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The headlines have been busy recently about the heavy losses markets have taken this year, and that we’re in bear territory. But the real story of this year’s stock action isn’t so much the losses as it is the volatility. The wide swings in trading from day to day or week to week, overlaid on the downward trend, have generated more than their share of investor confusion.
In times like these, when the trends are conflicting and the forecasts uncertain, the investing greats can serve as a source of inspiration, namely billionaire Israel “Izzy” Englander.
Englander has been working on the trading scene since 1977, started his hedge fund, Millennium Management, in 1989, and since then has built it up into one of the market’s giants. His firm holds over $54.5 billion in total assets under management, and with his personal net worth clocking in at near $11 billion, it’s no wonder Wall Street pays attention when Englander makes a move.
Turning to Englander for inspiration, we took a closer look at two stocks Englander's Millennium made moves on recently. Using TipRanks’ database to find out what the analyst community has to say, we learned that each ticker boasts a “Strong Buy” consensus rating from the analyst community and massive upside potential.
Kezar Life Sciences (KZR)
First up is oncology and immunology bioscience firm Kezar. This company is working on new treatments for autoimmune diseases and cancers, basing its research on protein activities – specifically, protein secretion and protein degradation. Kezar has a pipeline featuring several late-stage clinical trials of first-in-class small molecule drug candidates.
The two drug candidates are KZR-261, on the oncology track, and KZR-616 on the autoimmune track. The company’s most recent action and updates have come from that latter track. KZR-616 has been undergoing Phase 2 trials in the treatment of lupus nephritis (LN) and in dermatomyositis and polymyositis (DM/PM).
Kezar released data in early May that was disappointing on the DM/PM track. In topline data, the company’s PRESIDIO trial, a Phase 2 study of 25 patients, showed meaningful total improvement scores for patients undergoing treatment with KZR-616 (branded as zetomipzomib) – but also no significant differentiation from placebo.
That leaves the drug candidate’s second Phase 2 trial as big upcoming catalyst for Kezar. The MISSION trial, a Phase 2 study of zetomipzomib in the treatment of LN, has already shown interim data that achieved the primary efficacy endpoint and the company is optimistic that the topline data, scheduled for release before the end of this month, will continue to meet expectations.
Kezar’s second drug candidate, KZR-261, is a protein secretion inhibitor under investigation as a treatment for metastatic solid tumors. This is the subject of a Phase 1 clinical study, which is looking at safety and tolerability, as well as dose escalation and dose expansion.
And now we can understand Englander’s position on the stock. The billionaire investor held just over 922K shares at the end of Q1 – but this past June 17, he reported overall 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.
Covering Kezar for Jefferies, analyst Maury Raycroft looks forward to the LN data, writing that "LN is a very different disease setting vs DM/PM," and pointing out several factors for continued optimism: “1) LN tx window is longer w/ 24 wks on tx (vs only 16 wks in the DM/PM ph.II, which may have been too short), 2) LN is less heterogeneous, 3) LN primary endpoint is objective UPCR (vs subjective TIS components), 4) though co sees same PD effect at 45mg and 60mg doses, the LN study is using a higher 60mg dose.
“Though the failure today is not ideal, we view the setup heading into the isolated LN event as appealing.”
In anticipation of positive results, Raycroft puts a Buy rating on KZR shares, and his $20 price target suggests an impressively high 240% upside to the stock in the coming year. (To watch Raycroft’s track record, click here)
Overall, it would seem that the Street agrees with Raycroft – all 4 of the recent analyst reviews are positive, for a unanimous Strong Buy consensus rating. The stock is currently trading for $5.87 and its $16.50 average price target implies a 12-month upside potential of 182%. (See KZR stock forecast on TipRanks)
BioLife Solutions (BLFS)
Next up is BioLife Solutions, an interesting firm in the medical research field. BioLife provides supporting services and products that make lab research possible in pharmacology. The company features a wide-ranging line of products in biopreservation, cryogenic storage, cold chain management, and water-free precision thawing. Together, these products allow research labs to ship, store, transport, and use the delicate biological samples needed 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 2Q20, the company saw six quarters in a row of sequentially rising revenues.
In its most recent quarterly report, for 1Q22, BioLife showed $36.2 million at the top line, up 114% from 1Q21. Furthermore, the forecast had been for a 26-cent EPS loss; the actual result, a 17-cent loss, was better than expected. The current EPS, however, was a deeper loss than the 3-cents reported in 1Q21. As to the current stock situation, BLFS shares are down 60% so far this year.
Looking forward, BioLife has reaffirmed its previously published guidance for full-year revenue in the range of $159.5 million to $171 million. That would translate into year-to-year growth of 34% to 44%.
This is another stock that Englander bought into heavily. He held 1,073,506 million shares at the end of Q1, and has since more than doubled that, buying up another 1,092,838 shares as of June 16. Englander’s total holding, 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 BioLife’s current state, and comes down with a bullish stance on these shares, writing: “While having recovered somewhat in recent weeks, BLFS shares are still 34% lower than at the beginning of the quarter, pulled down in part due to the overall market but also internal issues. With a $250M revenue guide for 2024 (implying 25%+ growth rates), improving margins (30% AEBITDA in 2024), and de-risked exposure to a substantial macro, we believe BioLife Solutions merits investor interest."
To this end, Flaten rates BioLife shares a Buy, along with a $68 price target that indicates room for 356% upside in the next 12 months. (To watch Flaten’s track record, click here)
Overall, this interesting bioscience firm has picked up 8 Wall Street analyst reviews, with break down 7 to 1 in favor of Buys over Holds. The shares are trading for $14.92 and their $32.71 average price target suggests an upside of ~119% from that level. (See BLFS stock forecast 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.