It’s simple to get vertigo, when markets get yanked round in a number of instructions directly. The loopy currents we’ve seen in current weeks have been a recipe for confusion – a bear was a bullish rally, inflation hit a 40+ yr peak after which pulled again, the Federal Reserve made among the most aggressive price hikes in its historical past earlier than sounding a dovish notice.
For the typical investor, charting a course via these waters is a frightening activity. It’s in time like this that some knowledgeable recommendation may present a clearer image. Hardly any on the Avenue come extra extremely regarded than billionaire Steve Cohen.
The legendary inventory picker has constructed Point72 into an enormous of the hedge fund trade, with over $26 billion in whole belongings underneath administration. Utilizing what’s referred to as a multi-strategy strategy which includes inventory market investments in addition to world investments in a number of asset lessons suddenly primarily based on macroeconomic traits, Cohen is taken into account top-of-the-line within the enterprise.
With this in thoughts, we’ve opened up the TipRanks database to get the inside track on two of Cohen’s current new positions. These are Purchase-rated shares – and maybe extra apparently, each are robust dividend payers, with annual yields exceeding 5%. We are able to flip to the Wall Avenue analysts to seek out out what else might need introduced these shares to Cohen’s consideration.
Highwoods Properties (HIW)
We’ll begin with an unsurprising member of the ‘high-yield dividend membership,’ Highwoods Properties. This firm is an actual property funding belief (REIT), primarily based in Raleigh, North Carolina, holds a portfolio of properties in one of the best enterprise districts (BBDs) of rising city areas throughout the sunbelt: Atlanta, Charlotte, Nashville, Orlando, Raleigh, Richmond, and Tampa. As well as, Highwoods additionally has properties in Pittsburgh, Pennsylvania. The corporate owns, develops, leases, and manages its properties, and boasts greater than 27.4 million sq. toes of usable house with a 91.1% occupancy.
These properties have generated persistently sound revenues for Highwoods. The corporate reported $203.8 million on the prime line in 2Q22, the newest reported, for a acquire of 9.8% year-over-year. That income line supported a web incomes of $50.5 million, or 48 cents per diluted share. Highwood held web actual property belongings price $4.9 billion on the finish of the quarter, together with money and liquid belongings of $25 million.
Earnings and belongings collectively held up the corporate’s dividend. Highwood declared, on the finish of July, a standard inventory dividend of fifty cents per share, for cost on September 13. This marks the fifth quarter in a row with the dividend at this stage, which annualizes to $2 even and provides an above-average yield of 5.6%. That yield is sort of triple the typical discovered amongst S&P-listed corporations, and is excessive sufficient to offer some safety from inflation.
All of this makes for an attention-grabbing inventory, at a time when defensive performs are gaining floor, and it’s clear that Cohen would agree. His agency opened its place in HIW by buying 103,061 share. This stake is now price $3.56 million.
What this all comes all the way down to is summed up by Baird analyst Dave Rodgers, who writes: “We anticipate HIW shares to ship outperformance towards an Underweight Workplace group given the corporate’s extra restricted publicity to tech-oriented enlargement tenants, strong visibility towards re-tenanting wants and a wholesome stability sheet. Leasing for 3Q22 is progressing effectively for the corporate, and its growth pipeline has restricted danger or, on the very least, bridges the supply hole previous our view of recession timing. Portfolio upgrades and strategic transactions ought to restrict higher FFO development, however HIW ought to present strong relative near-term risk-adjusted returns.”
Rodgers goes on to present HIW an Outperform (i.e. Purchase) score, together with a $43 value goal that suggests ~25% one-year upside potential. (To observe Rodgers’ observe document, click on right here)
Whereas Rodgers is overtly bullish, the Avenue typically takes a combined – although considerably constructive – view of this inventory. The ten current analyst opinions break up down the center, with 5 Buys and 5 Holds for a Average Purchase consensus score. The shares are buying and selling for $34.53 and their $38.78 common value goal suggests about 10% upside the approaching yr. (See HIW inventory forecast on TipRanks)
JOYY (YY)
For the second Cohen decide, we’ll flip to the Chinese language digital market. A famously complicated language, and an authoritarian authorities, have mixed to maintain China’s digital world remoted from the West – however the nation has an city inhabitants of 800 million, a complete inhabitants of 1.4 billion, and a ‘digital’ inhabitants of related web customers of greater than 1 billion. By scale alongside, the Chinese language web scene is price a re-examination from buyers.
Inside that web scene, JOYY is a serious social media firm, working a number of manufacturers that act to attach customers via video codecs. The corporate’s manufacturers embody the live-streaming Bigo Reside, the short-form video supplier Likee, and the multiplayer social sport networking platform Hago.
JOYY will report its 2Q22 numbers on the finish of this month, however we are able to get an thought of the corporate’s traits by trying on the 1Q22 numbers. On the prime line, JOYY introduced in $623.8 million, down 3% year-over-year. Nonetheless, web earnings, on a non-GAAP foundation, got here to $20.9 million, an enormous turnaround from the $24.1 million web loss reported within the prior yr’s Q1. This turnaround was attributed to enhancements in gross margin, extra disciplined advertising and marketing efforts, and an general enchancment in working effectivity.
Together with improved working efficiencies, JOYY has accrued a money ‘warfare chest’ totaling greater than $4.47 billion. The corporate can be cash-positive in operations, producing $592 million in money from ops throughout Q1.
Having turned worthwhile and accrued loads of money, JOYY now has a strong base for its dividend cost. The corporate pays out 51 cents per frequent share, with final cost despatched out on July 6. The annualized cost of $2.04 provides a powerful yield of seven.25%, which is effectively over 3x the typical dividend yield.
Steve Cohen has confirmed that he’s impressed by the attributes of JOYY, and he’s achieved so with a big purchase. His agency picked up 198,000 shares of YY, establishing an preliminary place that’s now price $5.3 million.
5-star analyst Fawne Jiang, of Benchmark, additionally counts herself as a fan. Jiang sees an organization with a transparent attraction for worth buyers. The analyst says that YY is a ‘robust money play,’ and writes, “YY at present has a money stability of $43 per share and will increase its money stability to ~$70 money per share upon the completion of the YY Reside sale (pending on regulatory approval). The corporate has issued combination share repurchase plans of $1.2B in 2021 (with $316M repurchase executed in 1Q22). YY pays quarterly dividends with an annual dividend yield of 5%. The group has turned worthwhile in FY21, which successfully lowered issues on potential money burn.”
That’s a bullish posture, and Jiang’s score on the inventory is a Purchase. Jiang backs that with a $62 value goal indicating confidence in a sturdy one-year upside of 131%. (To observe Jiang’s observe document, click on right here)
Total, JOYY has 4 current analyst opinions, together with 3 Buys and 1 Maintain, making its analyst consensus view a Sturdy Purchase. The $57.67 common value goal suggests the inventory has ~115% upside potential from its share value of $26.81. (See JOYY inventory forecast on TipRanks)
To search out good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched device that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is rather vital to do your personal evaluation earlier than making any funding.
