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Globe and Mail
4 days ago
- Business
- Globe and Mail
‘June dips are buying opportunities': CIBC's Mokhtari on his latest market views and 10 top stock picks
North American equity markets rallied sharply in May. The S&P/TSX Composite Index posted a 10-day rally last month, which pushed the index above 26,000 for the first time. This positive momentum is not over, according to CIBC's chief market technician Sid Mokhtari. He is forecasting a move above 27,000 in the months ahead. Mr. Mokhtari publishes a monthly report with his Top 10 stock ideas and his disciplined process continues to lead to portfolio outperformance. He screens and selects stocks from the largest 100 members by market capitalization within the S&P/TSX Composite Index. In the first five months of 2025, his portfolio of stock selections delivered a double-digit return of 11.4 per cent, compared to a 5.85 per cent gain for the broader index. His stock selections also outperformed the S&P/TSX Composite Index in 2024, 2023 and 2022 by 5.8 percentage points, 6.3 percentage points and 2.7 percentage points, respectively. For June, his Top 10 stock ideas include nine additions and one carryover from the prior month. They are: Aritzia (ATZ-T), Eldorado Gold (ELD-T), Exchange Income (EIF-T), Killam Apartment REIT (KMP-UN-T), MDA Space (MDA-T), NGEx Minerals (NGEX-T), Parkland (PKI-T), Shopify (SHOP-T), Sun Life (SLF-T), and the lone carryover is Power Corp. (POW-T). On June 3, I spoke with Mr. Mokhtari to get his technical take on the markets. We also delved into his June stock picks and ETFs with attractive technical setups. In a report that you published on June 1, you said both the TSX Composite Index and the S&P 500 exhibit a 'cup and handle' or 'pole and pennant' pattern. Could you break down these technical terms and what it suggests for future moves in these two indices? 'Pole and pennant' and 'cup and handle' patterns are typically associated with accumulation as well as uptrend continuation. With a 'pole and pennant', you see a surge in momentum and a sharp rise in a share price or an index. Then, you have a shallow consolidation in a short time frame, and that needs to resolve itself in the direction of the momentum burst. We estimate that we saw capitulation in April. Coming off the April lows, breadth began to exhibit an expansionary phase and momentum surged. This forced broader indices to shift upward in a very sharp fashion, creating almost a V-shaped recovery that created the pole. If we're correct in our breadth and market internals estimation, indices may pause and create a pennant that is often associated with period of a shallow consolidation before momentum reemerges to the upside. With a 'cup and handle' pattern, you have a gradual rounded bottom pattern, and that's a shift in trend bias. You lose sellers and gain buyers. Then, you have a secondary saucer-like pattern that develops above the bigger rounded pattern. A 'cup and handle' is a technical observation that is often associated with accumulation tendencies and usually results on the upside. I would say 'pole and pennant' is the one that I see a lot among U.S. stocks. Within Canada, we see a lot more rounded 'cup and handle' patterns. And a 'cup and handle' pattern is often seen within commodity indices or commodities, in general. So, both patterns suggest the S&P/TSX Composite Index and the S&P 500 will exhibit a pause in momentum, or consolidation period, after which they will resume their uptrends? Correct. And how long do you anticipate that pause or consolidation phase will last? The consolidation is shallow in amplitude. In other words, dips are shallow. And the phase of consolidation is not an elongated one. It lasts weeks to a month or two. So, we think by summer, as we go into July, we should be at higher levels for both the S&P 500 and the TSX Composite Index. So, the adage 'sell in May and go away', might instead be 'buy the dips in June and go away'? I genuinely think that's the case. I think 'sell in May and go away' is the wrong narrative. Market internals are very healthy. They have improved significantly. Breadth is in good shape. We see broader participation of many individual names in both the U.S. and Canada and momentum conditions are good. So, any pushback in the month of June should be a buying opportunity. In fact, since the secular bull market began in 2009, when May is a strong month, you typically see follow-through strength into July. So, June dips are buying opportunities. So, I have a constructive bias, even based on seasonal characteristics. Are you maintaining your single-digit positive return forecasts for this year for both the S&P/TSX Composite Index and the S&P 500 Index? As of May 30, the year-to-date price return is nearly 6 per cent for the TSX and less than 1 per cent for the S&P 500. I am. My base case is either very low double-digits returns for both indices or high single-digit returns. During year one of the U.S. presidential cycle, the S&P 500 has a median return of 8.1 per cent and a hit rate of 58 per cent. (A hit rate is a measure of frequency of observations.) For the S&P/TSX Composite Index, the median return is 9.6 per cent, the hit rate is about 65 per cent. So you do have slightly higher relative observations for the TSX Index, also noting that, at least by our measures, we should be able to see better propensity for TSX index to hold itself better relative to the S&P 500 in the second half of the year. The S&P/TSX Composite Index broke above 26,000 for the first time last month and the S&P 500 is nearing 6,000. I know you're anticipating a potential pause in June, a shallow consolidation for a brief period, but if an uptrend does resume in the summer months where could these indices rise to? Fresh discovery becomes difficult once we begin to make new highs. For the TSX Composite Index, I am measuring 27,100 to as high as 27,500. That would be my amplitude measured move. For the S&P 500, 6,475 to as high as 6,500. And over what time period? I would not be surprised if we resolved that in the next few months. In a report that you published last month, you noted an improvement in growth and momentum factors and a rotation away from value, low volatility and dividend yield factors. Given your outlook for the uptrend continuation for major North American indices, will growth and momentum stocks continue to be the leaders? I think that's the case. We still see that factor rotation favouring growth and momentum. Offence versus defence is certainly showing a better technical backdrop. I looked at four sectors and put them together on an equal-weight basis, and they were financials, consumer discretionary, industrials and technology, and divided them by utilities and staples. So, I put the offensive sectors in the numerator and defensive sectors in the denominator, and there is a technical chart that shows this ratio does have better upside potential, which favours strength in the numerator or weakness in the denominator. Was that analysis looking at sectors in the S&P/TSX Composite Index? That was for the TSX. For the U.S., we see the same thing. For the U.S., we found that defence is also resting. We're seeing utilities pausing and drifting, staples pausing and drifting, but against them we're seeing technology leading and sharply showing strength. We're seeing financials continuing to show better relative and absolute performance. We also see 'Magnificent Seven' stocks starting to show a very strong set of positive reversals, and that's a very big weighting in the S&P 500. When we spoke in January, you said, 'Bitcoin is a vehicle that is slowly becoming of asset allocation importance.' You added that given the strong run, the price of Bitcoin could dip to US$80,000 or lower, which would mark a good level to revisit the cryptocurrency. Your forecast was accurate. In April, Bitcoin fell below US$80,000 before surging to a record high in May. What is your current outlook for Bitcoin? I noticed in your matrix table that ProShares Bitcoin ETF (BITO-A) jumped in its rankings last month and entered the top 10. Like the markets where we see a pause and refresh, this should also be applied to Bitcoin and cryptos. We don't see Bitcoin falling below US$90,000 on a pullback. We think it would be a shallow correction. On the upside, we measured it to be closer to US$137,000 to as high as US$150,000 for Bitcoin so there's a lot of upside for Bitcoin, in our opinion. We're also seeing miners that are associated with cryptocurrency mining show better moving internals. Miners are showing positive reversals and better improving technical backdrops. Could you highlight a couple of them for our readers? In Canada, there's Galaxy Digital (GLXY-T), which recently had a sharp move and has now pulled back. I think this pullback can provide another opportunity given the pullback is on thinner volume and we're already seeing a 'golden cross' pattern within Galaxy Digital. There's one in the U.S. that everybody looks at called Strategy (MSTR-Q), formerly known as MicroStrategy. That's another good one that is showing better share price action. Both the 50-day and 200-day moving averages are marginally rising. This is a very constructive pattern for Strategy. Do you have technical targets for Galaxy and Strategy? For Galaxy, we are looking at revisiting the previous high. In other words, we should get back to a $35 handle and we should also be able to push through $35 on the upside. We measure that move to potentially be to $44, $45 levels. Strategy should be able to get back to north of US$460, US$480 from where it is. This is effectively a chart that is heavily tied to Bitcoin. Are there other thematic ETFs that are exhibiting major moves, either higher or lower, in your matrix? We still like silver and gold. We had a pause because of their seasonality. We saw a slower pace of advance in the miners, VanEck Gold Miners ETF (GDX-A), VanEck Junior Gold Miners (GDXJ-A) and Global X Silver Miners ETF (SIL-A). These ETFs are showing positive reversals. Seasonal strength for both silver and gold tends to become stronger as you go into the end of the summer. Here too, I estimate that dips will be able to provide a buying opportunity for anyone whose interested in this space. We like gold. We like silver. Silver has underperformed. I think that gives silver better potential buoyancy relative to gold. Last month, you added TD Bank to your top 10 best ideas basket and you had an initial price target of $94. The share price closed the month of May at $94.77. Your technical target was spot on. This month, you removed TD from your top 10 list and replaced it with Sun Life. However, I noticed in your technical scorecards that multiple bank stocks continue to rank well. We find some of the insurance names to be less overbought relative to banks. I am of the view that banks have already put out a great set of earnings and a lot of good news may already be discounted in the share price. So, I would not be surprised to see a period of consolidation or a pause among the banks and maybe a rotation in favour of lifecos. The recent technical breakout in Sun Life share price is still new from a time horizon perspective, with a momentum buy signal that was triggered only three weeks ago. It is reasonable to suggest that many alpha capture models are likely overweight Sun Life stock. It has a durable relative strength backdrop. It ranks well in our matrix process with a big increase in its delta - month over month rank. Fundamentally, our desk is also positive on SLF based on continued profit improvement in the U.S., earnings growth, growth in Asia and share buybacks. Earnings per share estimates are coming in above consensus and there could be further upside if our views are correct for the U.S. equity markets head higher into summer. And your technical target for Sun Life is? We are measuring $93.10 to as high as $95 for Sun Life on the upside. I noticed that half of the securities on your top 10 best ideas list are at or very close to all-time highs, those being Power Corp, Sun Life, EIC, MDA and NGEx Minerals. They're not looking overbought or overextended to you then? We do believe the stocks that make 52-week highs are likely to make new 52-week highs as time progresses just because momentum begets momentum. It's also a relative ranking for me. So, Power Corp. is a defensive name. I always have to be balanced in my view when we construct a basket of top 10 best ideas to make sure that I have a cushion in case there is a measure of defence that develops during the month. So, I think Power Corp. fits that call. Power has already broken out of its range, and pullbacks should be supported. MDA is poised to breakout, I'm measuring $34 to as high as $36. It has a flat top that has been in place for the past 12 months and has gone to this same reference point a few times, and I think if you knock on the same door often, it will open for you. Parkland is an interesting addition to your top 10 best ideas list as it has a potential near-term potential catalyst. They received a takeover offer, which shareholders will vote on later this month. I've had this name in our basket in the past and I think this is a name that has a backdrop of a shift in trend, i.e. a 'golden cross' condition, which is your 10-week moving average over the 40-week moving average. Also, there's been a lot of positive divergences throughout the past six months. By divergences, I mean momentum has been showing bottom building - that's positive divergence. The breakout above $37 for PKI established what's called a 'double bottom' technical pattern that should bring about a measured move north of $42. So, I'm thinking PKI below $40 is attractive. Earlier you remarked on the importance of having a very balanced portfolio. Given the need to have a diversified portfolio, is there a stock that would have appeared on your top 10 best ideas list but due to sector constraints you weren't able to include it? AGF (AGF-B-T) is a great name. It has a positive trend shift in our work. It has a reasonable yield and a good longer-term relative strength shift. AGF is a name that we like, but it's also a name that is not liquid enough. But nonetheless, I do know the sentiment for AGF is positive. Technical scores and quantitative factors for AGF are positive. It's a good name that continues to show a $14 handle as a measured move. It's not added because there are other more liquid names that stand above it. Looking at global investment opportunities, European ETFs continue to rank well. In your global regional ETF matrix, the top five ranked ETFs, starting with number one, are the Global X MSCI Greece ETF (GREK-A), followed by the iShares MSCI Italy ETF (EWI-A), the iShares MSCI Spain ETF (EWP-A), and then two German ETFs - the iShares MSCI Germany ETF (EWG-A) and Franklin FTSE Germany ETF (FLGR-A). Do technical indicators suggest that the strength in European markets will remain intact or do you think this rotation to growth and momentum factors may lift U.S. focused ETFs? We find a very deeply oversold condition that favours the S&P 500 from a mean reversion perspective over iShares MSCI ACWI ETF (ACWI-Q), the All Country World Index. So, we would not be surprised to see a pause or consolidation with some of these strong runners like Greece, Italy or Germany or other regions compared to S&P 500, which is not as overbought. I do admit that my ranking order is still keeping the S&P 500 on the lower side. The U.S. has come up in its ranking to number 51 out of 64 that we monitor, a 10-point delta relative to previous months. So, the U.S. has come up but it's still in the lower bucket of our ranking process. An interesting move I saw was move higher in the iShares MSCI Hong Kong ETF (EWH). It ranked number 36 in your regional ETF matrix on April 29, and the latest figure I saw was number 7. We like Hong Kong. We like Japan. iShares MSCI Hong Kong ETF (EWH) and iShares MSCI Japan ETF (EWJ) both exhibit a very good technical backdrop, they're not overbought by any measure, and I think that it's reasonable to make the case that if you want to diversify from the away from the U.S., having exposure to those parts of the world would not be a bad idea. Generally speaking, we like iShares MSCI EAFE ETF (EFA-A). We still think that the U.S. dollar is probably going to stay at best flat to lower, and that should be able to buoy a lot of those regions. But, I am very cognizant that if we're correct about our estimation about the 'pole and pennant' pattern that has been developing and the V-shaped recovery that is developing within the 'Magnificent Seven' and with some of the U.S. mega-cap stocks, I would not be surprised to see the S&P 500 perform relatively better in the weeks, months ahead compared to Europe or other regions. Anything else that you want to mention to readers? We're seeing good breadth expansion within the REIT space in Canada. So, InterRent REIT (IIP-UN-T) was acquired last month. We saw a big move in the broader REIT space in Canada and we're seeing a better follow-through in the likes of Killam Apartment REIT. So, we added KMP to our basket. Killam is currently trading at $19 and change, it has a very strong band of support at $18.50, and notable upside potential closer to $20.50. It also has a good yield, so I think Killam is a good name to have in our basket. But it's not just KMP, we see a broad improvement within the REIT space. Breadth in TSX REITs has notably improved with the members having broadly recovered above their medium and longer-term averages. Both BMO Equal Weight REITs Index ETF (ZRE-T) and iShares S&P/TSX Capped REIT Index ETF (XRE-T) are showing better durability in their momentum readings that should support the sector from a buy the dip perspective. This Q&A has been edited for brevity and clarity.
Forbes
23-05-2025
- Business
- Forbes
Here Are All The Stock Picks From The 2025 New York Sohn Conference
The 2025 New York Sohn Conference wrapped up on May 14, bringing with it many interesting stock picks and ideas. Here are all the stocks that were presented at this year's conference — with some brief tidbits about why the presenters like the stocks. Scott Goodwin, co-founder and managing partner of Diameter Capital Partners LP, speaks during the ... More Sohn Investment Conference in New York, U.S., on May 6, 2019. The conference gathers top investors from around the globe for a day of fresh market insights. Photographer: Alex Flynn/Bloomberg VictoryArc's Joseph Talia pitched the Tel Aviv Stock Exchange (TLV:TASE). He said the company enjoys a monopolistic opportunity in an underdeveloped capital market. Talia sees several factors to drive double-digit top-line growth. The company has a net cash balance sheet and could be a take-out target. Talia thinks the stock can rise 3x over the next five years. Felis Advantage's Connie Lee offered nCino (NASDAQ:NCNO), which she said is trading at a steep discount versus peers. Over 90% of its revenue is recurring, and just 20% of possible clients have adopted the fintech's services. Billings grew 22% YoY in the last quarter. Kultura Capital's Kristov Paulus suggested Robinhood Markets (NASDAQ:HOOD). The company has a customer retention rate of 95% with organic new deposits up over 2x. There's $84 trillion in wealth transfer estimated over next two decades in the U.S. Assets per funded account is up 58% YoY in the latest quarter, with transfers at 10x that level. Paulus sees a 3-6x risk/ reward. Arene Capital's Alexandra Engler pitched Celanese (NYSE:CE). Shares are off 24% this year as investors focused on downside earnings revisions and levered balance sheets. However, Engler sees positives from the acetyls segment amid an expected worldwide shortage. She sees 53% upside from $51. Jehoshaphat Research's Victor Bonilla is short Main Street Capital (NYSE:MAIN), which has a portfolio of large, illiquid loans and equity investments. He noted strange individual markup stories, like Cody Pools, which is marked up versus its public pool competitors. Bonilla believes the dividend is under threat and pointed to unprecedented insider selling Mink Brook Asset Management's William Mueller is short automotive supplier Cooper-Standard Holdings (NYSE:CPS). It's highly capital intensive with high leverage and a peak margins story. The stock soared 80% on the first-quarter beat. Sees 30/5 risk/ reward versus 25 today. Bleecker Street Research's Chris Drose is short Aurora Innovation (NASDAQ:AUR). The pre-revenue company is burning $750 million a year and needs to raise another $750 million to get to commercialization. Executives are also selling, and Aurora has a long history of understating its capital requirements. Oasis Capital's Seth Fischer pitched Kyocera. Despite the years-long problems, management recently started announcing targets, enabling investors to hold them accountable. Kyocera also began unloading some of its non-core businesses and plans massive share repurchases. Fischer sees a way out of the problems if Kyocera dumps more unprofitable operations, restructures its buybacks, streamlines its product portfolio, boosts productivity, and downsizes operations. Impactive Capital's Lauren Taylor Wolfe offered Wex (NYSE:WEX), which she said is Rb a misunderstood impact investment with high-quality assets. She expects changes like a separation of businesses to close the gap in valuation, describing the company as a category leader with sticky revenues, high margins and a network effect, although it trades at only 8x next year's earnings. Wolfe also said Wex is trading at a massive discount to its sum-of-the-parts valuation. Heard Capital's William Heard suggested Adobe (NASDAQ:ADBE), which he said is a misunderstood leader in digital content with lots of upside. He believes the company is well positioned to win the AI arms race, although the market has misread its approach as defensive. Adobe bought back nearly 10% of its current market cap and has $14 billion left on its buyback program. Sees upside from $400 to $700. Infinitum Asset Management's John Yetimoglu pitched Sea (NYSE:SE), the 'Amazon of Southeast Asia,' plus the world's most popular game and a fintech business with synergies to the e-commerce division. He believes the company is uniquely positioned to benefit from supply chain movements into Southeast Asia. Yetimoglu sees Sea's stock more than tripling over the next three to five years. Rubric Capital's David Rosen offered Vivendi spinoff Canal+ (LON:CAN), which he said has a strong management team with shareholder alignment. Describing its valuation as 'shocking,' he said it suggests the company is in structural decline, even though it isn't. Rosen believes spin technical, low free cash flow conversion, corporate governance, limited post-spin financial guidance, and the pending merger with Multi-Trust are to blame for the low valuation. Insiders are aggressively buying shares. Rosen owns 9% and sees 220% to 605% upside to Canal+'s stock price. PLP Funds' Lennon pitched National Vision Holdings (NASDAQ:EYE), which benefits from a replacement cycle driving inflection in the industry. New management is driving managed care monetization. Activist fund Engine Capital is involved, and National Vision could take share from competitors if tariffs rise. Lennon sees a 3x opportunity in this stock and predicts the stock will double in 2026. Glenview Capital's Larry Robbins likes Teva Pharmaceutical (NYSE:TEVA) and Global Payments (NYSE:GPN). Teva benefits from rising prices of generics drugs amid concerns about availability that Teva can help fill. The company also makes biosimilars, which he sees as a $100 billion opportunity. Robbins estimates Teva's pipeline is worth $9 a share and isn't in anyone's numbers. Robbins said the market didn't like the net investment of selling Global Payments' issuer business to FIS and buying Worldpay, which created an opportunity in the shares. Greenlight Capital's David Einhorn pitched Lanxess (ETR:LXS), a German chemical company that owns a strong portfolio with reduced complexity and is focused on cash generation. Shares have been cut in half since Russia invaded Ukraine, triggering an energy crisis. The inventory destocking cycle that started in 2022 is nearly done. Lanxess should see tailwinds from tariffs since almost 30% of manufacturing is in the U.S. Einhorn sees €50 a share by end of 2027 with another €15 a share due to buybacks. Advent Capital's Mohammed Anjarwala offered Blue Owl Capital (NYSE:OWL), which he said is a high-growth, annuity-like business. It has high recurring revenues with long-term visibility, and Anjarwala expects its earnings to double by 2028. He sees upside from $19 to $36 a share. Bornite Capital's Dan Dreyfus suggested Mirion Technologies (NYSE:MIR), a radiation detection company that could benefit from President Trump's executive order to quadruple U.S. nuclear production, implying $3 trillion to $5 trillion in spending on nuclear infrastructure. Seventy percent of Mirion's revenues are recurring, making it essentially recession proof, and it sells to 95% of all nuclear reactors globally and the top 100 cancer centers in the U.S. The last stock pitched at this year's Sohn Conference was from Hiddenite Capital Partners' Ryan Packard who pitched Comfort Systems (NYSE:FIX), an adept advantaged acquirer that's rarely discussed. He said the company has an 18-year history of 25% CAGR and a successful track record of capital deployment and M&A. Packard expects Comfort Systems to benefit from reshoring and AI. He sees upside from $465 to $850 over two-and-a-half years. Disclosure: I have no position in any stocks mentioned.
Yahoo
10-05-2025
- Business
- Yahoo
TEGNA Inc. (TGNA): Among Billionaire Mario Gabelli's Small-Cap Stock Picks with Huge Upside Potential
We recently published a list of Billionaire Mario Gabelli's 10 Small-Cap Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where TEGNA Inc. (NYSE:TGNA) stands against other small-cap stock picks with huge upside potential. Mario J. Gabelli founded Gabelli Asset Management Company in 1977. The firm is now called GAMCO Investors and is an American firm headquartered in New York. It specializes in providing investment advice and brokerage services to mutual funds, institutional clients, and select investors. It is majority-owned by Mario Gabelli, who is the Chairman and CEO of it. GAMCO Investors includes two businesses: GAMCO Asset Management, with institutional and separate accounts; and Gabelli Funds. The last reported 13F filing for Q4 2024 included $9.55 billion in managed 13F securities and a top 10 holdings concentration of 16.81%. Gabelli stayed true to the principles of value investing and used a solid base created by Warren Buffett and Ben Graham, while adding some of his elements to the mix. He believes that value investing isn't focused on short-term market movements. He looks for the ignored and unloved companies that nobody covers for whatever reason, with a good business, solid management, and a good price. As January was ending, Gabelli joined 'Squawk Box' on CNBC to discuss a range of topics. He explained how the stock market's performance is tied to company earnings, revenue growth, gross margins, expenses, and taxes, but most importantly to the market multiple, which is influenced by interest rates. These are shaped by debt, deficits, and overall confidence. Gabelli also mentioned that strategic corporate M&A was returning after a freeze caused by regulatory uncertainty and some failed deals. Activist investors are also seeking greater visibility and pushing for changes at companies. He argued against reducing the corporate tax rate below 21% but advocated for a minimum tax on a cash basis. He called for the restoration of 100% bonus depreciation, which would allow businesses, such as farmers, to fully write off new equipment purchases immediately, thereby encouraging investment in technologically advanced machinery. Gabelli mentioned that similar incentives should apply to capital expenditures in sectors like cable and referenced comments from Hans Vestberg. He noted that while corporations currently receive tax deductions for capital expenditures, these are spread over longer periods, and accelerating them would provide more immediate benefits. Gabelli graduated summa cum laude in 1965 from Fordham University's College of Business Administration in 1965 and holds an MBA from Columbia University Graduate School of Business. He has received honorary doctorates from Fordham University and Roger Williams University. He also serves on the Boards of Boston College, Roger Williams University, Columbia University Graduate School of Business, the American-Italian Cancer Foundation, and the Foundation for Italian Art & Culture. He is a Trustee of the Winston Churchill Foundation of the US and the EL Wiegand Foundation. Gabelli was honored as Morningstar's Portfolio Manager of the Year in 1997, named Money Manager of the Year by Institutional Investor in 2011, and is a member of Barron's All-Star Century Team. To compile the list of billionaire Mario Gabelli's 10 small-cap stock picks with huge upside potential, we sifted through the Q4 2024 13F filings of GAMCO Investors from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 50 stock picks that were trading between $1 billion and $10 billion and ranked the stocks in ascending order of this upside potential. We have also added GAMCO Investors' stake in each company and the hedge fund sentiment around each stock. Note: All data was sourced on May 8. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A close-up of hands typing on a laptop, highlighting the company's digital content. GAMCO Investors' Stake: $43.69 million Number of Hedge Fund Holders: 28 Market Capitalization as of May 8: $2.82 billion Average Upside Potential as of May 8: 13.45% TEGNA Inc. (NYSE:TGNA) is a journalism company in the US. It engages in content and tools to help people navigate their daily lives. It also offers marketing solutions and provides news content to consumers across various platforms, such as online, mobile, connected television, and social platforms. In Q4 2024, TEGNA's Subscription Revenue reached $357 million, which was a 5% increase year-over-year. This growth was attributed to successful MVPD contract renewals for ~20% of the company's traditional subscribers during the quarter. There were also contractual rate increases and a favorable comparison to a prior service disruption, which was partially offset by subscriber decline. For the full year 2024, Subscription Revenue totaled $1.5 billion. For 2025, TEGNA has ~45% of its traditional subscribers up for renewal, which presents opportunities to secure appropriate value for its content. This recurring revenue stream provides a stable financial base for TEGNA Inc. (NYSE:TGNA) as it navigates the evolving media landscape and focuses on its broader transformation initiatives. Overall, TGNA ranks 10th on our list of billionaire Mario Gabelli's small-cap stock picks with huge upside potential. While we acknowledge the potential of TGNA as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TGNA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
Seadrill Limited (SDRL): Among Billionaire Paul Singer's Stock Picks with Huge Upside Potential
We recently published a list of Billionaire Paul Singer's 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Seadrill Limited (NYSE:SDRL) stands against other stock picks with huge upside potential. Paul Singer founded Elliott Investment Management in 1977 in New York. It is one of the oldest hedge funds under continuous management and is also one of the largest activist funds in the world. It is the management affiliate of American hedge funds Elliott Associates and Elliott International Limited. Launched in 1994, Elliott International Limited has consistently outperformed the S&P 500 index by ~5 percentage points annually since its inception, which is a track record mirrored by Elliott Associates. Paul Singer earned a BS in psychology from the University of Rochester and a JD from Harvard Law School. He then spent 4 years working in corporate law firms and the investment bank Donaldson, Lufkin & Jenrette before founding Elliott Investment Management. Elliott Management has 38 clients and discretionary assets under management (AUM) of $97.37 billion, according to the Form ADV dated 13 February 2025. The last reported 13F filing for Q4 2024 included $16.66 billion in managed 13F securities and a top 10 holdings concentration of 82.44%. Singer has built a reputation on Wall Street for his aggressive tactics that often generate significant shareholder value by exploiting weaknesses in various asset classes. His initial approach to investing was to target companies and even governments while purchasing extremely distressed debt. In February 2025, Singer appeared on a Podcast titled 'In Good Company with Nicolai Tangen', where he also discussed what he believes is the reason behind bad investments. While bad luck remains a relevant factor, he believes that these failures result from oversights and inadequate and/or incorrect hedging strategies: 'Sometimes it's bad luck, but more frequently it's (that) we missed something. We missed. Or the hedges weren't, they weren't the right hedges. The tracking error was much more than we expected. At the beginning of my career, 1977 to like 1987, hedging was much more simple, because we were long a convertible bond and short the stock into which the convertible was convertible. So that's very straightforward. And tracking error wasn't really a factor. We've become much more sophisticated in hedging, in creating bespoke hedges for different kinds of trades. But even those don't work out exactly, you know, all the time. But sometimes, you know, the worst trades, and I don't mind mentioning them, it's a kind of a form of therapy and a pedagogical exercise. The worst trades are the trades that you misunderstand the risk. You put it into the wrong category.' To compile the list of billionaire Paul Singer's 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Elliott Management from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 20 stock picks and ranked the stocks in ascending order of this upside potential. We have also added Elliott Management's stake in each stock as well as the broader hedge fund sentiment for it. Note: All data was sourced on May 8. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Drilling rig silhouetted against a setting sun in an offshore location. Elliott Management's Stake: $144.19 million Number of Hedge Fund Holders: 42 Average Upside Potential as of May 8: 66.08% Seadrill Limited (NYSE:SDRL) provides offshore drilling services to the oil & gas industry worldwide. It owns and operates drill ships and semi-submersible rigs for operations in shallow and ultra-deep water in benign and harsh environments. It serves oil super-majors, state-owned national oil companies, and independent oil and gas companies. The company reported a $1.3 billion contracted backlog in 2024, which saw a net increase of $700 million during the year. This backlog provides revenue visibility, which extends through 2028 and into 2029, with ~90% of the midpoint of the 2025 revenue guidance already secured within this backlog. This revenue guidance is between $1.3 and $1.36 billion. According to the CEO, Seadrill is positioned to navigate market volatility due to a strong balance sheet and durable backlog. Seadrill Limited (NYSE:SDRL) secured two significant long-term contract awards in Brazil in December 2024 as well, which are to commence in 2026. These added $1 billion to the company's backlog and included a mobilization fee exceeding $70 million. These awards for the West Jupiter and the West Telus are for 3-year terms each with Petrobras. Patient Capital Opportunity Equity Strategy is positive on the company and stated the following regarding Seadrill Limited (NYSE:SDRL) in its Q1 2025 investor letter: 'Seadrill Limited (NYSE:SDRL) is the fourth largest pure play deepwater drilling specialist. The company emerged from bankruptcy in February 2022 with a net cash position and is positioned to benefit from limited supply and increasing demand in the deepwater drilling rig market. Nearly half of all deepwater drilling rigs worldwide were scrapped during the last decade, while industry consolidation has created a more rational competitive landscape than we've seen historically. Although oil demand has remained reasonably healthy, surprisingly strong onshore production from the USA, Canada and Russia has helped keep a lid on prices. While this has negatively impacted contract rates near-term, we believe that long-term future shale supply growth will be limited, and more offshore supply will be required benefitting offshore drillers. Given its highly specialized rig fleet and minimal debt, we believe the company is well positioned to benefit from improving prices when demand rebounds. We believe Seadrill could either lead industry consolidation or become an acquisition target.' Overall, SDRL ranks 2nd on our list of billionaire Paul Singer's stock picks with huge upside potential. While we acknowledge the potential of SDRL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SDRL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
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10-05-2025
- Business
- Yahoo
Transocean Ltd. (RIG): Among Billionaire Paul Singer's Stock Picks with Huge Upside Potential
We recently published a list of Billionaire Paul Singer's 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Transocean Ltd. (NYSE:RIG) stands against other stock picks with huge upside potential. Paul Singer founded Elliott Investment Management in 1977 in New York. It is one of the oldest hedge funds under continuous management and is also one of the largest activist funds in the world. It is the management affiliate of American hedge funds Elliott Associates and Elliott International Limited. Launched in 1994, Elliott International Limited has consistently outperformed the S&P 500 index by ~5 percentage points annually since its inception, which is a track record mirrored by Elliott Associates. Paul Singer earned a BS in psychology from the University of Rochester and a JD from Harvard Law School. He then spent 4 years working in corporate law firms and the investment bank Donaldson, Lufkin & Jenrette before founding Elliott Investment Management. Elliott Management has 38 clients and discretionary assets under management (AUM) of $97.37 billion, according to the Form ADV dated 13 February 2025. The last reported 13F filing for Q4 2024 included $16.66 billion in managed 13F securities and a top 10 holdings concentration of 82.44%. Singer has built a reputation on Wall Street for his aggressive tactics that often generate significant shareholder value by exploiting weaknesses in various asset classes. His initial approach to investing was to target companies and even governments while purchasing extremely distressed debt. In February 2025, Singer appeared on a Podcast titled 'In Good Company with Nicolai Tangen', where he also discussed what he believes is the reason behind bad investments. While bad luck remains a relevant factor, he believes that these failures result from oversights and inadequate and/or incorrect hedging strategies: 'Sometimes it's bad luck, but more frequently it's (that) we missed something. We missed. Or the hedges weren't, they weren't the right hedges. The tracking error was much more than we expected. At the beginning of my career, 1977 to like 1987, hedging was much more simple, because we were long a convertible bond and short the stock into which the convertible was convertible. So that's very straightforward. And tracking error wasn't really a factor. We've become much more sophisticated in hedging, in creating bespoke hedges for different kinds of trades. But even those don't work out exactly, you know, all the time. But sometimes, you know, the worst trades, and I don't mind mentioning them, it's a kind of a form of therapy and a pedagogical exercise. The worst trades are the trades that you misunderstand the risk. You put it into the wrong category.' To compile the list of billionaire Paul Singer's 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Elliott Management from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 20 stock picks and ranked the stocks in ascending order of this upside potential. We have also added Elliott Management's stake in each stock as well as the broader hedge fund sentiment for it. Note: All data was sourced on May 8. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). An aerial view of an oil rig with drillers in hard hats working on the platform. Elliott Management's Stake: $44.51 million Number of Hedge Fund Holders: 38 Average Upside Potential as of May 8: 73.91% Transocean Ltd. (NYSE:RIG) provides offshore contract drilling services for oil & gas wells in Switzerland and internationally. The company contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. It also operates a fleet of mobile offshore drilling units, which consist of ultra-deepwater floaters and harsh environment floaters. In Q1 2025, Transocean delivered $906 million in contract drilling revenue, which was generated at an average daily revenue of ~$444,000. The demand for Transocean's contract drilling services, particularly in the deepwater market, is expected to grow further. Industry projections, like those from Mackenzie, anticipate a 40% increase in deepwater investment by 2030. This outlook is driven by the fact that over 90% of deepwater 2P (proven and probable) reserves are economic at above $50 per barrel. In the US Gulf, Transocean Ltd. (NYSE:RIG) anticipates up to 6 programs to commence in Q2 and Q3 of 2026, with durations ranging from 6 months to 4 years. For the full year 2025, Transocean Ltd. (NYSE:RIG) anticipates contract drilling revenues to be between $3.85 and $3.95 billion due to higher activity on specific rigs and improved revenue efficiency. Overall, RIG ranks 1st on our list of billionaire Paul Singer's stock picks with huge upside potential. While we acknowledge the potential of RIG as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RIG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
