The headlines have been full of the heavy losses the markets have taken this year and that we are in bear territory. But the true story of this year’s stock action isn’t so much the losses as the volatility. The large fluctuations in trading from day to day or week to week, overlaid by the downtrend, have caused more than their share of confusion among investors.
In times like these, when trends are conflicting and forecasts uncertain, investment greats can serve as a source of inspiration, namely billionaire Israel “Izzy” Englander.
Englander has been on the trading scene since 1977, founding his hedge fund Millennium Management in 1989 and since then has grown it into one of the giants of the market. His firm has over $54.5 billion in total assets under management, and with a personal net worth of nearly $11 billion, it’s no wonder Wall Street takes notice whenever Englander makes a move.
To take inspiration from Englander, we took a closer look at two stocks that Englander’s Millennium has been moving recently. When we used the TipRanks database to find out what the analyst community had to say, we learned that every ticker is backed by the analyst community with a consensus “Strong Buy” rating and massive upside potential.
Kezar Life Sciences (KZR)
First up is life sciences company Kezar for oncology and immunology. This company works on new treatments for autoimmune diseases and cancer and bases its research on protein activities – specifically protein secretion and protein breakdown. Kezar has a pipeline of multiple late-stage clinical trials of first-in-class small molecule drug candidates.
The two drug candidates are KZR-261 in the oncology pathway and KZR-616 in the autoimmune pathway. The latest company promotions and updates come from this last track. KZR-616 has been evaluated in Phase 2 studies for the treatment of lupus nephritis (LN) and dermatomyositis and polymyositis (DM/PM).
Kezar released data in early May that was disappointing on the DM/PM leg. In topline data, the company’s PRESIDIO study, a phase 2 study of 25 patients, showed significant overall improvement scores for patients who underwent treatment with KZR-616 (brand name zetomipzomib) – but also no significant differentiation from placebo.
That leaves the second phase 2 trial of the drug candidate as a big upcoming catalyst for Kezar. The MISSION study, a Phase 2 study of zetomipzomib in the treatment of LN, has already shown preliminary data that met the primary efficacy endpoint and the company is optimistic that the top-line data will be released before the end of this month are to continue to do so will meet expectations.
Kezar’s second drug candidate, KZR-261, is a protein secretion inhibitor being studied for the treatment of metastatic solid tumors. This is the subject of a phase 1 clinical study evaluating safety and tolerability as well as dose escalation and dose expansion.
And now we can understand Englander’s stance on the stock. The billionaire investor held just over 922,000 shares at the end of the first quarter — but as of this June 17, it reported total holdings of 3,026,628 shares. This was more than triple his previous disclosure and gives him a 5% stake in Kezar. At current values, Englander’s holdings in KZR are worth more than $17.4 million.
Analyst Maury Raycroft, covering Kezar for Jefferies, is excited about the LN data, writing that “LN is a very different disease entity than DM/PM,” pointing to several factors supporting continued optimism: “1) LN-TX window is longer at 24 weeks on tx (vs only 16 weeks in DM/PM phase II which may have been too short), 2) LN is less heterogeneous, 3) LN primary endpoint is objective UPCR (vs subjective TIS components), 4) Although co sees the same PD effect at 45 mg and 60 mg doses, the LN study uses a higher 60 mg dose.
“Although today’s failure is not ideal, we see the setup towards the isolated LN event as appealing.”
In anticipation of positive results, Raycroft has a Buy rating on KZR, and its $20 price target suggests an impressively high 240% upside potential for the stock in the coming year. (To see Raycroft’s track record, click here,
Overall, it looks like The Street agrees with Raycroft – all 4 of the most recent analyst ratings are positive, for a unanimous Strong Buy consensus rating. The stock currently trades at $5.87 and its average price target of $16.50 implies a 12-month upside potential of 182%. (See KZR Stock Prediction on TipRanks)
BioLife Solutions (BLFS)
Next up is BioLife Solutions, an interesting medical research company. BioLife provides supporting services and products that enable laboratory research in pharmacology. The company has a wide range of products in biopreservation, cryogenic storage, cold chain management and precision anhydrous thawing. Together, these products enable research laboratories to ship, store, transport and use the sensitive biological samples required in modern medical and pharmacological research.
Medical research is a growing field, especially in this COVID era – and BioLife Solutions has been one of the beneficiaries. After bottoming out in Q2 ’20, the company posted six consecutive quarters of rising revenue.
In its most recent quarterly report for 1Q22, BioLife reported $36.2 million in revenue, up 114% from 1Q21. In addition, the forecast had been for a 26-cent EPS loss; The actual result, a loss of 17 cents, was better than expected. However, the current EPS was a deeper loss than the 3 cents reported in 1Q21. As for the current stock situation, BLFS shares are down 60% so far this year.
Looking ahead, BioLife has confirmed its previously released guidance for full year revenues in the range of $159.5 million to $171 million. That would result in annual growth of 34% to 44%.
This is another stock that Englander has bought heavily into. He held 1,073,506 million shares at the end of the first quarter and has since more than doubled that number by purchasing an additional 1,092,838 shares through June 16. Englander’s total ownership of 2.166 million shares in BLFS is valued at more than $34 million – and he owns 5.1% of the company.
Lake Street analyst Thomas Flaten notes the current state of BioLife and is bullish on these stocks. He writes, “Although staging some recovery over the past few weeks, BLFS shares are still 34% lower than at the start of the quarter and have been dragged down in part by the overall market but also by internal issues. With 2024 sales guidance of $250 million (implying growth rates in excess of 25%), improved margins (30% AEBITDA in 2024) and a lower-risk exposure to a substantial macro, we believe BioLife Solutions deserves investor interest .”
To that end, Flaten has a Buy rating on BioLife stock, along with a $68 price target that shows room for a 356% upside over the next 12 months. (To see Flaten’s track record, click here,
Overall, this interesting life sciences company has received 8 Wall Street analyst ratings, with a 7-to-1 split in favor of “buy over hold”. Shares are trading for $14.92 and their average price target of $32.71 suggests ~119% upside from this level. (See BLFS Stock Prediction on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important that you do your own analysis before making any investment.
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