Comerica (CMA) takes advantage of cost control: should we hold on?
Some investors achieve legendary status, far surpassing their peers through a combination of luck and success. No one is perhaps more representative of it than George Soros, the Holocaust survivor who after the war earned a doctorate from the London School of Economics and went into banking to make his mark. He was very successful. The hedge fund he founded, Soros Fund Management, achieved an average annualized return of 33% from 1970 to 2020, making it the most successful hedge fund in history. Soros’ greatest success came on September 16, 1992, when he “broke the Bank of England”. He had taken a short position on the pound sterling, which rose to $ 10 billion, and when the pound fell in response to the policy shift, he personally gained $ 1 billion in a single day. Soros hasn’t always been right in his financial appeals, but he’s more often right than wrong. He is also known for his good words when it comes to trading. “It’s not whether you’re right or wrong,” Soros said, “but how much money you make when you’re right and how much you lose when you’re wrong.” With this in mind, we decided to take inspiration from the recent activity of Soros Fund Management. By managing three stocks that the fund picked up in the first quarter through the TipRanks database, we found that the analyst community was on board as well, as each carries a “Strong Buy” consensus rating. Farfetch, Ltd. (FTCH) We will start with an online retail inventory, Farfetch, a company specializing in the sale of luxury products and brands. Farfetch is a truly international company, founded in Portugal, headquartered in London with offices in New York and Los Angeles, Tokyo and Shanghai, and Brazil. Like many tech-focused companies, Farfetch operated at a loss – but in the first quarter of this year the company made a sharp turnaround in profitability. The 1Q21 earnings report showed an after-tax profit of $ 516.7 million, compared to a quarterly loss of $ 79.2 million a year ago. The company disclosed that this gross profit included a one-time non-cash benefit of $ 660 million “arising from the lower impact of the share price on items held at fair value and revaluations.” Total operating revenue was reported at $ 485 million, up 46% year-over-year, and above the $ 457 million expected by analysts. A key metric, the gross merchandise value of orders processed on the company’s platform, increased 49% year-over-year to $ 915.6 million. Farfetch’s success is built on a strong user base. The company has more than 3 million active customers and operates in 190 countries. The platform’s vendors have made available more than 1,300 luxury brands. Even after a decline in the stock’s value in the first half of 2021, the stock has still risen 234% in the past 12 months. Among the FTCH fans is Soros. In his most recent disclosure, Soros revealed that his fund had purchased 125,000 shares of FTCH, a stake now valued at more than $ 5.5 million. As for the analyst community, Credit Suisse 5-star analyst Stephen Ju credits FTCH with an outperformance (i.e. a buy) with a price target of $ 78. Investors are expected to pocket a gain of around 88% if the analyst’s thesis comes to fruition. (To view Ju’s track record, click here) “We have a positive opinion on the Company’s continued Adjusted EBITDA forecast as Farfetch will reinvest the highest revenue contributions into customer acquisition – supporting 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 million to 1.5 million, ”Ju said. The analyst summed up: “Our investment thesis points remain: 1) the large addressable $ 300 billion market remains fragmented and underpenetrated, 2) relative protection against competition from larger cap online competitors. , 3) exposure to the growing adoption of luxury goods in the APAC region as well as emerging markets. ”Most analysts support Ju’s confident view of the online fashion company, as TipRanks analyzes present FTCH as a strong buy. Based on 8 analysts polled in the past 3 months, 6 attribute the stock to a buy, while 2 attribute it to a wait. The 12-month average price target is 60. $ 63, which is an increase of around 37% from current levels. (See FTCH market analysis on TipRanks) Coursera (COUR) The next stock we are looking at, Coursera, is a MOOC company – a provider very open online course. C he niche is leveraging the size and reach of the Internet to make a wide range of high-level university courses available to the general public. Coursera is a leader in the field and, since its inception in 2012, it has made available over 4,000 courses from over 200 universities, in over 30 study programs, and at a lower cost than coursework. in person. Through Coursera, students can take courses at top schools such as Imperial College London, University of Illinois at Urbana-Champaign, University of Michigan, and Johns Hopkins. The company boasts that over 77 million students have used its services. Although the company is 9 years old, it is new to public procurement; Coursera held its IPO at the end of March this year. It made 15.73 million shares available on the NYSE, at an opening price of $ 33. It was the high end of the original price range, which was set between $ 30 and $ 33. Overall, the IPO raised $ 519 million, before expenses. In early May, Coursera published its first quarterly report since its IPO. The report showed total revenue of $ 88.4 million, a 64% year-over-year gain. The company’s gross profit, at $ 49.5 million, was up 71% from the quarter last year. George Soros saw an opportunity in this IPO, and his fund picked up 105,000 shares of the company. This new position is valued at ~ $ 4 million at the current share price. Among the bulls is 5-star analyst Ryan MacDonald, of Needham, who presents a clear and bullish case for Coursera shares. “Given the growing role of automation, the widening of the skills gap and the shift to e-learning, we believe that Coursera’s comprehensive platform will help it gain shares in a large TAM that we estimate between $ 47 billion and $ 50.6 billion. As the COVID-focused tailwind for the growth of enrolled learners in FY20 creates a difficult comparison for the consumer segment in FY21, we believe that Coursera’s effective GTM move and the passage higher value corporate and degree offerings can generate 25% + sustainable growth and gross margin expansion, ”MacDonald noted. To that end, MacDonald gives COUR a buy rating and his price target of $ 56 indicates confidence in a 47% hike over the next 12 months. (To view MacDonald’s track record, click here) During its short time on the stock market, COUR garnered 14 analyst reviews, with a split of 12 buys into 2 holds to support the Strong Buy consensus rating. The shares are trading at $ 38 and their average price target of $ 54.67 implies a one-year rise of 44%. (See COURT Stock Analysis on TipRanks) Sotera Health (SHC) Last on our list of new positions from George Soros is Sotera Health, a holding company whose subsidiaries offer a range of consulting, laboratory testing and sterilization services in the health sector. Sotera’s activities serve more than 5,800 healthcare customers in more than 50 countries. The company has 13 laboratories capable of performing more than 800 tests and 50 sterilization facilities. Sotera’s customer base includes 75 of the top 100 medical device manufacturers and 8 of the top 10 pharmaceutical companies. SHC’s shares went public on November 24 last year, in an IPO that sold 53.6 million shares and raised $ 1.2 billion. The capital raised was used to repay the existing debt. The company has worked diligently to reduce debt levels and, in the 1Q21 report, said it has total debt of $ 1.87 billion and free cash flow of $ 108 million. First quarter net sales were $ 212 million, up 13% from the previous year. Net income showed a strong gain, going 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, buying 179,274 shares of the title. At the current share price, this stake is worth over $ 4.3 million. Tycho Peterson, 5-star analyst at JPMorgan, likes SHC and rates the stock overweight (i.e. buy). Its price target of $ 35 suggests a 45% rise from current trading levels. (To see Peterson’s track record, click here) Supporting his position, Peterson writes: “First quarter results have been generally strong, and while the outlook remains unchanged, it should provide an upward path for the 2021 balance. , as we continue to be fans of the company’s diverse operating platform, rigorous multi-year contracts, effective pricing strategy and strong regulatory oversight, while supporting its broad competitive divide, with FCF to support the deleveraging… ”Overall, The Street is unanimous in its outlook on Sotera shares; the stock recently received 8 positive reviews supporting its Strong Buy analyst consensus rating. The shares are trading at $ 24.06 and their average price target of $ 31.75 implies a year-over-year rise of ~ 32%. (See SHC Stock Analysis on TipRanks) To find great ideas for stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. 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.