Rags to riches is a common trope in our storytelling. Some people actually live it, and few more so than hedge fund billionaire Israel Englander.
Using $35 million in seed money, Englander started Millennium Management – and by 2019 his firm was managing over $39 billion. As of this year, that number is up to $57 billion. In 2020, Millennium brought in a total of $10.2 billion for its investors, and Englander took home $3.8 billion in personal earnings – which made him the highest paid fund manager on Wall Street.
So, investors seeking strong returns can do a lot worse than to follow Englander’s stock buys. We’ve done just that, using the TipRanks platform to pull up details on three stocks in which Englander staked out new positions. The platform revealed that each has earned a “Strong Buy” analyst consensus and boasts significant upside potential. Let’s take a closer look.
Nuvation Bio (NUVB)
We’ll start with Nuvation, a clinical-stage biopharma company involved in oncological research. Nuvation is investigating ‘differentiated and novel’ therapeutic agents, testing their potential to meet unmet needs in cancer treatment. The company’s pipeline, which features new drug candidates for the treatment of a wide range of cancers is mostly in the preclinical stages – but there is one Phase 1 study with enrollment ongoing.
That study focuses on drug candidate NUV-422, a CDK 2/4/6 inhibitor, as a treatment for high grade gliomas, a form of brain cancer. Preclinical testing showed that the drug crossed the blood-brain barrier, and limits various causes of toxicity. The Phase 1/2 study was started in December of last year, and continues to enroll patients. The company expects to release data from the Phase 1 portion of the study next year.
In addition to this study, the company has recently announced FDA clearance for two new Investigational New Drug Applications for NUV-22, in the treatment of prostate cancer and advanced breast cancer. Nuvation has several more INDAs planned for submission by 2026, in the treatment of various solid tumors and hematologic cancers.
Englander was impressed enough with Nuvation’s situation to buy in, staking a new position of 373,471 shares in Q3. These are currently worth $3.52 million.
The hedge billionaire isn’t Nuvation’s only fan. RBC analyst Kennen MacKay lays out a clear case for optimism in this company: “We continue to like NUVB at these early stages as they progress towards de-risking events… The expansion cohorts continue enrollment with the expectation of the first Ph1 data readout in 2022. In the Q3 report, the company reiterated their previous timeline for trial enrollment and data readout, providing confidence in the ability for the company to execute during these early stages of development. We believe this positions the company well with multiple ‘shots-on-goal’ with their lead asset.”
To this end, MacKay rates NUVB an Outperform (i.e. Buy), and his $15 price target implies an upside of 59% for the coming year. (To watch MacKay’s track record, click here)
The RBC view is far from the only positive analyst report on Nuvation; the company has received unanimously positive reviews in recent weeks for a Strong Buy consensus. NUVB shares are trading for $9.13, and their average price target of $16 suggests room for a 69% upside from that level. (See NUVB stock forecast on TipRanks)
Thorne HealthTech (THRN)
For the next stock, we’ll stay in the healthcare segment – but take a very different look at it. Thorne is a leader in the health tech industry, offering customers – individuals, healthcare professionals, corporations, and health care plan providers – a science-driven, personalized approach to keeping up health and well-being. Customers can get actionable insights based on personalized data, insights that inform their choice of products and services to improve and maintain health outcomes.
This is a new stock in the public markets. Thorne held its IPO in September of this year. The company put 7 million shares on the market at $10 each, meeting the initial pricing and raising $70 million gross capital.
In its first financial report as a public company, for 3Q21, released in November, Thorne showed several positive metric. Gross margins came in at over 53%, a near-record for the company, and revenue, at $48 million, beat the forecast by 6%.
It’s clear that Englander liked what he saw in Thorne – his firm bought 492,928 shares in the company in Q3. At the current valuation, this is worth $3.39 million.
In coverage of Thorne for RBC, analyst Sean Dodge writes: “While the supplements space is fragmented, Thorne has established itself as a premium brand with an impressive list of partners. Moreover, we believe the company has underinvested in sales and marketing, leaving a substantial opportunity to capture share in a large, growing market with a heightened focus on preventative health. Further, its Onegevity data and analytics platform provides additional B2B growth opportunities, in our view enough to sustain 30%+ revenue growth for several years. While EBITDA will likely see some compression as the company ramps marketing spend, adjusted EBITDA margins should remain positive and resume an upward trajectory toward the company’s 18–20% long-term target.”
In line with these comments, Dodge gives the stock an Outperform (i.e. Buy) rating, along with a price target of $11, suggesting it has room for 65% upside by the end of next year. (To watch Dodge’s track record, click here)
Overall, Thorne has a unanimous Strong Buy consensus rating based on 4 positive reviews. The stock is trading for $6.61 and its average price target of $11.50 indicates a potential 74% upside from that level. (See THRN stock forecast on TipRanks)
Hyzon Motors (HYZN)
Last on our list, Hyzon Motors, is a ‘green’ automaker, an appellation that can apply to both the company and the product. Hyzon is developing hydrogen fuel cell vehicles, an alternative to battery-powered electric cars. Hydrogen fuel cell tech has potential to power passenger and commercial vehicles, while emitting only water as a by-product. Hyzon’s focus is commercial vehicles and trucks.
The company has a facility in Rochester, New York, that produces 150kW fuel cells, and is gearing up to produce 370kW systems. These will generate the equivalent of 500 horsepower, and will be suitable for a range of heavy-duty commercial applications, including mining vehicles, marine vessels, and inter-city rail locomotives.
Hyzon in recent weeks has been pursuing moves into the Chinese commercial vehicle market. The company on December 8 announced that it had delivered 29 fuel cell electric trucks, 49 ton models, to a major steel conglomerate in that country. The delivery was facilitated by the Shanghai Hydrogen HongYun Automotive Company. The trucks use 170kW power cells and are expected to eliminate up to 140 tons of CO2 during their lifetimes.
That deliver followed another trial delivery, of eight dump trucks to the Foshan Municipality. The delivery to Foshan is part of a trial, to see if fuel cell tech can replace diesel fuel.
Because it has not yet begun regular production, but is instead still delivering small orders for trial use, Hyzon has a revenue stream of only $968,000. The company reported a solid balance sheet in the most recent quarter, 3Q21, with $498 million in liquid assets available.
Izzy Englander is clearly not worried by Hyzon’s speculative nature, and bought 1,356,081 shares in the firm in Q3. This stake is worth $9.11 million at current prices.
Analyst Richard Ryan, from Colliers Securities, is another fan of this stock, writing, “The company has seen supply chain headwinds during 3Q21, but will likely find success in mitigating future disruption because of a pivot into the Chinese market over the European market. The foray into China will likely prove to be critical to HYZN’s ability to receive necessary parts for production and maintain their guided delivery count.”
These comments back up a Buy rating on the stock, and Ryan’s $15 price target implies a 120% upside ahead. (To watch Ryan’s track record, click here)
All in all, Hyzon’s analyst reviews break down 3 to 1 in favor of Buy over Hold, for a Strong Buy consensus rating, and the $13 average price target suggests a potential for ~91% upside from the trading price of $6.78. (See HZNP stock forecast on TipRanks)
To find good ideas for biotech or EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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.