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Bristol-Myers Squibb Co. (BMY) continues to see growth and outpace the S&P 500. Hedge funds were selling in the third quarter though the biopharmaceutical company landed on the WhaleWisdom Heat Map with a rank of four. Bristol-Myers significantly outperformed the S&P 500, rising by approximately 35% compared to the S&P’s loss of about 12%.

Bristol-Myers is a biopharmaceutical company that discovers, develops, and delivers innovative pharmaceutical medicines to combat serious diseases such as cancer and cardiovascular disease. Its primary focus is cancer, cardiovascular, immunology, and fibrotic therapeutic projects. Its products are sold worldwide to hospitals, retail pharmacies, government agencies, and wholesalers.


Hedge Funds Sell

Hedge Funds adjusted their portfolios in the third quarter of 2022, and the aggregate 13F shares held decreased to approximately 207.2 million from 210.8 million, a reduction of about 1.8%. Overall, 15 hedge funds created new positions, 152 added, 40 exited, and 135 reduced their stakes. Institutions lowered their holdings by about 0.9% to $1.61 billion from $1.62 billion.


Positive Estimates

Analysts expect a rise in earnings through 2023, with year-over-year increases in growth that could bring earnings per share to $7.95 by December 2023, up from a projected $7.62 for December 2022. Revenue predictions are favorable, with an expected increase to about $47.1 billion by the end of 2023, up from an estimated $45.9 billion in 2022. The 13F metrics between 2005 and 2022 show that the stock value and funds held remain on an upward trend.


Analysts Are Cautious

Analyst Trung Huynh of Credit Suisse Group initiated coverage of Bristol-Myers in November with a Neutral rating. Huynh set a $78 price target for the pharmaceutical stock, factoring in Bristol-Myers’ promising pipeline and market competition. Bristol-Myers’ research and development efforts may bring new drugs and more effective pharmaceutical treatments to market.

Favorable Outlook

Bristol-Myers has seen a strong year of steady growth. The company’s track record and earnings projections through 2023 are encouraging. Demand for Bristol-Myers’ products remains strong, and this pharmaceutical stock is an attractive opportunity for long-term investment.

Danaher Stocks Rises On The WhaleWisdom HeatMap

Posted on December 12th, 2022

Danaher Corp. (DHR) experienced stock fluctuation over the past year but has seen modest growth in recent months. Danaher’s stock closely followed the S&P 500’s performance, falling by approximately 13% year-to-date as of December 8, 2022. Hedge funds were selling in the third quarter of 2022, and the company landed on the WhaleWisdom Heat Map with a rank of three.

Danaher is a diversified global conglomerate that acquires and operates various manufacturing companies. Its general focus is on manufacturing and marketing medical, industrial, professional, and commercial products. The company operates through three core segments: Life Sciences, Diagnostics, and Environmental & Applied Solutions (EAS). However, Danaher announced in September 2022 that it would spin off its EAS segment to focus more on the firm’s life sciences and diagnostics businesses; Danaher reported that the divesture should be complete by the fourth quarter of 2023.

As Danaher implements its strategic business decisions, it navigates external factors such as market volatility and fluctuating demand. As a global science and technology innovator, Danaher’s growth was initially boosted by the Coronavirus pandemic when their life sciences research tools and diagnostic tests were highly sought after. However, as the pandemic progressed and vaccines became available, life began normalizing, and demand for Danaher’s products leveled off.


Mixed Responses from Hedge Funds and Institutions

Hedge funds sold in the third quarter, and the aggregate 13F shares held decreased to about 118.8 million from 119.3 million, a decrease of approximately 0.4%. Of the hedge funds, 28 created new positions, 146 added to an existing position, 27 exited, and 135 reduced their position. In contrast to hedge funds, institutions increased aggregate holdings by about 0.9% to approximately 562.5 million from 557.7 million.


Earnings Decline Forecasted

An earnings decrease may be inevitable for Danaher as it manages changes to its business segments and rides the rollercoaster of this bear market. Analysts predict earnings per share of $10.41 by December 2023, a decrease from an estimated $10.52 for December 2022. Revenue estimates also indicate a slide, with a projected decline to $30.7 billion by 2023, down from an estimated $30.8 billion in revenue for 2022.

Analysts Pull Price Targets

Analysts have been lowering price targets on the stock. RBC Capital Market’s Conor McNamara recently lowered its price target, influenced by Danaher’s decision to separate the EAS business, which McNamara noted will reduce exposure to economic cyclicality. McNamara decreased the firm’s price target to $293 from $302 while maintaining an Outperform rating on shares. This reduction builds on RBC Capital’s earlier October price target, trimming it to $302 from $318. Barclays analyst Luke Sergott also adjusted the firm’s price target to $277 from $285, maintaining an Overweight rating on Danaher.

Fair Outlook

Danaher has experienced a challenging year. While Danaher currently has a strong position on the WhaleWisdom Heat Map, it is also notable that analysts’ forecasted earnings through 2023 show no immediate sign of a rebound. Existing stockholders may choose to hold onto shares and regain their investments as the company navigates a bear market. New investors may be cautious but also see long-term growth opportunities from continued demand for Danaher’s diversified product offerings.

Illumina, Inc.’s (ILMN) stock fell over the past six months. The stock underperformed the S&P 500, declining by roughly 40% compared to the S&P 500’s loss of around 12% over the past year. Hedge funds have been actively buying Illumina’s shares, and the stock landed on the WhaleWisdom Heatmap with a rank of seven.

Illumina is a biotechnology company that provides sequencing and array-based solutions for genetic and genomic analysis. Its products and services enable the adoption of genomic solutions in research and clinical settings. Illumina’s customers include a range of government, academic, pharmaceutical, biotechnology, and clinical research institutions worldwide. As part of the biotechnology (biotech) industry, the company faced challenges from the Coronavirus pandemic. The biotech industry was upended when the pandemic hit, as research & development, clinical trials, and travel were initially halted by government mandates and restrictions. Research activities were also impacted by COVID-19 as researchers and research participants became infected with the virus, and new research efforts were developed to study the virus’ genome. Like many other biotechnology companies, Illumina continues to rebound from pandemic disruptions while facing macroeconomic challenges.


Hedge Funds Are Buying

Illumina has the attention of hedge fund managers and institutions. In the third quarter of 2022, the aggregate 13F shares held by hedge funds increased to about 35.2 million from 28.6 million, an increase of approximately 23.4%. Of the hedge funds, 30 created new positions, 75 added to an existing position, 39 exited, and 57 reduced their position. Institutions also added to portfolios and aggregate holdings increased by about 2.9% to approximately 138.4 million from 134.5 million. The long-term 13F metrics between 2005 and 2022 show that Illumina has some ground to regain.


Encouraging Multi-year Earnings

Analysts predict earnings per share will rise, increasing to $3.15 by December 2023, up from an anticipated $2.41 for late December 2022. Strong growth is expected to bring revenue to roughly $5.1 billion by December 2023, up from an estimated $4.6 billion in 2022.


Analysts Adjust Price Targets

There have been mixed responses from analysts due to Illumina’s recent performance. Analyst David Westenberg of Piper Sandler & Co. lowered the firm’s price target on Illumina to $300 from $320 and kept an Overweight rating on shares. Westenberg updated his analysis following missed earnings expectations for the third quarter. Canaccord Genuity Group, Inc. analyst Kyle Mikson lowered the firm’s price target to $330 from $340 and held a Buy rating on Illumina. Analyst Dan Brennan of Cowen & Company, LLC took a different approach to Illumina, swayed by a positive 2023 outlook for Illumina’s new NovaSeq X Systems, which allows large-scale data-intensive sequencing applications. Brennan raised the firm’s price target to $350 from $327 and maintained an Outperform rating on the stock.

Fair Long-Term Outlook

Illumina experienced a challenging year amid market volatility, but there is potential for a rebound. Illumina’s innovative biotechnologies and life science tools continue to be relevant and in demand for global research endeavors. With optimistic earnings estimates through 2023 from analysts, in addition to institutions and hedge funds buying, the stock is one for patient investors.

Workday Inc. (WDAY) underperformed the S&P 500, seeing a loss of approximately 50% compared to the S&P 500’s loss of about 18% over the past year. Hedge funds were actively buying shares despite recent performance fluctuations, and the stock impressively rose to the top of the WhaleWisdom Heatmap in the third quarter of 2022.

Workday is a cloud-based human capital management (HCM), financial management, enterprise performance management (EPM), and student information system software, vendor. Its cloud-based software solutions offer organizations critical business solutions and analytics tools worldwide. HCM solutions provide talent management, performance management, compensation, and succession planning capabilities to help customers attract, develop, and retain their workforce. Financial Management solutions include automated processes that allow clients to divert their time and focus away from transaction processing and more on the big picture through data analytics. The company’s student information systems are designed to support students and leaders of educational institutions through flexible programs. EPM solutions include financial management, talent management, enterprise planning, and spend management. Workday brings in revenue from client subscriptions and software sales through a software-as-a-service (SaaS) delivery model.

Despite seeing stock volatility in the past year, the Coronavirus pandemic considerably impacted Workday. Government restrictions and corporate safety measures pushed workforces to remote and hybrid work schedules. Workday was able to capitalize on the shift to remote work and increase its corporate client subscriptions as more and more companies migrated to the cloud and needed applications to efficiently manage critical business operations such as payroll and human resources. Workday has invested in research and development and has made strategic acquisitions over the years to diversify and expand its offerings for a more resilient business model.


Hedge Funds Are Buying

Workday has the attention of hedge fund managers, who were actively buying the stock in the third quarter. Hedge funds’ aggregate 13F shares held in the third quarter increased to about 63.7 million from 61.0 million, an increase of approximately 4.4%. Of the hedge funds, 47 created new positions, 80 added to an existing one, 28 exited, and 67 reduced their stakes. In contrast, institutions were selling, and aggregate holdings decreased mildly by about 0.7% to approximately 171.4 million from 172.4 million. The long-term 13F metrics between 2014 and 2022 suggest that despite Workday’s stock price volatility this year, it remains on a slow upward trend.


Encouraging Multi-year Estimates

Analysts anticipate earnings will rise through 2024, with year-over-year increases in growth that could bring earnings to $4.45 per share by January 2024, up from a projected $3.39 for 2023. Revenue predictions are also favorable, with revenue expected to increase to about $7.4 billion by January 2024, up from an estimated $6.2 billion in January 2023.


Analysts Adjust Ratings

Due to recent market volatility and macro conditions, analysts appear to be proceeding with caution. Analyst John DiFucci of Guggenheim Investments upgraded the firm’s rating on Workday to Neutral from Sell, viewing shares as fairly valued while noting that Workday has a challenge in meeting long-term targets for subscription revenue growth. Analyst Brian White of Monness, Crespi, Hardt & Co., Inc. downgraded Workday to a Neutral rating from a Buy, noting that the next year will be challenging as the economy grows weaker. White shared optimism that Workday will continue expanding its cloud platform’s reach.

Favorable Outlook Beyond 2022

While Workday’s growth has slowed, hedge funds are still buying shares, and earnings estimates through 2024 are encouraging. Demand for the company’s cloud-based solutions should continue to grow revenue, and the technology stock presents an attractive long-term investment.

Texas Instruments, Inc.’s (TXN) stock experienced a sharp decline over the past year but managed to outperform the S&P 500. It has been a tough year for the stock market, and Texas Instruments saw a decrease of approximately 9% compared to the S&P’s loss of about 18%. Hedge funds were actively selling the stock in the second quarter of 2022, though the stock’s value improved over the past month.

Texas Instruments is a technology company that designs and manufactures semiconductors and integrated circuits, selling them to electronics designers and manufacturers worldwide. The semiconductor industry has been highly impacted by inflation, Federal Reserve rate hikes, and supply-chain challenges, though demand for semiconductor chip technology remains strong.

The company’s business consists of two core operating segments, Analog and Embedded Processing, and Texas Instruments products are used across various industries. While some consumers initially think of Texas Instruments as the maker of scientific calculators required for high school and college math classes, Texas Instruments’ analog and embedded semiconductors are utilized in far more than education-based technology. Texas Instruments products are widely used in industrial, personal electronics, automotive, enterprise, and communications equipment markets. Manufacturers like Texas Instruments, who can support and meet the changing needs of artificial intelligence and Internet of Things (IoT) technologies, have opportunities for future growth in these markets.


Hedge Funds and Institutions Trim Portfolios

Texas Instruments’ second-quarter activity included hedge funds selling. The aggregate 13F shares held by hedge funds decreased to about 128.5 million from 131.9 million, a change of approximately 2.6%. Of the hedge funds, 25 created new positions, 115 added to an existing one, 27 exited, and 123 reduced their stakes. Institutions also mildly decreased their aggregate holdings by about 0.8%, to approximately 758.0 million from 764.2 million.


Earnings Decline Expected

Investors should prepare for the long game as analysts cut their earnings estimates for Texas Instruments. Earnings are expected to decrease to $8.00 by December 2023, down from an expected $9.52 for December 2022. Revenue is expected to decline to roughly $18.4 billion by December 2023, down from 20.0 billion in 2022. However, despite less than favorable earnings and revenue estimates through 2023, the long-term 13F metrics between 2005 and 2022 suggest that Texas Instrument’s investment potential remains strong.


Analysts Cut Targets

Analyst Christopher Rolland of Susquehanna Financial Group reacted to the signs of a slowdown in demand in the semiconductor industry. He lowered the firm’s price target on Texas Instruments to $195 from $215, maintaining a Positive Rating on shares. While weaker demand in some markets is likely temporary, other analysts have followed suit in lowering price targets. Citi analyst Christopher Danely kept a Neutral rating on Texas Instruments and lowered the firm’s price target to $155. While Texas Instruments reported favorable third-quarter results, fourth-quarter guidance fell below consensus. Analyst John Vinh of KeyBanc Capital Markets lowered the firm’s price target on Texas Instruments to $210 from $220 and kept an Overweight rating on shares.

Favorable Long-Term Outlook

Market volatility and semiconductor manufacturing challenges have taken their toll on this technology stock. Understandably, analysts have lowered price targets as the earnings outlook through 2023 decreases. As Texas Instruments’ stock continues moving in a positive direction and demand for semiconductor chips becomes stronger, there is optimism for sales and earnings growth beyond 2023. Existing investors should hold onto this stock as it presents an excellent long-term investment opportunity.