In this article, we will take a detailed look at the 10 Stocks George Soros and Insiders Are Crazy About. For a quick overview of such stocks, read our article 5 Stocks George Soros and Insiders Are Crazy About.
The strange calm in the US stock markets following the latest hotter-than-expected CPI report has analysts scratching their heads. Many expected stocks to fall after the latest inflation data as a resurgence of inflation could throw water on rate cuts expectations. However, many market experts are examining the latest inflation report and believe it won’t move the needle for the Fed when it comes to the central bank’s planned rate cuts later this year. Kevin Gordon, senior investment strategist at Schwab, said in a note on March 12 that while the “stickiness” of inflation might look worrying, there are some aspects in the report which are “encouraging.”
“Key consumer staples items like food prices fell in February, so goods deflation helped put downward pressure on overall CPI and worked against upward pressure from energy prices.”
Principal Financial Group also said in its note on March 12 that inflation resurgence is unlikely despite the data in the latest CPI report. However, the firm said if March CPI data also comes in hotter than expect, it could force the Fed to postpone interest rate cuts to the second half of the year.
Higher for Longer and the “Virtuous Cycle” of AI Investments
Some analysts also believe we are in for a higher for longer scenario where the Fed could keep interest rates higher for several more months. But that would also be ok for investors since rising productivity and earnings expectations could offset the effects of higher rates on the stock market. Bank of America recently increased its EPS estimate for the S&P 500 for the year end to $250, a new Street high. AI is at the core of Bank of America’s bullish thesis, since it believes the AI boom has created a “virtuous cycle” of investments in the industry.
Bank of America believes 2023 was a “transition year” for the markets and companies are now getting used to higher interest rates and “tepid” demand.
Bank of America expects major tech companies like Microsoft, Amazon, Alphabet and Meta Platforms to spend a whopping $180 billion in capital expenditures in 2024. These new investment cycles driven by the AI demand would also help other sectors, according to the bank, causing a bifurcation of market returns which were, until last year, enjoyed only by the Magnificent Seven group of stocks.
Methodology
For this article we decided to take a look at the stocks liked by billionaire George Soros’s fund as well as corporate insiders. To find these stocks we first scanned Soros Fund Management Q4’2023 portfolio and then picked 10 stocks that have seen high insider buying activity over the past one year. We used Insider Monkey’s insider trading stock screener to find stocks with insider buying activity. Some top names in the list include Marriott Vacations Worldwide Corp (NYSE:VAC), Energy Transfer LP Unit (NYSE:ET) and Nike Inc (NYSE:NKE). But why is it important to keep tabs on hedge fund and insider activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Augmedix Inc (NASDAQ:AUGX)
Soros Fund Management’s Stake: $517,819
Medical documentation and clinical support solutions company Augmedix Inc (NASDAQ:AUGX) was a new arrival in George Soros’ fund portfolio since Soros Fund Management bought 88,516 shares of Augmedix Inc (NASDAQ:AUGX) during the fourth quarter of 2023.
On November 20, 2023, Redmile Group, LLC, which has a director status and a 10% stake in Augmedix Inc (NASDAQ:AUGX), bought 1.5 million shares of Augmedix Inc (NASDAQ:AUGX) at $4.00 per share. Since then the stock is down by about 28%.
9. ONEOK Inc (NYSE:OKE)
Soros Fund Management’s Stake: $3,826,498
Natural gas company ONEOK Inc (NYSE:OKE) is one of the stocks George Soros and insiders are buying. ONEOK Inc’s (NYSE:OKE) CEO Pierce H. Norton on June 29, 2023, bought 24,607 shares of ONEOK Inc (NYSE:OKE) at $60.96 per share. Since then, the stock has gained about 26% through March 12. George Soros’ fund reported owning a $3.8 million stake in ONEOK Inc (NYSE:OKE) as of the end of 2023.
8. Enterprise Products Partners LP (NYSE:EPD)
Soros Fund Management’s Stake: $5,006,500
William Montgomery, a director at natural gas and crude oil pipeline company Enterprise Products Partners LP (NYSE:EPD), bought 50,000 shares of Enterprise Products Partners LP (NYSE:EPD) at $26.60 per share on August 4,2023. Since then the stock has gained about 7%. As of the end of the fourth quarter of 2023, George Soros’ fund had a $5 million stake in Enterprise Products Partners LP (NYSE:EPD).
In addition to EPD, hedge funds also like Marriott Vacations Worldwide Corp (NYSE:VAC), Energy Transfer LP Unit (NYSE:ET) and Nike Inc (NYSE:NKE).
Last month, the company announced Q4 results and talked about important financial updates:
“We generated $7.6 billion of distributable cash flow in 2023, providing 1.7 times coverage, and we retained $3.2 billion. We set nine financial records and 13 operating records in 2013. Our 2023 operating results included records in NGL pipeline transportation, ethane exports, total NGL marine terminal volumes, NGL fractionation volumes, fee based natural gas processing volumes and crude pipeline and natural gas transportation volumes barrels of oil equivalent per day enterprise transported a record 12.2 million barrels a day in 2023, compared to 11.2 million barrels a day in 2022. During the fourth quarter, we transported 12.7 million barrels a day, compared to 11.5 million barrels a day in the fourth quarter of 2022.
We exported a record 2.3 million barrels a day of liquid hydrocarbons. That includes everything from crude oil to LPGs to ethane, refined products and basic petrochemicals, ethane and propylene. When you look at our exports, it’s clear that enterprise is not a one trick pony. It’s quite remarkable that volumes across all our pipes and facilities increased sequentially each quarter in 2023, supported by the strong supply and demand fundamentals for hydrocarbons from the Permian and other basins we serve integrated with the midstream services we have, including exports that we just discussed. Relative to commodity markets, 2023 was a relatively weak year, especially for natural gas and natural gas liquids. Nonetheless, Enterprise proved once again that we don’t need really high prices to make substantial returns.”
Read the full earnings call transcript here.
7. Evolus Inc. (NASDAQ:EOLS)
Soros Fund Management’s Stake: $5,791,500
Skincare and beauty solutions company Evolus Inc. (NASDAQ:EOLS) is one of the stocks in George Soros’ fund portfolio that also saw insider buying activity over the past few months. On August 15, 2023, Vikram Malik loaded up on 174,967 shares of Evolus Inc. (NASDAQ:EOLS) at $7.41 per share. Since then the stock has jumped by about 38%.
As of the end of the fourth quarter of 2023, George Soros’ hedge fund reported owning a $5.8 million stake in Evolus Inc. (NASDAQ:EOLS).
Earlier this month, during its Q4 earnings call, the company talked about important business updates and guidance:
“Non-GAAP loss from operations for the full year excludes stock-based compensation expense, revaluation of the contingent royalty obligation and depreciation and amortization. Turning to the balance sheet. We ended the year with $62.8 million cash compared to $38.7 million at September 30, 2023. In the fourth quarter, we had a record low quarterly cash use of $0.9 million, excluding the $25 million tranche drawn under the Pharmacon line of credit and generated cash from operating activities of $0.8 million. Net cash used in the fourth quarter of 2023 continued its sequential quarterly decrease throughout 2023, further demonstrating our continued progress towards cash flow breakeven.
Given the capital-efficient nature of our filler agreements, we continue to expect our liquidity to fully fund us the profitability and beyond. Before we turn to Q&A, I would like to summarize our 2024 guidance. Total revenue for the full year of $255 million to $265 million, this equates to 26% to 31% growth for the full year. Adjusted gross margins in the range of 68% to 71%. Full year 2024 non-GAAP operating expenses between $185 million and $190 million. Profitability, defined as positive non-GAAP operating in the fourth quarter of 2024 and for the full year 2025. As a point of note, due to onetime filler launch expenses within 2025, profitability may not be achieved every quarter. Other modeling assumptions for 2024 include quarterly interest expense of $4.4 million and full year weighted average shares outstanding of approximately 57 million.
Looking beyond 2024, we continue to target total revenue of at least $700 million in 2028, driven by continued growth in share gains in our neurotoxin business in the U.S. and international markets along with the growing contribution from our line of fillers that begins in 2025. This equates to a compounded annual operate of 28% on a total addressable market of approximately $6 billion today, growing to approximately $10 billion in 2028.”
Read the entire earnings call transcript here.
6. Immunovant Inc (NASDAQ:IMVT)
Soros Fund Management’s Stake: $5,898,200
Immunovant Inc (NASDAQ:IMVT) ranks sixth in our list of the stocks George Soros and insiders are buying. Roivant Sciences Ltd., which has a director status at Immunovant Inc’s (NASDAQ:IMVT) board as well as a 10% stake, bought 1,526,316 IMVT shares at $38.00 per share on October 2, 2023. Since then the stock has fallen about 9%.
George Soros, via his fund, had a $6 million stake in Immunovant Inc (NASDAQ:IMVT) as of the end of the fourth quarter of 2023.
Hedge funds are also buying Marriott Vacations Worldwide Corp (NYSE:VAC), Energy Transfer LP Unit (NYSE:ET) and Nike Inc (NYSE:NKE).
Baron Health Care Fund stated the following regarding Immunovant, Inc. (NASDAQ:IMVT) in its fourth quarter 2023 investor letter:
“We initiated a position in Immunovant, Inc. (NASDAQ:IMVT), a clinical-stage biotechnology company developing therapies for autoimmune diseases. During the quarter, the company announced data from a Phase 1 clinical trial of IMVT-1402, an FcRn inhibitor that has broad potential applicability to multiple autoimmune diseases. The data showed that IMVT-1402 delivered dose dependent and deep reductions in disease-causing auto-antibodies with minimal changes in albumin and low-density lipoprotein cholesterol. The company’s first generation FcRn inhibitor has shown strong efficacy but there have been questions about the safety profile of the drug. This promising data makes Immunovant a real competitor in the FcRn inhibitor drug class, though Immunovant is behind argenx in terms of timing. We think both companies can be successful given the broad array of autoimmune diseases that can potentially be treated with a safe and effective FcRn inhibitor.”
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Disclosure. None. 10 Stocks George Soros and Insiders Are Crazy About is originally published on Insider Monkey.