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Billionaire Ray Dalio bets on 3 “Strong Buy” stocks
When billionaire financier Ray Dalio makes a move, Wall Street pays attention. Dalio, who began working on the floor of the New York Stock Exchange trading in commodity futures, founded the world’s largest hedge fund, Bridgewater Associates, in 1975. The company manages around $ 140 billion in commodities. With global investments and Dalio’s net worth rising to $ 17 billion, he has achieved legendary status on Wall Street. To sum up his success, Dalio has three tips for investors. First of all, diversify. Keeping a wide range of stocks in the portfolio, from multiple sectors, is the safest way to invest well. Second, do not think that the rise in the markets will increase indefinitely. This is the variation of Dalio on an old saw whose past performance is no guarantee of future returns. Dalio will tell you that all the good past returns really guarantee that prices are currently high. And finally, Dalio tells investors, “Do the opposite of what your instincts are.” Or in other words, don’t follow the herd, as such thinking often leads to sub-optimal results. Researching Dalio’s inspiration for investing, we used TipRanks’ database to find out whether three stocks the billionaire recently added to the fund represent compelling games. According to the platform, the analyst community thinks it does, with all picks getting “Strong Buy” consensus ratings. Linde PLC (LIN) The first new position is at Linde, the world’s largest industrial gas producer, both in terms of turnover and market share. Linde produces a range of gases for industrial use and is the leading supplier of argon, nitrogen, oxygen and hydrogen, as well as niche gases such as carbon dioxide for the soft drink industry. The company also produces gas storage and transfer equipment, welding equipment and refrigerants. In short, Linde embodies Dalio’s “diversify” saying. Linde’s leadership in the industry and its essential products have helped the company recover from the corona crisis. The company’s revenue slipped in 1H20, but increased in the second half, reaching pre-corona levels in Q3 and exceeding those levels in Q4. As a sign of confidence, the company kept its dividend stable throughout the “ corona year, ” at 96 cents per common share – and in its recent first-quarter statement, Linde increased the payout to 1.06 $ per share. This annualizes to $ 4.24 and gives a return of 1.7%. The key point here is not the modest return, but the company’s confidence in the security of its positions, which allows it to maintain a steady dividend at a time when many peers are reducing profit sharing. So it’s no wonder that an investor like Dalio is interested in a company like Linde. The billionaire’s fund bought 20,149 shares in the fourth quarter, worth $ 5.05 million at current prices. Evaluating Linde for BMO, analyst John McNulty expresses his confidence in Linde’s current performance. “LIN continues to execute its growth strategy to deliver strong double-digit earnings growth, especially without requiring further macroeconomic improvement. In our view, management’s 11-13% guide for 2021 remains cautious. due to its upcoming projects, continued pricing, efficiencies and strong buyouts with its strong balance sheet and cash flow. In addition, FCF’s strong position provides them with plenty of dry powder for mergers and acquisitions, de-caps, etc. We believe that LIN is poised to continue to surprise investors and outperform the rest of the group, even in a cyclical market, the world’s largest industrial gas company, ”said McNulty . Consistent with his bullish comments, McNulty rates LIN as a buy, and his price target of $ 320 implies a ~ 28% rise for the coming year. (To see McNulty’s track record, click here) Wall Street broadly agrees on the quality of Linde’s stock, as evidenced by the 15 buy reviews overbalancing the 3 holds. This gives the stock its Strong Buy analyst consensus rating. The shares are priced at $ 250.88 and their average price target of $ 295.75 suggests they have about 18% growth ahead. (See LIN stock market analysis on TipRanks) BlackRock (BLK) Next up is the world’s largest asset manager. BlackRock has over $ 8.67 trillion in assets under management. The company is one of the dominant index funds in the U.S. financial scene, and reported $ 16.2 billion in revenue last year, with net income of $ 4.9 billion. BlackRock’s recent fourth quarter report shows its strength, as far as the numbers can go. EPS stood at $ 10.02 per share, a sequential gain of 12% and a gain of 20% year over year. Quarterly revenues of $ 4.8 billion grew 17% year-on-year. The full year high line is up 11% from 2019. BlackRock has achieved all of this even as the corona crisis flattened the economy in 1H20. In the first quarter of this year, BlackRock declared its regular quarterly dividend and increased the payout by 13% to $ 4.13 per common share. With an annualized payout of $ 16.52, that works out to a return of 2.3%. The company has maintained the reliable dividend over the past 12 years. Not wanting to miss a compelling opportunity, Dalio’s fund pulled the trigger on 19,917 stocks, giving him a new position in BLK. The value of this new addition? Over $ 14 million. Covering BLK for Deutsche Bank, analyst Brian Bedell writes: “We consider 4Q’s results to be very good with strong long-term net inflows on its products which we plan to continue despite a one-time outflow of $ 55 billion in funds. Pension low-cost index assets expected in 1H21 of which said would have minimal impact on base fee income. In addition, the total net inflows drove annualized core management expense organic growth of 13%, a quarterly record, out of long-term annualized organic growth of 7%. We expect organic base expense growth to outpace organic growth in assets under management by 2021, driven by a flow mix geared toward higher rate products at this time. To that end, Bedell values BLK a Buy and its price target of $ 837 suggests the stock is up about 18% ahead of it. (To see Bedell’s track record, click here) The Analyst Consensus tells a very similar story. BLK has received 6 buy notes in the past three months, down from just one Hold – a clear sign that analysts are impressed with the company’s potential. The shares are selling for $ 710.11, and the average price target of $ 832.17 gives the stock upside potential of 17%. (See BLK Stock Market Analysis on TipRanks) AbbVie, Inc. (ABBV) AbbVie is a major name in the pharmaceutical industry. The company is the manufacturer of Humira, an anti-inflammatory drug used in the treatment of a wide range of chronic diseases, including rheumatoid arthritis, Crohn’s disease and psoriasis. The company’s other immunologic drugs, Skyrizi and Rinvoq, were approved by the FDA in 2019 as treatments for psoriasis and rheumatoid arthritis, respectively, and had combined sales of $ 2.3 billion per year. last. AbbVie expects these drugs to “fill the gap” in profits when Humira’s patents expire in 2023, with revenue of up to $ 15 billion by 2025. Humira is currently the primary driver of the business. AbbVie’s immunology portfolio and provides $ 19.8 billion of the $ 22.2 billion portfolio. billion dollars in annual revenues, and a significant portion of the company’s total sales. For full year 2020, across all divisions, AbbVie had revenue of $ 45.8 billion, with adjusted diluted EPS of $ 10.56. In addition to its high level anti-inflammatory line, AbbVie also has a “stability” of drugs long established in the market. For example, the company owns Depakote, a common anti-seizure drug. AbbVie also maintains an active research pipeline, with dozens of drug candidates under study in the disciplines of immunology, neuroscience, oncology and virology. For investors, AbbVie has a long-standing commitment to returning profits to shareholders. The company has an 8 year history of maintaining a reliable dividend – and growing. In the most recent statement, made this month for a payment to be made in May, AbbVie increased the dividend by 10% to $ 1.30 per common share. At $ 5.20 annualized, that works out to a 4.9% return. Once again, we take a look at a stock that embodies some of Dalio’s advice. Pulling the trigger on ABBV in the fourth quarter, Dalio’s company bought 25,294 shares. At the current valuation, it’s worth $ 2.66 million. Leerink analyst Geoffrey Porges is covering ABBV and is impressed with how the company is preparing for the loss of US exclusivity on its best-selling product. “Between the growth trajectory of ABBV’s ex-Humira portfolio and a large portfolio of catalysts in first-, mid- and late-stage assets, it is difficult to find a better positioned biopharmaceutical company, even with its impending LOE. ABBV is ready for 2023 and has growth engines to generate above and below industry average growth before (2021-2022) and after (2024-2028) 2023, ”said Porges. Porges gives ABBV an outperformance (i.e. buy) rating and sets a price target of $ 140 which indicates a 33% year-over-year upside margin. (To watch Porges’ history, click here) Overall, there are 10 reviews on ABBV stocks, and 9 of them are buyable – a margin that makes the analysts consensus rating a buy strong. The stock is trading at $ 105.01 and has an average price target of $ 122.60. This suggests an increase of around 17% over the next 12 months. (See ABBV Stock Analysis on TipRanks) To get 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.
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