In this article, we discuss 5 best Guru stocks to buy now. If you want to see more stocks in this selection, check out 10 Best Guru Stocks To Buy Now.
5. The Allstate Corporation (NYSE:ALL)
Number of Hedge Fund Holders: 37
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.60%
The Allstate Corporation (NYSE:ALL) is an Illinois-based company that provides property, casualty, and other insurance products in the United States and Canada. The company operates through Allstate Protection, Protection Services, Allstate Health and Benefits, and Run-off Property-Liability segments. As of October 18, Guru ETF had 5,309 shares of The Allstate Corporation (NYSE:ALL), worth over $729 million and representing 1.60% of the total net assets.
Keefe Bruyette analyst Meyer Shields on October 11 upgraded The Allstate Corporation (NYSE:ALL) to Outperform from Market Perform with a price target of $158, up from $136, ahead of the Q3 results. The commercial insurers’ core ratios should generally improve year-over-year on earned rate increases despite high loss trends, the analyst told investors.
According to Insider Monkey’s second quarter database, 37 hedge funds were long The Allstate Corporation (NYSE:ALL), compared to 44 funds in the previous quarter. Cliff Asness’ AQR Capital Management is the leading position holder in the company, with 1.72 million shares worth $215 million.
Here is what Appleseed Fund had to say about The Allstate Corporation (NYSE:ALL) in its Q2 2021 investor letter:
“Allstate is the second-largest personal insurance company in the United States with a 9.3% share in auto insurance (4th largest) and an 8.0% share in homeowner’s insurance (2nd largest). The company sells products primarily through its captive agents though this business line is shrinking as the company’s direct (Esurance.com and, more recently, Allstate.com) and independent agent businesses grow more quickly. The personal insurance industry is relatively consolidated, and competition has historically been rational, allowing Allstate to earn attractive mid-teen returns on equity in this business over the past decade. Allstate also recently announced plans to divest their low-growth, low-return life and annuity businesses. This will free up capital to reinvest into the more attractive personal insurance segment and result in improvements on consolidated returns on equity of approximately 2.5%.
Despite the attractive industry dynamics of the personal insurance business and the steps that Allstate has taken to dispose of lower return businesses, the company’s stock currently trades as if Allstate will never be able to grow its earnings. At our purchase price, Allstate’s stock was trading for less than 10.0x forward earnings estimates. While Allstate does face tough competition in the auto insurance business from GEICO and Progressive, their market position, strong brand, and increased investment into the direct insurance business should allow them to grow earnings. Overall, we believe this entry price is attractive for an industry leader in a high-return, consolidating industry. Further, downside risk management should be positively impacted by the dividend yield, a strong balance sheet, and a management team that has historically increased share repurchases when they view the stock to be trading below its intrinsic value.”
4. Bausch Health Companies Inc. (NYSE:BHC)
Number of Hedge Fund Holders: 39
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.61%
Bausch Health Companies Inc. (NYSE:BHC) is a Canadian company that develops, manufactures, and markets pharmaceutical drugs, medical devices, and over-the-counter products in the therapeutic areas of eye health, gastroenterology, and dermatology. Bausch Health Companies Inc. (NYSE:BHC) is one of the best Guru stocks to buy now, with the ETF holding 108,245 shares worth $735 million, representing 1.61% of the total portfolio.
On September 9, Piper Sandler analyst David Amsellem lowered the price target on Bausch Health Companies Inc. (NYSE:BHC) to $6 from $7 and kept a Neutral rating on the shares. The analyst said that Alvogen/Norwich received tentative approval from the FDA for its generic of the 200 mg strength of Bausch Health Companies Inc. (NYSE:BHC)’s Xifaxan. Though prescription volumes for the 200 mg strength only represent 2% of overall Xifaxan volumes, the presence of a generic of this strength “could prove to be disruptive to the brand,” the analyst told investors in a research note.
According to Insider Monkey’s second quarter database, 39 hedge funds were long Bausch Health Companies Inc. (NYSE:BHC), compared to 48 funds in the prior quarter. Carl Icahn’s Icahn Capital LP is the biggest position holder in the company, with 34.7 million shares worth $290 million.
Here is what Miller Value Partners Opportunity Trust Fund has to say about Bausch Health Companies Inc. (NYSE:BHC) in its Q2 2022 investor letter:
“Bausch Health Companies Inc. (NYSE:BHC) declined during the quarter as the company consummated its Bausch+Lomb IPO at valuations far below expectations, reported disappointing Q1 2022 results, and delayed its plan to spin out its Solta (aesthetics) business due to difficult market conditions. While the company spun off 10% of Bausch+Lomb (BCLO) they retained 90% of the company which they intend to distribute once they have met their target leverage ratio of 6.5-6.7x. The future spin-off value of the Bausch+Lomb piece represents a value of $12.55 per share, 39% above where Bausch Health is currently trading. The company recently appointed John Paulsen as Chair of the Board, which should accelerate value realization.”
3. Ascendis Pharma A/S (NASDAQ:ASND)
Number of Hedge Fund Holders: 26
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.72%
Ascendis Pharma A/S (NASDAQ:ASND) is a Denmark-based biopharmaceutical company, focused on developing therapeutics for unmet medical needs. Guru owns 6,966 shares of Ascendis Pharma A/S (NASDAQ:ASND) as of October 18, worth $781.5 million and representing 1.72% of the total portfolio. Ascendis Pharma A/S (NASDAQ:ASND) is one of the premier Guru stocks to buy now.
On October 10, Citi analyst David Lebowitz opened a “90-day upside Catalyst Watch” on Ascendis Pharma A/S (NASDAQ:ASND), relating to upcoming top line data for TransCon CNP for the treatment of achondroplasia from the Phase II ACcomplisH trial. The analyst believes positive data would be a “significant catalyst for shares, leading to double digit upside.”
According to Insider Monkey’s data, 26 hedge funds were bullish on Ascendis Pharma A/S (NASDAQ:ASND) at the end of the second quarter of 2022, compared to 28 funds in the last quarter. Peter Kolchinsky’s RA Capital Management is the leading position holder in the company, with 7.6 million shares worth $703.5 million.
Here is what Artisan Partners specifically said about Ascendis Pharma A/S (NASDAQ:ASND) in its Q2 2022 investor letter:
“Sales for Ascendis Pharma A/S (NASDAQ:ASND)’s recently approved pediatric growth hormone drug, Skytrofa, came in below expectations despite solid prescription volume. Patients are either on the free version of the drug, or they are finishing their current supply before starting treatment. Longer term, we are optimistic the company will convert free Skytrofa patients to the commercial reimbursed product. Furthermore, we anticipate TransCon PTH, used to treat hyperparathyroidism, will be approved and rolled out in 2023, providing another tailwind to the company’s profit cycle.”
2. Repare Therapeutics Inc. (NASDAQ:RPTX)
Number of Hedge Fund Holders: 11
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.77%
Repare Therapeutics Inc. (NASDAQ:RPTX) is headquartered in Montreal, Canada, operating as a clinical-stage precision oncology company that develops therapeutics using its synthetic lethality approach in Canada and the United States. Guru ETF owns 59,021 shares of Repare Therapeutics Inc. (NASDAQ:RPTX), worth $804.45 million and representing 1.77% of the total portfolio.
On June 6, H.C. Wainwright analyst Robert Burns reiterated a Buy recommendation on Repare Therapeutics Inc. (NASDAQ:RPTX) but lowered the price target on the shares to $38 from $54. The licensing agreement with Roche provides external validation for RP-3500, the analyst told investors in a bullish thesis.
Among the hedge funds tracked by Insider Monkey, 11 funds reported owning stakes worth $273.2 million in Repare Therapeutics Inc. (NASDAQ:RPTX) at the end of Q2 2022, compared to 13 funds in the prior quarter worth $261 million. Mark Lampert’s Biotechnology Value Fund BVF Inc is the leading position holder in the company, with 8.3 million shares valued at $116 million.
1. Texas Pacific Land Corporation (NYSE:TPL)
Number of Hedge Fund Holders: 22
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.87%
Texas Pacific Land Corporation (NYSE:TPL) engages in land and resource management and water services businesses. The company distributed a $3 per share quarterly dividend on September 15. Texas Pacific Land Corporation (NYSE:TPL) is the largest holding in Guru’s portfolio as of October 18. The ETF owns a stake worth $850.75 million in Texas Pacific Land Corporation (NYSE:TPL), representing 1.87% of the total holdings.
On September 9, Texas Pacific Land Corporation (NYSE:TPL) and WaterBridge announced a long-term agreement to provide full-cycle water solutions to support sustainable oil and gas development on over 64,000 acres in Loving and Reeves County in the core of the Delaware Basin.
According to Insider Monkey’s second quarter database, 22 hedge funds were long Texas Pacific Land Corporation (NYSE:TPL), compared to 19 funds in the preceding quarter. Murray Stahl’s Horizon Asset Management is the largest position holder in the company, with 1.50 million shares worth $2.24 billion.
Here is what Wedgewood Partners specifically said about Texas Pacific Land Corporation (NYSE:TPL) in its Q3 2022 investor letter:
“Texas Pacific Land Corporation (NYSE:TPL) was a top contributor to performance during the quarter. Revenue vaulted over +80% as oil and gas royalties more than doubled, plus water sales nearly doubled. Most of this was driven by higher realized prices on the production of oil and gas on the Company’s acreage. Production of oil and gas also grew +21%. The Company’s royalty interests span over 880,000 acres in West Texas. Most of this land is located in the highly productive Delaware Basin within the Permian Basin. We expect development activity will continue to grow at a rapid pace in this region, primarily driven by both domestic and multinational producers looking to maximize returns on increasingly scarce oil and gas capital expenditures. Further, as the tragic war in Ukraine has unfolded, energy security has become an increasingly important issue for countries around the globe. The production of hydrocarbons on Texas Pacific’s acreage represents a “port in the storm” for the U.S. and for allies too that are dependent on the energy of hostile countries. It is difficult to know how any specific policy will evolve but possessing a commanding acreage position in one of the most productive regions in the country puts the Company in an excellent strategic and competitively advantaged position.”
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