated, 2) the relative protection from competition from online, larger-cap competitors, 3) the risk increasing adoption of luxury goods in APAC and emerging markets. ” Most analysts support Ju’s confident stance on the online fashion company as TipRanks Analytics presents FTCH as a strong buy. Based on 8 analysts who were surveyed in the last 3 months, 6 rated the share as a buy and 2 as a hold. The 12-month average price target is $ 60.63, an increase of ~ 37% from current levels. (See FTCH stock analysis on TipRanks) Coursera (COUR) The next stock we’ll look at, Coursera, is a MOOC company – a massive online open quote provider. This niche takes advantage of the size and reach of the internet to bring a wide range of top quality university courses to the masses. Coursera is a leader in this field and since its inception in 2012 has offered more than 4,000 courses from over 200 universities in more than 30 degrees and at a lower cost than individual tuition. Through Coursera, students can take courses at world-class schools such as Imperial College London, the University of Illinois Urbana-Champaign, the University of Michigan and Johns Hopkins. The company is proud to have over 77 million students using its services. While the company is 9 years old, it is new to the public markets; Coursera held its IPO at the end of March this year. 15.73 million shares were made available on the NYSE at an opening price of $ 33. This was the high end of the initial price range, which was set between $ 30 and $ 33. In total, the initial public offering raised $ 519 million before expenses. At the beginning of May, Coursera published its first quarterly report since going public. The report showed total revenue of $ 88.4 million, up 64% over the previous year. The company’s gross income was $ 49.5 million, 71% higher than the prior-year quarter. George Soros saw an opportunity in that IPO and his fund added 105,000 shares in the company. This new position is valued at ~ $ 4 million at current stock prices. Among the cops is 5-star analyst Ryan MacDonald of Needham, who makes a clear, bullish case for Coursera stock. “With the growing role of automation, the growing skill gap and the shift to online learning, we believe Coursera’s comprehensive platform will help us share a large TAM that ranges in size from $ 47 billion to $ 50.6 billion. Dollar lies. While the COVID-driven tailwind to registered student growth in FY 20 leads to a difficult consumer segment in FY 21, we believe Coursera’s efficient GTM movement and shift to higher-end corporate and degree offerings will result in sustained growth of over 25%. and a gross margin, ”MacDonald noted. To that end, MacDonald rates COUR stock for a buy and its target price of $ 56 shows confidence in an uptrend of 47% over the next 12 months. (To see MacDonald’s track record, click here.) In his short time on the stock exchange, COUR has received 14 analyst ratings with a breakdown of 12 buys into 2 holds to aid the consensus rating for strong buys. The shares trade for $ 38 and their average target price of $ 54.67 implies an uptrend of 44% for a year. (See COUR stock analysis on TipRanks.) Sotera Health (SHC) Last on our list of new George Soros positions is Sotera Health, a holding company whose subsidiaries provide a range of healthcare consulting, laboratory testing and sterilization services. Sotera’s businesses are aimed at more than 5,800 healthcare customers in over 50 countries. The company has 13 laboratories that can perform more than 800 tests and 50 sterilization facilities. Sotera customers include 75 of the 100 largest medical device manufacturers and 8 of the 10 largest pharmaceutical companies. SHC shares went public on November 24th last year, in an IPO that sold 53.6 million shares and raised $ 1.2 billion. The capital raised was used to repay existing debts. The company has been working diligently to reduce debt, and in its first quarter 21 report stated that it had total debt of $ 1.87 billion and available cash of $ 108 million. Net sales for the first quarter were $ 212 million, up 13% year over year. Net income saw a strong profit that went from a loss of 1 cent per share a year ago to earnings per share of 4 cents. In the first quarter, Soros took a new position in Sotera and bought 179,274 shares of the stock. At current share prices, this stake is valued at over USD 4.3 million. Tycho Peterson, 5-star analyst at JPMorgan, likes SHC and rates the stock as overweight (i.e. buy). Its price target of USD 35 indicates an upward movement of 45% from the current trading level. (To see Peterson’s track record, click here.) Peterson confirms his stance: “First quarter results were generally strong and while forecasts remain unchanged, this should provide a way up for the 2021 balance as we continue to be fans of the company’s diversified operating platform, sticky multi-year contracts, efficient pricing strategy, and high level of oversight over regulators, all of which support the broad competitive gap, and FCF to aid in de-leveraging… “Overall, the road was up on Sotera -Shares agree; The stock recently made 8 positive ratings, which support the consensus rating of Strong Buy analysts. The shares are trading for $ 24.06 and their average price target of $ 31.75 implies a year-long upward movement of ~ 32%. (See SHC stock analysis on TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, ‘a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.