Billionaire Ray Dalio Bets On 3 “Strong Buy” Shares
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 commodity futures, founded the world’s largest hedge fund, Bridgewater Associates, in 1975. With the firm managing about $ 140 billion in Global investments and Dalio’s own net worth reaching $ 17 billion, he has earned legendary status on Wall Street. To sum up his success, Dalio has three tips for investors. First, diversify. Holding a wide range of stocks in the portfolio, from multiple sectors, is the safest way to invest well. Second, don’t think that rising markets will go up forever. This is the Dalio variation on an old saw that past performance does not guarantee future performance. Dalio will tell you that all the strong past returns really warrant today’s high prices. And finally, Dalio tells investors: “Do the opposite of your instincts.” Or put another way, don’t follow the pack, as such thinking often leads to suboptimal results. Looking at Dalio for investment inspiration, we used the TipRanks database to find out if three stocks the billionaire recently added to the fund represent attractive plays. According to the platform, the analyst community thinks so, and all picks get consensus ratings of “Strong Buy.” Linde PLC (LIN) The first new position is in Linde, the world’s largest industrial gas production company, either by revenue or market share. Linde produces a range of gases for industrial use and is the leading supplier of argon, nitrogen, oxygen and hydrogen, along with 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 maxim to “diversify”. Linde’s industry leadership and essential products helped the company recover from the crown crisis. The company’s revenues fell in 1H20, but grew in the second half, reaching pre-crown levels in the third quarter and exceeding those levels in the fourth quarter. In a sign of confidence, the company kept its dividend stable during the ‘crown year’, at 96 cents per common share, and in its recent first quarter statement, Linde increased the payment to $ 1.06 per share. This annualizes at $ 4.24 and gives a return of 1.7%. The key point here is not modest performance, but rather the company’s confidence in the safety of its positions, allowing it to maintain a consistent dividend at a time when many pairs are cutting their profit share. It is not surprising, then, that an investor like Dalio takes an interest in a company like Linde. The billionaire’s fund bought 20,149 shares during the fourth quarter, worth $ 5.05 million at current prices. In evaluating Linde for BMO, analyst John McNulty expresses confidence in Linde’s current performance. “LIN continues to execute its growth strategy to drive strong double-digit earnings growth, especially without requiring additional macro improvement. In our view, management’s guidance of 11-13% for 2021 remains conservative driven by its upcoming projects, continued pricing, efficiency gains and strong buybacks with their strong balance sheet and cash flows. Additionally, FCF’s strong position provides them with plenty of dry powder for M&A, capitalization reductions, etc. We believe LIN is poised to continue to surprise investors and outperform groups even in a cyclical market. The world’s largest industrial gas company, “McNulty said. Based on his bullish comments, McNulty rates LIN as a Buy, and his price target of $ 320 implies a ~ 28% increase for next year. (To view McNulty’s track record, click here) Wall Street analysts are in general agreement on the quality of Linde’s stock, as evidenced by 15 Buy reviews topping 3 positions. This gives the stock its Strong Buy analyst consensus rating. The shares are priced at $ 250.88 and their average price target of $ 295.73 suggests they have ~ 18% growth ahead. (See LIN stock analysis on TipRanks) BlackRock (BLK) Next up is the world’s largest asset manager. BlackRock has more than $ 8.67 trillion in assets under management. The company is one of the dominant index funds on the US financial scene, with revenue of $ 16.2 billion last year, with a net income of $ 4.9 billion. BlackRock’s recent fourth quarter report shows its strength, to the extent possible. EPS was $ 10.02 per share, a sequential gain of 12% and a year-on-year gain of 20%. Quarterly revenue of $ 4.8 billion increased 17% year-over-year. The top line for the full year is up 11% from 2019. BlackRock achieved all of this even as the crown crisis flattened the economy in 1H20. In the first quarter of this year, BlackRock declared its regular quarterly dividend and increased the payment by 13% to $ 4.13 per common share. With an annualized payment of $ 16.52, this gives a return of 2.3%. The company has maintained the reliability of the dividend for the last 12 years. Not wanting to miss out on a compelling opportunity, Dalio’s fund pulled the trigger on 19,917 shares, giving him a new position in BLK. The value of this new addition? More than $ 14 million. Covering BLK for Deutsche Bank, analyst Brian Bedell writes: “We view Q4 results to be very good with strong long-term net inflows on all of its products, which we expect to continue despite a one-time $ 55 billion outflow of low commission equity pension funds expected asset ratios in 1H21 than mgmt. said it would have minimal impact on base rate revenue. Additionally, total net inflows drove an annualized organic base management fee growth of 13%, a quarterly record, over annualized long-term organic AuM growth of 7%. We expect organic base rate growth to outpace AuM organic growth in 2021 driven by a biased flow mix towards higher rate products for now. ”To this end, Bedell rates BLK on Buy and its $ 837 price target. suggests the stock is ~ 18% higher ahead. (To view Bedell’s history, click here) Analyst consensus tells a very similar story. BLK has received 6 buy ratings in the last three months, up from a single hold, a clear sign that analysts are impressed with the company’s potential. The stock is selling for $ 710.11 and the average target price of $ 832.17 gives the stock upside potential of 17 %. (See BLK stock 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 that is used in the treatment of a wide range of sick Chronic ades, such as rheumatoid arthritis, Crohn’s disease, and psoriasis. The company’s other immune drugs, Skyrizi and Rinvoq, were approved by the FDA in 2019 as treatments for psoriasis and rheumatoid arthritis, respectively, and posted combined sales of $ 2.3 billion last year. AbbVie expects these drugs to ‘fill the gap’ in earnings when Humira’s patents expire in 2023, with up to $ 15 billion in sales by 2025. Humira is currently the main driver of AbbVie’s immunology portfolio, providing $ 19.8 billion of the $ 22.2 in the portfolio. billion in annual revenue, and a significant portion of the company’s total sales. For the full year 2020, across all divisions, AbbVie had revenue of $ 45.8 billion, with an adjusted diluted EPS of $ 10.56. In addition to its high-profile anti-inflammatory line, AbbVie also has a long-standing ‘stable’ of drugs on the market. For example, the company owns Depakote, a common anti-seizure drug. AbbVie also maintains an active line of research, with dozens of drug candidates undergoing studies in the disciplines of immunology, neuroscience, oncology and virology. For investors, AbbVie has a long-standing commitment to return profits to shareholders. The company has an 8-year history of maintaining a reliable and growing dividend. In the most recent statement, made this month for a payment due in May, AbbVie raised the dividend 10% to $ 1.30 per common share. At $ 5.20 annualized, this gives a 4.9% return. Once again, we are seeing actions that incorporate some of Dalio’s advice. Pulling the trigger on ABBV in the fourth quarter, Dalio’s firm bought 25,294 shares. At current valuation, this is worth $ 2.66 million. Leerink analyst Geoffrey Porges covers ABBV and is impressed with the way the company is preparing in advance for the loss of US exclusivity on its best-selling product. “Between ABBV’s ex-Humira portfolio growth trajectory and a broad portfolio of catalysts in early-, mid- and late-stage assets, it is difficult to find a better positioned biopharmaceutical company, even with its looming LOE. ABBV is ready for 2023 and has growth drivers to drive better than average revenue growth and industry results in the period before (2021-2022) and after (2024-2028) 2023, ”Porges said. Porges gives ABBV a superior performance rating (ie buy) and sets a price target of $ 140 which indicates room for a 33% increase in one year. (To see the history of Porges, click here) Overall, there are 10 reviews of ABBV shares, and 9 of them are for Buy, a margin that makes the consensus of analysts rate a Strong Buy. The stock is trading at $ 105.01 and has an average price target of $ 122.60. This suggests a ~ 17% rise over the next 12 months. (See ABBV’s share analysis on TipRanks) To find good ideas for trading stocks with attractive valuations, visit TipRanks Best Stocks to Buy, a recently launched tool that brings together all TipRanks share insights. Disclaimer: The opinions expressed in this article are solely those of prominent 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.