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Billionaire Ray Dalio places a bet on 3 “Strong Buy” shares
When billionaire financier Ray Dalio makes a move, Wall Street pays attention. Dalio, who began working on the New York Stock Exchange trading floor for commodity futures trading, founded the world’s largest hedge fund, Bridgewater Associates, in 1975. The company managed approximately $ 140 billion in global investments and Dalio’s own net worth came to $ 17 billion, has earned him legendary status on Wall Street. To summarize his success, Dalio has three pieces of advice for investors. First of all, diversify. Holding a wide variety of stocks in the portfolio, from multiple sectors, is the surest way to invest well. Second, don’t think bull markets will rise forever. This is Dalio’s variation on an old saw that past results are no guarantee of future returns. Dalio will tell you that all of the strong returns from the past are really the current high prices. And finally, Dalio tells investors, “Do the opposite of what your instincts are.” In other words, don’t follow the herd, because such thinking often leads to suboptimal results. Looking to Dalio for investment inspiration, we used TipRanks’s database to find out if three stocks the billionaire recently added to the fund represent compelling moves. According to the platform, the analyst community believes so, with all choices earning “Strong Buy” consensus ratings. Linde PLC (LIN) The first new position is in Linde, the world’s largest industrial gas production company, be it revenue or market share. Linde produces a range of gases for industrial use and is the dominant 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 ‘diversify’ dictum. Linde’s industry leadership and essential products helped the company recover from the corona crisis. The company’s revenues fell in 1H20, but grew in the second half, reaching pre-corona levels in Q3 and surpassing those levels in Q4. As a sign of confidence, the company kept its dividend steady at 96 cents per share of common stock throughout the ‘corona year’ – and in its recent Q1 statement, Linde increased the payment to $ 1.06 per share. This comes to $ 4.24 on an annual basis and gives a return of 1.7%. The key point here is not modest returns, but the company’s confidence in the security of its positions, allowing it to maintain a stable dividend at a time when many industry peers are cutting profit-sharing. It is therefore no wonder that an investor like Dalio would take a stake in a company like Linde. The billionaire’s fund acquired 20,149 shares in the fourth quarter, worth $ 5.05 million at current prices. Analyst John McNulty rates Linde for BMO and expresses confidence in Linde’s current performance. “LIN continues to pursue its growth strategy to drive solid double digit earnings growth, particularly without the need for further macro improvement. In our view, management’s 11-13% guideline for 2021 remains conservative, driven by the upcoming projects, continuous pricing, efficiency gains and solid buybacks with its strong balance sheet and cash flows Furthermore, the solid FCF position provides them with enough dry powder for M&A, cut-offs, etc. We think LIN is ready to continue to surprise and improve investors outperforming the broader group even in a cyclical market the largest global industrial gas company, “McNulty said. In line with his optimistic comments, McNulty considers LIN a buy, and his $ 320 price target implies a ~ 28% rise for the coming year. years. (Click here to view McNulty’s track record) Wall Street analysts broadly agree on the jellyfish Linde’s stock, as evidenced by the 15 Buy reviews that overbalance the 3 Holds. This indicates its consensus rating for analysts at Strong Buy. The stock is priced at $ 250.88 and their average price target of $ 295.73 suggests they have ~ 18% growth ahead of them. (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 in the US financial world, having revenues of $ 16.2 billion last year, with net income of $ 4.9 billion. BlackRock’s recent Q4 report shows its strength, as far as the numbers can. Earnings per share came in at $ 10.02 per share, consecutive earnings of 12% and earnings of 20% year-on-year. Quarterly sales of $ 4.8 billion were 17% higher than last year. Full year sales were 11% higher than in 2019. BlackRock achieved all of this even as the corona crisis flattened the economy in 1H20. In the first quarter of this year, BlackRock announced the regular quarterly dividend and increased the payout by 13% to $ 4.13 per common share. With an annual payment of $ 16.52, this gives a return of 2.3%. The company has kept the dividend reliable for the past 12 years. Not wanting to miss an attractive opportunity, Dalio’s fund pulled the trigger with 19,917 shares, giving it a new position in BLK. The value of this new acquisition? More than $ 14 million. Analyst Brian Bedell writes on BLK for Deutsche Bank: “We consider the fourth quarter results to be very good with strong long-term net inflows for its products, which we expect to sustain despite a one-time outflow of $ low-priced shares. 55 billion. index assets expected in 1H21 that mgmt. said would have a minimal impact on the base fee income. In addition, total net inflows drove a 13% year-over-year increase in basic organic management expenses, a quarterly record, based on an annualized organic growth of assets under management of 7%. We expect organic growth in basic fees to outpace organic growth in assets under management in 2021, driven by a current mix of flows to higher rate products. To that end, Bedell assesses BLK a Buy and its $ 837 price target suggests the stock is ahead of ~ 18% gains. (To view Bedell’s track record, click here) The consensus of analysts tells a similar story. BLK has received 6 Buy ratings in the past three months, against 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 price target of $ 832.17 gives the stock 17% upside potential. (See BLK Stock Analysis on TipRanks) AbbVie, Inc. (ABBV) AbbVie is an important name in the pharmaceutical industry. The company is the maker of Humira, an anti-inflammatory drug used in the treatment of a wide variety of chronic diseases, including rheumatoid arthritis, Crohn’s disease and psoriasis. The company’s other immunology drugs, Skyrizi and Rinvoq, were approved by the FDA in 2019 as treatments for psoriasis and rheumatoid arthritis, respectively, and saw combined sales of $ 2.3 billion last year. AbbVie expects these drugs will “fill” the profit gap when the Humira patents expire in 2023, with sales of up to $ 15 billion by 2025. Humira is currently the main driver of AbbVie’s immunology portfolio, providing $ 19.8 billion of the $ 22.2 billion of the portfolio. billion in annual revenues, and a significant portion of the company’s total revenue. For the full year 2020, AbbVie saw $ 45.8 billion in revenues across all divisions, with adjusted diluted earnings per share of $ 10.56. In addition to its high-profile anti-inflammatory line, AbbVie also has a ‘stable’ long-established drug on the market. For example, the company owns Depakote, a widely used epilepsy drug. AbbVie also maintains an active research pipeline, 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 holding a reliable – and growing – dividend. In the most recent statement made this month for a payment due in May, AbbVie increased the dividend by 10% to $ 1.30 per common share. At $ 5.20 on an annual basis, this gives a return of 4.9%. Again, we look at stocks that reflect some of Dalio’s advice. Dalio’s company bought ABBV’s tractor in the fourth quarter and 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 ahead of time for the loss of US exclusivity for its best-selling product. “Between the growth trajectory of ABBV’s ex-Humira portfolio and a broad portfolio of catalysts for early, mid and late phase assets, it is difficult to find a biopharma company that is better positioned, even with their imminent LOE. ABBV is prepared for 2023 and has growth drivers to outperform the industry’s average top and bottom line growth in the period before (2021-2022) and after (2024-2028) 2023, ”said Porges. Porges gives ABBV an Outperform rating (i.e. Buy) and sets a price target of $ 140 indicating that there is room for a 33% year up. (To view Porges’ track record, click here) In total, there are 10 ratings on ABBV stock, and 9 of them are for sale – a margin that makes the analyst a strong buy by consensus assessment. The stock trades at $ 105.01 and has an average price target of $ 122.60. This suggests an increase of ~ 17% over the next 12 months. (See ABBV Stock Analysis on TipRanks) To find great ideas for stocks trading at attractive valuations, check out TipRanks ‘Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ insights on stocks. Disclaimer: The opinions expressed in this article are solely those of the recommended analysts. The content is provided for informational purposes only. It is very important to conduct your own analysis before making an investment.