Anthony Rizza became a part of the team at Columbus Circle Investors (CCI) in the summer of 1991, and since then has gone on to now be the firm’s guiding light, scoring a Chartered Financial Analyst designation under his title. Also part of the Hartford Society of Security Analysts, Rizza’s hedge fund hinges on a strong four-step process: identifying leading trends, determining the Street’s expectations, comparing new data, and subsequently constructing a portfolio molded by the art of diversification.
Trying to follow stocks that yield both encouraging momentum as well as a burst of “positive surprise,” what does Rizza see in store for leading tech players like Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Apple Inc. (NASDAQ:AAPL), and NVIDIA Corporation (NASDAQ:NVDA)? Let’s take a closer look:
Valeant Pharmaceuticals Intl Inc
Valeant has been navigating the patent waters when it comes to Apriso, the biotech giant’s ulcerative colitis drug, and now it appears the flood gates for generic competition could be opening twelve years earlier than the company had expected.
Nonetheless, after Valeant raised its full year adjusted EBITDA guidance range and impressed the Street after battling through a period of turbulent volatility, CCI boosted its holding in Valeant by almost 25% up to 75,252 shares worth $830.031k, which have gained 16% of their value since the last SEC filing.
This week, all eyes are on the U.S. Patent Office’s Trials and Appeal Board (PTAB)’s Final Written Decisions regarding its inter partes review (IPR) of Apriso’s patent, ruling in favor of the challengers from the likes of Mylan and GeneriCo and subsequently invalidating two of 16 patent claims. What does this mean for Valeant? Generic competition can start gunning for Apriso’s market share.
This is a drug that brought in $142 million in revenue last year for the giant, whose six of seven patents face expiration by April of next year, with the seventh lasting through 2030. When Valeant released its 10-K last year, it is clear the giant did not see rivalry as a threat at the time, for Apriso is not listed under products in danger of generic competition for the next four years. Generic rivals could hit by 2021, placing the gut drug’s earnings at risk- unless Valeant should try to appeal in federal court.
The rest of the Street continues to lean towards the sidelines, as TipRanks analytics indicate VRX as a Hold. Out of 14 analysts polled by TipRanks in the last 3 months, 2 are bullish on Valeant stock, 9 remain sidelined, and 3 are bearish on the stock. With a return potential of 51%, the stock’s consensus target price stands at $18.20.
Apple is being bombarded left and right with lawsuit publicity, between patent contentions with Nokia and suppler royalty complaints from Qualcomm continuing onward. This quarter, Rizza stepped back on Apple, reducing his stake by just under 26% to 1,338,830 shares worth $192.341k. Perhaps Rizza’s firm looks at the litigation with eyes wide open, still confident enough to have over a million shares invested in Apple; but cautious enough to retreat in its position.
In one court corner, Apple has had to contend with Nokia, but thankfully the two tech companies have signed an agreement regarding patent licensing in their intellectual property battle, agreeing on a patent license to last several years. This is a positive resolution, as the leaders have agreed to turn from an antagonistic conflict in an evolution toward a now much stronger partnership. In the agreement, Apple will hand over to Nokia an up-front cash payment along with other revenues throughout the terms of the deal. Apple stores will unite with Nokia health products in a new business alliance.
However, in a second corner, there is no neatly tied bow over the challenges Qualcomm has raised against the tech giant. Qualcomm is taking Apple to court, filing a request for a preliminary injunction against the giant’s suppliers so that they fork over licensing fees. Furthermore, Apple and Visa alike are facing a lawsuit from Universal Secure Registry (USR), with USR taking issue over the technology Apple Pay utilizes to make the payment process secure. Just seven years prior, USR had tried to partner with Apple and Visa, and the company disclosed intel behind its technology, which is protected by patents.
Overall, analysts are TipRanks analytics show AAPL as a Strong Buy. Based on 30 analysts polled by TipRanks in the last 3 months, 26 rate a Buy on Apple stock while 4 maintain a Hold. The 12-month average price target stands at $164.33, marking a nearly 8% upside from where the stock is currently trading.
NVDA is looking good to CCI, with Rizza initiating a position of 78,310 shares worth $8.35 million that have gained 30% in value since the last SEC filing. After announcing its exciting new Toyota collaboration, where Toyota will use NVDA’s DRIVE PX car technology as the thinking nucleus for its future self-driving cars, this is a major stride for the company.
Considering NVDA scored a deal with a car giant that leads as number three on the auto leaderboard, it appears to be a smart move for the hedge fund guru to be intrigued by this chip giant’s opportunities moving forward.
Notably, Toyota is not the only automaker in NVDA’s corner, with other key brands like the Audi to Tesla to Honda to BMW to Mercedes-Benz names all gravitating to the giant’s car computing technology. NVDA’s Xavier chip attracts a great deal of attention for its ability to manage 30 trillion deep-learning operations each second, all without a person needing to handle any of this processing while on the road.
The Xavier GPU is a chip that can simplify the technological process for car makers, and it is no wonder NVDA has been an auto alliance magnet these days, with the chip giant leading the pack in the chase to dominate the future of self-driving car space.
TipRanks analytics exhibit NVDA as a Buy. Out of 22 analysts polled by TipRanks in the last 3 months, 12 are bullish on NVDA stock, 8 remain sidelined, and 2 are bearish on the stock. With a loss potential of 10%, the stock’s consensus target price stands at $129.35.