Billionaire Ken Fisher pours money into these 2 ‘big buy’ stocks

In the world of stock market legends, Ken Fisher stands out. The legendary investor founded his private financial advisory firm, Fisher Investments, in 1979 with just $250 in seed capital. Today, Fisher’s company manages more than $195 billion in total assets and his personal net work exceeds $5 billion.

Fisher set his sights on current market conditions. In a recently published note, Fisher points to the headwinds evident in the current environment: “Fear of the impact of tragic and crushing war in Ukraine and inflation abroad. Concerns that the “tightening” of central banks around the world will hurt China’s export demand. And the prolonged Covid restrictions in Shanghai and Beijing. All of this and more has torpedoed global sentiment so far this year. »

It’s a dark picture, it’s true. But Fisher also sees hope for investors, and that hope is part and parcel of the very pressures investors face. He writes: “Beneath the sour surface lurk powerful positives… Their stealthy presence amid widespread gloom overturns global recession fears and provides evidence that better days are ahead…” He describes the current conditions as “exactly the kind of widespread pessimism that new bull markets were born into.”

As for Fisher’s inspiration, we took a closer look at two stocks that Fisher’s company has moved on recently. Using the TipRanks database to find out what the analyst community has to say, we’ve learned that every ticker has a “Strong Buy” consensus rating from the analyst community and huge potential of increase.

Revolution Group (RVLV)

We’ll start with an online fashion retailer. Founded in 2003, Revolve now offers over 70,000 styles and items of apparel, footwear, accessories and beauty products. The company uses a data-driven merchandising system and in 2021 achieved 87% of its sales at full retail price.

Revolve posted net sales of $891 million last year, up 53% from $580 million in 2020. The strong sales trend is continuing, if not accelerating, this year; 1Q22 revenue was $283.5 million, the highest quarterly sales in the past two years – and up 58% year-over-year. The company’s earnings have been more volatile, with diluted EPS ranging from 22 cents per share to 42 cents per share over the past 8 quarters. The 1Q22 result of 30 cents was right in that range.

Among other positive first quarter news, Revolve Group reported operating cash flow of $53.8 million for the quarter, including $52.7 million in free cash flow. Represented gains of 62% y/y and capped at a 400% increase in free cash flow over three years. The company’s strong cash flow can be seen in the balance sheet, which held $270.6 million in cash and liquid asset reserves at the end of March, up 48% year-over-year.

It’s only natural for an e-commerce company with strong selling fundamentals to attract the attention of mainstream investors, and Fisher, who already owned more than 890,000 shares of RVLV, increased his stake in the first quarter to around 811,000. , to reach a new total of 1,703,038 shares. At current prices, Fisher has invested $51.87 million in Revolve Group.

Fisher is far from the only bull for this retailer. Wedbush analyst Tom Nikic concludes: “We believe the business has compelling short-term (return to in-person social events) and long-term (current customer numbers) growth prospects. is only around 3% of the target demographic. In addition, we like that RVLV is also delivering very profitable growth (DD EBIT margins). Overall, we remain bullish on this name, as the one of the most compelling growth stories in our coverage.

Nikic isn’t just charting a bullish path for the company, he’s backing it with an Outperform (i.e. Buy) rating and a price target of $59. According to this target, the shares should climb about 94% over the one-year period. (To see Nikic’s record, Click here)

Overall, analysts are generally willing to take bullish positions on RVLV. Of the 15 recent reviews published for this title, 12 are buys against only 3 taken, for a consensus rating of strong buy. The stock is selling for $30.46 and its average price target of $59.47 indicates an upside of around 95% over the next 12 months. (See RVLV stock forecast on TipRanks)

Rocket Lab USA (RKLB)

From e-commerce, we will move on to spaceflight. While Elon Musk’s SpaceX has grabbed headlines in the private venture capital space industry, it’s far from the only game in town. Rocket Lab is a space launch company with a small reusable launch vehicle, the Electron, capable of inserting 300 kg payloads into low Earth orbit. The Electron rocket is the only small reusable launch vehicle currently in service and is in high demand – Rocket Labs has completed 26 successful launches since its introduction and deployed 146 satellites.

Rocket Lab is working to expand the launch options available to customers with the development of the Neutron Launcher. The Neutron, when completed, will operate in the 8-ton payload class and will be able to launch cargo capable of completely leaving Earth orbit. Last year, the US Space Force awarded Rocket Lab a $24 million contract for development work on the upper stage of the Neutron vehicle.

In addition to its launch vehicle, Rocket Lab offers customers access to the Photon spacecraft, a small configurable vehicle launched as the upper stage of an Electron rocket. The Photon can be optimized for low and medium altitude Earth orbits, geosynchronous orbits or even extraterrestrial flights to the Moon or neighboring planets Mars and Venus. There are currently 2 Photon spacecraft orbiting Earth. At the end of May, Rocket Lab announced that its customer Varda Space Industries, which had previously ordered 3 Photon spacecraft, had increased its order to 4.

Also in May, Rocket Lab announced that the CAPSTONE spacecraft, a joint operation undertaken under contract with NASA, had been delivered to its New Zealand launch facility. Rocket Lab will now begin integrating CAPSTONE with the launch vehicle, as part of a long-duration NASA mission to the Moon.

This space launch company is of interest to Fisher, who recently repurchased 538,913 shares of RKLB. His stake in the company is worth $2.62 million at the current share price.

Rocket Lab has also caught the attention of Deutsche Bank analyst Edison Yu, who writes: next year and its new, larger Neutron rocket will be fully depleted. for at least 2-3 years even before its maiden voyage. Additionally, we believe its Space Systems segment remains undervalued despite securing the historic Globalstar/MDA contract which surprised many traditional competitors.”

“Looking forward, the stock may be volatile due to tactical factors (growth sell-off, change in shareholder base, etc…) but we believe the huge valuation mismatch will likely compress relative to to SpaceX which, in the private market, was fetching a $127 billion valuation just a few days ago (RKLB now trades at just ~$2 billion),” the analyst added.

Yu brings a Buy rating for the stock with his comments, and his price target here at $14 per share suggests a roughly 189% upside for the year ahead. (To see Yu’s track record, Click here)

His Wall Street peers are also optimistic about Rocket Lab’s outlook, as shown by the 4-to-1 split in analyst reviews, favoring buys over bookings and supporting a consensus view of strong buys. The shares are selling for $4.86 and the mid price target of $14.10 implies a high upside of 191% this year. (See RKLB stock forecast on TipRanks)

About Chris McCarter

Check Also

Pound rate against dollar hits 10-week best as dollar slips and stocks rise

The exchange rate between the pound and the dollar (GBP/USD) jumped above 1.1700 and posted …