Billionaire Steve Cohen Goes Big on These 2 “Strong Buy” Stocks


2022 has undoubtedly been a rough one for investors. Even accounting for the recent gains, all the major indexes are still down for the year and the backdrop of economic uncertainty still hovers menacingly.

Such an environment makes it difficult to find the stocks which are primed to charge ahead, but one way to sort the wheat from the chaff is to follow in the footsteps of legendary stock pickers.

And few are as well-versed in the investing game as billionaire Steve Cohen. Famous for his high-risk, high-reward trading style, the hedge fund manager’s Point72 firm boasts $25 billion of assets under management, with Cohen’s net worth estimated to be around $16 billion.

So, when Cohen makes some moves, it’s only natural for investors to pay attention. Recently, Cohen has been loading up on two names, and we’ve delved into the TipRanks database to get the lowdown on these tickers. Turns out it’s not only Cohen who thinks these stocks are worth a punt. According to the analyst consensus, both are rated as Strong Buys, too. So, let’s see what makes these names appealing investment choices right now.

Exact Sciences (EXAS)

The first Cohen’s pick we’re looking at is Exact Sciences, a molecular diagnostics specialist focused on cancer prevention, with its tools helping to detect cancers while still in the early stages.

The company’s initial product was the colon cancer test, Cologuard, launched in 2014 as the first stool DNA test for colorectal cancer. Initially focused on the early identification and prevention of colorectal cancer, Exact Sciences has since expanded its product line to include additional oncological screening and precision testing for many forms of cancer.

The company’s latest quarterly report was a beat-and-raise affair. Exact delivered revenue of $523.07 million, amounting to a 15% year-over-year increase while beating the consensus estimate by $19.95 million. Likewise, on the bottom-line, EPS hit -$0.84, bettering the Street’s forecast for -$1.07. And for the outlook, on account of the quarter’s solid beat, the company raised its full year 2022 revenue guidance from $1.980-2.022 billion to $2.025-2.042 billion.

It’s no wonder, then, that an investor like Steve Cohen would take an interest in a company like Exact Sciences. In Q3, Cohen’s Point72 made a significant buy in EXAS shares, totaling 2.43 million shares, which at the current share price are now worth over $104 million.

Canaccord analyst Kyle Mikson also sees plenty of reason for an upbeat outlook here. He writes, “Regardless of the path that the colorectal cancer screening market takes over the next several years, we remain bullish that Exact’s Cologuard business should be a consistent solid growth asset over time. We are also highly enthusiastic about Exact’s long-term growth potential given its many pipeline assets, progress toward achieving profitability (without pursuing dilutive options) and performance. We believe the company is on track to execute on its core long-term growth strategy.”

Accordingly, Mikson rates EXAS shares a Buy, backed by a $70 price target. There’s plenty of upside – 63% to be exact – should the target be met over the next 12 months. (To watch Mikson’s track record, click here)

Overall, 12 analysts have offered their views on Exact and these break down into 9 Buys and 3 Holds, providing the stock with a Strong Buy consensus rating. At 57.67, the average target implies shares will deliver returns of ~35% over the coming months. (See EXAS stock forecast on TipRanks)

Horizon Therapeutics (HZNP)

The next Cohen-endorsed name is Horizon Therapeutics, a biopharmaceutical company focused on bringing to market medications for rare, autoimmune and severe inflammatory diseases. Horizon has a deep and varied drug portfolio which includes thyroid eye disease (TED) therapy Tepezza, gout medication Krystexxa, and urea cycle disorder treatment Ravicti, amongst others.

All contribute to the revenue haul with Tepezza leading the way. Although in Q3, the drug’s sales declined by 20% year-over-year to $491 million, the figure amounted to a 2% sequential increase and allayed fears of a bigger pullback. In fact, while total revenue fell by 10% from the same period a year ago to $925.4 million, the figure beat the Street’s forecast by $37.76 million. There was also a beat on the bottom line, with adj. EPS of $1.25 coming in well ahead of the $1.01 expected on Wall Street.

Even better, the company also delivered with its outlook; the full-year sales guide was increased from $3.59 billion to $3.61 billion (consensus had $3.56 billion).

Apart from its product portfolio, the company has a bulging pipeline which got a real boost from last year’s acquisition of Viela Bio. The $3 billion deal helped the company not only get its hands on Viela’s lead candidate Uplizna, which has been approved to treat neuromyelitis optica spectrum disorder (“NMOSD”) in the US, but also strengthened the pipeline with three assets indicated to treat autoimmune diseases such as systemic lupus erythematosus (SLE), sjögren’s syndrome and rheumatoid arthritis.

Cohen evidently thinks the company is making all the right moves. In Q3, he opened a new position and bought 2,094,400 shares. These are now worth over $157 million.

Looking ahead, Wells Fargo analyst Derek Archila points out that next year has plenty on tap: “We think 2023 will be a big year for HZNP’s pipeline, which we believe is underappreciated and should generate upside for shares. There are multiple clinical catalysts that we think could help HZNP shares re-rate and get investors to assign more terminal value that is not in the stock at these levels.”

Expounding on the above, Archila added, “Tepezza’s low CAS/chronic TED trial will read out in 2Q23, which is important to expanding its use in a much larger set of TED pts than high CAS/active. Beyond this, we’re most interested in daxdilimab’s SLE Ph2 trial in 2H23, which is de-risked by BIIB059 and its Ph2a trial in alopecia areata in 2023. We think this could be a ‘pipeline-in-a-product’ given there are many autoimmune conditions where Type I IFN is implicated. Also, data from dazodalibep in Sjogren from several populations will be reported in the 1H23.”

Given all of the above, Archila has high hopes. Along with an Overweight (i.e., Buy) rating, he set a $118 price target on the stock. This target puts the upside potential at 57%. (To watch Archila’s track record, click here)

Overall, most of Archila’s colleagues back his bullish stance. Based on 9 Buys vs. 2 Holds, the analyst consensus rates the stock a Strong Buy. The forecast calls for one-year gains of ~30%, given the average target stands at $97.45. (See HZNP stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. 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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