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Is there a right way to invest? Not really. Each person has their own individual style, but what matters in the end is the results. This is especially true in the realm of investing, where even the most successful stock pickers on Wall Street use different strategies to achieve their goals. And what are those goals? Big yields of course.
Take, for example, billionaires Steve Cohen and Ken Griffin. Both have had incredible careers, but each one’s route to wealth has been different. Griffin, who manages the Citadel hedge fund, adheres to quantitative investment methods, while Cohen, who runs asset management firm Point72, is known for his high-risk, high-reward strategy.
That doesn’t mean their stock picks never cross. Some specific stocks are even part of each’s respective portfolios. And when two investing gurus hold the same names in high esteem, it’s only natural for investors to get curious about why they’re both investing.
With this in mind, we used TipRanks’ database to find out if two stocks the billionaires recently added to their funds are attractive plays. According to the platform, the analyst community believes so, with both picks earning “Strong Buy” consensus ratings. Let’s see the details.
Humana Inc. (HUMMING)
Uncertain times make the healthcare segment an ideal destination, as the industry is seen as one that touts defensive qualities and can withstand tough macroeconomic developments. So it’s not too surprising that both Cohen and Griffin have invested in Humana, an American healthcare giant and a leading provider of health insurance and related services.
The Louisville, Kentucky-based company is one of the largest managed healthcare organizations in the US, offering a wide variety of health insurance products, including individual and group plans, Medicare Advantage, and prescription drugs. Humana serves millions of customers and has a market capitalization of over $64 billion.
Such a value proposition enabled the company to enter a strong Q1 report. Revenue increased 11.6% year over year to $26.74 billion, which was $340 million better than expected. Likewise on the bottom line, adj. Earnings per share of $9.38 beat the $9.20 analysts expected. Humana also reaffirmed its target for individual Medicare Advantage (MA) member growth by 2023 of no fewer than 775,000, representing a 17% increase compared to the 2022 end of membership, while growth of the sector.
As for the bigwigs’ involvement, in the first quarter, Griffin increased his HUM stake by a whopping 2,216% by purchasing 973,754 shares. In total, he now owns 1,017,699 shares, currently worth $522.4 million. During the same period, Cohen opened a new position by acquiring 189,079 shares of HUM, which currently has a market value of $97 million.
Morgan Stanley’s Michael Ha reflects the confidence of these investor heavyweights and highlights the company’s growth expectations as key to his investment thesis.
“Amid recent mounting investor concerns about MA growth in 2024, we welcome mgmt’s commentary,” Ha said. “Management believes that Humana can grow at or above Individual Medicare Advantage HSD growth in 2024. We believe this and continue to view Humana as the company with the strongest multi-year earnings growth in Managed Care.”
These comments support Ha’s Overweight (ie Buy) rating, while his $637 price target suggests the stock will post 24% growth over 12 months. (To view Ha’s track record, click here)
The rest of the Straits agree almost unanimously. Aside from one witch sitter, all 15 other recent analyst reviews are positive, making the consensus here a strong buy. Assuming the average target of $609.33, the stock will change hands a year from now for a premium of ~19%. (To see HUM inventory forecast)
Side Properties (CUZ)
Another way to hedge against macro uncertainty is to invest in Real Estate Investment Trusts (REITs), a defensive segment known for juicy dividends. The next Cohen/Griffin-backed name to take the spotlight here is Cousins Properties.
With a history dating back to 1958, this REIT has established itself as a leading owner, operator and developer of high-quality office properties. Cousins Properties primarily focuses on the acquisition, development and management of Class A office buildings in prominent markets in the Sunbelt region. The firm’s portfolio includes a broad range of assets, including corporate headquarters, urban office towers and suburban office parks.
While some have raised the alarm about the precarious state of the US commercial real estate market, that didn’t stop Cousins from making a strong statement in the most recently reported quarter — for 1Q23. Revenue reached $202.73 million, up 8.5% year-over-year, beating forecasters’ forecast by $7.64 million. At the other end of the scale, the company turned in an FFO of $0.65, beating the consensus estimate of $0.63.
Cousins also pays a regular dividend. The current payout is $0.32 and yields an inflation-beating 6.46%.
This should all appeal to Cohen and Griffin. As for their involvement, Cohen pulled the trigger and bought 1,071,615 shares worth more than $23.1 million at the current share price, while Griffin took an even bigger position by purchasing 3,257,081 shares. This move increased the total size of his holding to 3,295,280 shares, valued at a whopping $71 million.
This stock has also impressed Baird analyst Wes Golladay, who believes CUZ “appears well positioned to maneuver the current macroeconomic headwinds facing the industry.”
“CUZ’s late-stage leasing pipeline doubled in the quarter to 700 ksf, including some activity at the Neuhoff development in Nashville,” Golladay wrote after scanning the Q1 printout. “This pipeline, along with ksf 480 in signed deals to start this year, will help drive occupancy rates throughout the year. In addition, CUZ’s balance sheet provides the flexibility for the company to take advantage of price dislocations in the market and add to its trophy Sun Belt portfolio.”
To that end, Golladay rates CUZ stock as an Outperform (i.e. Buy) backed by a $27 price target. Should the figure be met, investors will be sitting on a 25% return a year from now. (To view Thillman’s track record, click here)
Overall, CUZ has accumulated 7 analyst ratings over the past few months, including 6 Buys and 1 Hold for a Strong Buy consensus rating. The stock’s $25.29 average price target suggests it’s up 17% from its current trading price of $21.56. (To see CUZ stock forecast)
To find great ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that unites all of TipRanks’ stock insights.
Disclaimer: The opinions expressed in this article are solely those of the recommended analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.
