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The market’s legendary investors built their names, and their fortunes, on success, the paths they followed were as varied and interesting as in any human endeavor. And one of the best such stories for market success is that of Ken Griffin, whose firm Citadel manages approximately $39 billion in total assets.
Griffin founded Citadel in 1990, and last year the firm’s funds brought in an average return of 24%. Griffin himself has seen his personal net worth grow to $16 billion. It’s not a bad place to be, for a guy who got his start in the trading world from his Harvard dorm room, armed with a phone, a fax, and an early desktop computer.
Taking this into consideration, we wanted to get all the details on three stocks the billionaire’s fund snapped up recently. Running the tickers through TipRanks’ database, we found out that the analysts are also fans, with each name scoring a “Strong Buy” consensus rating. Not to mention each ticker offers solid upside potential.
Rocket Lab USA (RKLB)
The first of Griffin's new positions is Rocket Lab, a space launch company offering customers a range of capabilities. Rocket Lab currently has two active spacecraft, the Electron small orbital launch vehicle and the Photon satellite platform. The company is developing a larger launch vehicle, Neutron, which will increase the payload capacity to 8 tons. Rocket Lab has sent up a total of 107 satellites, for a wide range of purposes, from national security to space debris clearance to scientific research to communications.
Space travel is a difficult enterprise, with a high failure rate, but Rocket has had 19 successful missions of its Electron vehicle out of 22 launch attempts, for an 86% success rate.
The company entered the public markets through a SPAC transaction earlier this year. The merger, with Vector Acquisition Corporation, was approved by the SPAC’s shareholders on August 20 and the combination closed on August 25. Rocket Lab realized $777 million in new capital from the SPAC transaction, and has a current market cap of $5.85 billion.
In addition to completing its SPAC move in the third quarter, Rocket Lab also reported revenue of $5.3 million. Even better, for the company’s prospects, the order backlog – work contracted but not yet completed and paid for – increased from $141 million at the end of Q2 to $183 at the end of Q3, a gain of 29%. Rocket Lab finished the third quarter with $792.7 million in cash on hand, reflecting the new capital from the completed SPAC transaction.
Private space launch is a growth niche, and it caught Griffin’s eye. His firm bought in to this new stock during Q3, to the tune of 1,727,899 shares. At the current valuation, these are worth over $22.5 million.
The billionaire isn’t the only RKLB fan. Canaccord analyst Austin Moeller rates the stock a Buy, and his $28 price target suggests a substantial upside of 115% for the year ahead. (To watch Moeller’s track record, click here)
Backing his stance, Moeller writes: “We believe that Rocket Lab’s substantial first-mover advantage in the small launch sector, robust customer base and overall launch pedigree (the second most successful commercial launch company to-date) will allow RKLB share to enjoy a significant premium over industry peers."
"Only two other commercial rocket companies (SpaceX and Virgin Orbit) have successfully reached orbit to-date. We also believe that Rocket Lab’s dedicated small launch market niche has already established segmentation relative to competitors like SpaceX. We believe that the company’s competitive advantage over new market entrants and production scale justify significant upside in the stock price," the analyst added.
What does the rest of the Street think? The 4 to 1 breakdown in the analyst reviews, favoring Buys over Hold, clearly shows that Wall Street is in broad agreement: this is a stock to Buy. The shares are selling for $13 and the average target of $21.20 implies a one-year upside of ~63%. (See RKLB stock forecast on TipRanks)
F45 Training Holdings (FXLV)
Next up is a franchised fitness company operating in 65 countries around the world through more than 3,000 franchised operations. F45 has over 1,600 studios offering 45-minute fitness workouts. The company uses a digital tech platform to both standardize and diversify workout routines, and provide customers with more than 3,900 unique and functional training movements.
Like Rocket Lab above, this is a company new to the public markets. F45 started trading on July 15 in an IPO that featured 18.75 million new shares of public stock. The shares were sold at $16 each, and the company raised approximately $300 million gross proceeds.
As for Ken Griffin, he picked up 1,335,812 shares in this stock during Q3, a clear vote of confidence. Griffin’s holding has a current value of ~$16 million.
But not everything in the garden is rosy. In the second week of November, the company released its 3Q21 results – and the results spooked investors. F45 shares fell some 19% after the release due to revenue shortfall and lingering shipping/COVID risks.
The company’s Q3 results got the attention of Jefferies' 5-star analyst Randal Konik, while the fall in share price really sparked his interest. Konik sees an opportunity here, and writes of the company: “We believe shares of FXLV are de-risked in the near term due to recent weakness post-IPO, which presents a compelling entry point. Additionally, we believe the company's long-term growth prospects are attractive as the business has experienced a strong recovery from pandemic lows in 2020... F45 is one of the fastest growing fitness franchisors in the U.S. (by number of franchises sold) with contractual, recurring revenue and a strong and growing global presence.”
To this end, Konik rates FXLV a Buy, and his $23 price target suggests it has room to run ~90% in 2022. (To watch Konik’s track record, click here)
Overall, this fitness company has a unanimous Strong Buy consensus rating from the Wall Street reviewers, with 3 positive reviews on record. The average price target of $19.67 implies ~63% upside from the share price of $11.68. (See FXLV stock forecast on TipRanks)
Jasper Therapeutics (JSPR)
The last Griffin buy is a biotech company. Jasper Therapeutic is a clinical-stage researcher working on hematopoietic stem cell (HSC) therapies. These are the stem cells that give rise to mature human blood cells. Transplants of these stem cells are used to treat both immune system disorders and various cancers.
Jasper has one lead product, JSP191, a novel compound designed to assist and facilitate HSC transplant treatments. The drug candidate is a ‘targeted, humanized monoclonal antibody,’ under development as a clearing and conditioning agent for use prior to HSC transplant. JSP191 causes cell death in immature HSCs, leaving an open space in the bone marrow where transplanted stem cells can engraft and grow. JSP191 is designed to overcome limitations in current conditioning therapy, by acting as a non-toxic clearing agent, and removing one need for more dangerous chemotherapy.
Preclinical studies showed safe use of JSP191 in animal transplant models. The drug candidate is currently in two early stage human clinical trials. A Phase 1b trial for SCID (Severe combined immunodeficiency) is evaluating JSP191 as a sole conditioning agent. SCID is usually only treatable through HSC transplantation. A second trial, also at Phase 1b, is testing JSP191 in a combined therapy with another clearing agent, for use in the treatment of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS).
Jasper recently reported that the AML/MSD study is enrolling patients in expansion cohorts, and top-line interim data is expected in the first quarter of next year. And this week, the company announced that data on JSP191, showing its long-term benefits as a monotreatment clearing agent in the SCID study, will be presented at the 2021 American Society of Hematology (ASH) Annual Meeting, on December 12.
This is another company that has jumped on the SPAC bandwagon. Jasper merged with Amplitude Healthcare Acquisition Corporation, completing the transaction on September 24 of this year. The combination brought $100 million in gross proceeds to the biopharma, giving the company sufficient capital to operate through the middle of 2023.
Ken Griffin must really like this newly public stock. His firm bought 3,005,035 shares, taking a stake that’s now worth $24.3 million.
Wall Street, like Griffin, sees plenty to appreciate here. Credit Suisse, Judah Frommer writes: “We see promising preliminary safety and efficacy data for JSP191 – a reduced-intensity conditioning regimen for patients undergoing hematopoietic cell transplantation (HCT) – as supportive of a ~$500M peak sales opportunity in acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS), underscored by a broadening addressable patient population. While initial severe combined immunodeficiency (SCID) results are encouraging, SCID’s ultra-orphan status likely limits the commercial opportunity but could de-risk other indications.”
"We see the potential for JSPR to emerge as an attractive M&A candidate if there is further de-risking of the pipeline assets. However, in the near term, we expect interest to be more limited as potential acquirers await clinical data for the various programs," the analyst added.
Frommer’s comments back his Outperform (i.e. Buy) rating, and his $15 price target indicates a potential for 86% share growth in the next 12 months. (To watch Frommer’s track record, click here)
All in all, Jasper shares get a unanimous thumbs up from the analyst consensus, with 4 recent Buy reviews adding up to a Strong Buy rating. The stock is priced at $8.06, while the $18.33 average price target indicates room for an impressive 127% growth on the upside. (See JSPR 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.