Wall Street has known its share of legends, but few of them have made as big a splash as "the Man Who Broke the Bank of England." That nickname belongs to George Soros who earned the tag after famously betting against the British Pound in 1992; following the Black Wednesday crash, the hedge fund manager pocketed a $1 billion in a single day. This is the stuff that Wall Street legends are made of.
By then Soros was already incredibly successful and in the midst of steering his Quantum Fund to decades-long average annual returns of 30%.
Today, Soros remains the chair of Soros Fund Management and is thought to be worth over $8 billion, a figure which would have been far greater but for the billionaire's extensive philanthropic work.
So, when Soros takes out new positions for his stock portfolio, it is only natural for investors to sit up and take notice. With this in mind, we decided to take a look at three stocks his fund has recently loaded up on. Soros is not the only one showing confidence in these names; according to the TipRanks database, Wall Street's analysts rate all three as Strong Buys and see plenty of upside on the horizon too.
EQT Corporation (EQT)
We'll start with the largest natural gas producer in the US. EQT is an $8 billion industry giant, operating in the gas-rich Appalachian states of Pennsylvania, West Virginia, and Ohio. With 1 million acres of land holdings in the Marcellus and Utica shale deposits, and 19 trillion cubic feet of proven natural gas reserves, the company is well-positioned to gain from the current regime of rising gas prices, even as the Biden Administration pushes an anti-fossil fuel strategy.
One clear sign of EQT's strong position: the stock is up 65% year-to-date, even after some late-summer volatility. In the most recent quarterly report, for Q3, the company's revenue came in at $1.79 billion, reversing the year-ago quarter's $255 million revenue loss, while the EPS of 12 cents was up from a year-ago loss of 15 cents per share. Looking forward, management has boosted this year's guidance on free cash flow upward by $200 million.
From Soros' position, it's clear that he sees profit potential in natural gas. His fund pulled the trigger on 534,475 shares, giving it a new position in EQT. At current prices these shares are now worth over $11.4 million.
Soros isn't the only one giving this resource stock some love. Wall Street analyst Vincent Lovaglio, writing from Mizuho Securities, points out several strong points from 3Q21.
"Gas realizations were better than expected, low end of full year capex guidance is down slightly, full year operating cash flow guide is higher on the commodity rally and in line with our full-year forecast, and the company optimized firm-transport agreements expected to lower unit gathering while improving realizations."
In addition, Lovaglio isn't shy in setting forth his opinion that the company will start returning cash to shareholders, sooner rather than later, believing EQT is "positioned to announce a cash return framework early next year."
In line with these comments, Lovaglio rates EQT stock a Buy and his $35 price target points toward 68% upside in the next 12 months. (To watch Lovaglio's track record, click here)
Overall, the Strong Buy consensus rating on this stock is supported by 11 recent reviews, which include 9 Buys against just 2 Holds. The shares are selling for $21.35 and the $29.64 average price target suggests an upside of 42%. (See EQT stock analysis on TipRanks)
The next stock we'll look at is Fisker, an electric vehicle (EV) maker based in LA, California. Fisker is preparing to jump full-on into the consumer automotive segment, and unveiled its Ocean fully electric SUV earlier this month at the 2021 Los Angeles Auto Show. The company has already been taking pre-orders on the vehicle; with the unveiling, Fisker is now putting its money where its mouth is. The Ocean, with - among other features - a solar-panel roof capable of generating battery charging power, is scheduled to start its regular production run in November of next year.
In recent weeks, Fisker has met some other important milestones for investors to consider. First, on November 2, the company announced an agreement with the European battery maker Contemporary Amperex Technology to receive two separate battery supply options for the Ocean, with a total of 5 gigawatt-hours annual battery capacity over the years 2023 to 2025. And one day later, Fisker noted that its prototype Body Shop at the Austria Fisker Ocean assembly plant, is now fully operational and that production has begun on the Ocean's prototype run, allowing the vehicle to enter the next phase of testing.
Constant progress toward a deliverable product is a clear positive marker for a pre-production auto maker, and Soros clearly agrees; he picked up 317,300 shares of Fisker, opening his position in the company with a holding now worth $6.26 million.
Giving Fisker an Outperform (i.e. Buy) rating, with a $32 target price indicating room for ~57% one-year upside, Credit Suisse analyst Dan Levy is also clearly bullish, and he bases his conclusion on the recent unveil.
Backing his stance, Levy writes, "FSR's unveil of the production version of the Ocean at the LA Auto Show last week reinforces our bull thesis on FSR - with EV uptake sharply inflecting and the market lacking sufficient model options, FSR offers a compelling value proposition - sleek product at a high-volume price point, and with a de-risked path to market."
Going on, Levy lays out the key point: "Reaching start-of-production for Ocean next year, even if the vehicle isn't profitable initially, may be enough to drive significant upside for the stock." (To watch Levy's track record click here)
Wall Street appears to be in broad agreement with Levy, as FSR shares maintain a Strong Buy rating from the analyst consensus. There have been 8 recent reviews, including 6 Buys and 2 Holds. Meanwhile, the stock's $26 average implies 27% upside potential from the $20.44 trading price. (See FSR stock analysis on TipRanks)
SoFi Technologies (SOFI)
Last on our list is SoFi, short for Social Finance, a San Francisco-based personal finance company. The company uses social media modes to connect its members with loan funding sources. SoFi offers a full range of loan products, from student loans to home financing, and maintains a solid commitment to its 'no fee' policy; the only cost to borrowers is the interest on the loan. And with SoFi's non-traditional underwriting approach, it is able to offer borrowers lower rates than are available with banks.
Founded 10 years ago, SoFi only entered the public trading markets this year. Like many firms in recent years, the company took advantage of the rising market environment to enter a SPAC transaction, merging with Social Capital Hedosophia V in the early summer and putting the SOFI ticker on the NASDAQ on June 1.
Earlier this month, SoFi published its 3Q21 financial data, showing strong growth, especially in membership numbers. The company recorded year-over-year member growth of 96%, reaching a total of 2.9 million. Of that growth, 377,000 new members were added in Q3, making the quarter the company's second-best ever for member increase. For the quarter, adjusted net revenue came in at $277 million, beating the company's previously published guidance high end of $255 million by 9%. Management is predicting further acceleration of revenue growth in Q4, and is guiding toward $272 million to $282 million in net revenue. Achieving this would bring 49% to 55% yoy revenue growth. For the full year, the company expects revenues in the range of $1.002 billion to $1.012 billion.
Also looking ahead, the company has applied for a national bank charter, a move that will take it into the traditional banking industry. The move would bring the lender under the auspices of the Federal Deposit Insurance Corporation, a plus for account holders. SoFi management has indicated that its charter application is in line with regulatory expectations.
A finance company with sound underwriting and bright prospects, working in an environment flush with cash, is sure to attract investors - and Soros bought in heavily. He opened his position at 177,500 shares, valued at $3.22 million given current prices.
Wall Street, like Soros, sees plenty to appreciate here. Rosenblatt analyst Sean Horgan says, "We continue to be buyers on SOFI here." His Buy rating is backed by a $30 price target indicating his confidence in a one-year upside of 65%. (To watch Horgan's track record, click here)
Looking at the company's latest earnings, the analyst highlights several positive developments: "1) Digital influencer partnerships led to 400mn impressions and 775k engagements with SOFI content, and SOFI's TikTok campaign drove more than 8bn views and more than 1mn uses of SOFI's branded hashtag #SoFiMoneyMoves; 2) 18% of member growth (up from 3% in 2Q) was driven by the successful launch of SOFI's new and enhanced referral programs, including 'Refer the App'; 3) 73% of cross buying was driven by money/invest members (85% including relay); 4) Galileo accounts totaled 88.9mn (80%y/y) vs. consensus of 85.1mn; 5) the lending segment adj. revenue hit a record of $215mn,which was driven by growth in SOFI's personal loan business originations (+167% y/y to$1.6bn); 6) total members grew 96% y/y to 2.9mn in 3Q21."
Once again, we're looking at a Strong Buy stock, with the Buys outweighing the Holds by a 5 to 1 margin. The shares have a current trading price of $18.11 and an average price target of $26.33, indicative of a ~46% one-year upside. (See SOFI stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured 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.