If you’re looking for effective strategies for making sound stock selection decisions, you could do a lot worse than peep into the current portfolios of Wall Street’s investing titans. By discovering which equites they are leaning into at any given time, investors can piggyback on the decades-long success attained by the stock picking giants.
Few are more successful at this game than Ken Griffin, the founder and CEO of hedge fund Citadel and a man with a net worth of ~$34 billion. Last year, against a backdrop of a merciless bear market, Citadel raked in record profits of $16 billion, a testament to Griffin’s and the firm’s market skills.
With this in mind, we used TipRanks’ database to find out what the analyst community has to say about two stocks that Griffin’s fund snapped up recently. It turns out that the analyst consensus has rated each a “Strong Buy.” Not to mention solid upside potential is also on the table. Let’s take a closer look.
Mobileye Global (MBLY)
Griffin has evidently been eying the shift taking place in the auto industry. Mobileye Global is a prominent leader in the realm of advanced driver assistance systems (ADAS) and autonomous driving technology. The firm was founded in 1999, and has since evolved into a globally recognized force, revolutionizing the automotive industry with its cutting-edge innovations. Specializing in the development of vision-based solutions, the company focuses on equipping vehicles with state-of-the-art cameras and sensors that enable a higher level of safety, efficiency, and automation on the roads.
Mobileye was snapped up by Intel in 2017 but was spun off last October in a blockbuster IPO. Since then, the company has made a habit of beating bottom-line expectations in its quarterly readouts, a trend that continued in July’s Q2 report.
The company delivered adj. EPS of $0.17, beating the Street’s forecast by $0.05. Although revenue experienced a 1.3% year-over-year decline to $454 million, this figure still exceeded the consensus estimate by $3.14 million. Wall Street, however, was not all that impressed, as the company maintained its full-year revenue outlook, anticipating sales to fall within the range of $2.07 to $2.11 billion. The mid-point of this range falls just short of the $2.1 billion expectation set by analysts.
Griffin, though, must see plenty of value here. His fund opened a new position during the quarter, acquiring 2,415,297 shares. These are currently worth $92 million.
Looking at the company’s prospects, it’s the opportunity afforded by Mobileye’s most advanced driver-assist system SuperVision, that informs Canaccord analyst George Gianarikas’ bullish take.
“The all-important SuperVision product rollout remains on track, with the company reaffirming its 2023 and 2024 unit estimates and expected inflection point in 2026. While our assumption of 220k SuperVision unit shipments in 2024 remains intact, we suspect some models may have had a higher estimate and not adjusted for the recalibration from 1Q23. The company continues to see strong OEM interest in SuperVision and expects ‘serious engagements’ with many OEMs to mature into additional design win announcements by the end of the year,” Gianarikas noted.
“We see Mobileye’s full integrated, system level approach, including REM mapping and RSS, combined with billions of miles of mapping data and close to two decades of R&D, as difficult to surmount long term,” Gianarikas went on to add.
Accordingly, Gianarikas rates MBLY stock a Buy while his $55 price target implies one-year share appreciation of 44%. (To watch Gianarikas’ track record, click here)
Most analysts agree with that stance. Based on 12 Buys vs. 2 Holds, the stock claims a Strong Buy consensus rating. At $48.85, the average target makes room for 12-month returns of ~28%. (See MBLY stock forecast)
Acelyrin, Inc. (SLRN)
For our next Griffin-backed selection, we’ll switch lanes and pivot to the biotech space. Acelyrin is a late-stage biopharma focused on developing transformative therapies for patients.
The company is a relative newcomer to the stock market, having held its IPO in May of this year. The public listing was an outright success, with the upsized IPO raising $621 million for the company, making it the largest biotech IPO in the US since early 2021.
Evidently, the company’s pipeline is turning heads. ACELYRIN is currently working on three drugs, all in various stages of development.
Its lead candidate is izokibep, an IL-17A inhibitor being put through late-stage testing as a treatment for hidradenitis suppurativa, uveitis and psoriatic arthritis.
Top-line data from the placebo-controlled Part B of the Phase 2b/3 trial of izokibep in hidradenitis suppurativa is anticipated to see the light of day sometime in the third quarter. Additionally, a top-line data readout from the phase 2b/3 randomized controlled trial of izokibep in psoriatic arthritis recently got pushed forward to 1Q24 from mid-2024.
Elsewhere in the pipeline, lonigutamab is being developed as a treatment for thyroid eye disease (TED) with top-line results from the ongoing Phase 1/2 Proof-of-Concept (PoC) trial anticipated in late 2023/early 2024.
Lastly, the Phase 1/2 PoC trial of SLRN-517 in chronic urticaria (CU) is also taking place right now. Top-line results from this study are expected in the second half of 2024.
Griffin has been quick in identifying the potential here, and during Q2, his fund snapped up 6,039,657 shares, which presently command a market value of almost $163 million.
With several readouts planned for the pipeline, Piper Sandler analyst Yasmeen Rahimi also has high expectations.
“We foresee the company becoming a pioneer in the inflammatory disease space,” Rahimi said. “Beyond an exceptional management team, SLRN is currently developing 3 drugs, which all have validated MoAs: 1) izokibep (IL-17A inhibitor); 2) lonigutamab (anti-IGF-1R); and 3) SLRN-517 (anti-c-KIT). Impressively, each asset has pipeline-in-a-product potential with indication expansion opportunities into additional blockbuster indications. Looking ahead to the next ~year, SLRN has 10 direct catalysts and 25 indirect catalysts, which we believe will be key stock-moving events to ultimately drive shares up.”
Up, indeed. Along with Rahimi’s Overweight (i.e., Buy) rating, her $68 price target suggests shares will climb 152% higher over the coming year. (To watch Rahimi’s track record, click here)
Overall, SLRN stock has garnered 4 analyst reviews recently and all are positive, making the consensus view here a Strong Buy. The forecast calls for one-year returns of 58%, considering the average target stands at $42.67. (See SLRN stock forecast)
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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.