Billionaire Paul Tudor Jones pours millions into these two stocks amid recession fears
The assumption of most financial forecasters is that a recession is most likely on the horizon, and one public figure agrees it’s all but inevitable. Legendary investor Paul Tudor Jones predicts a recession is coming and has predictions about when it will happen.
The billionaire founder of Tudor Investment Corp. expects a recession this fall, largely as a result of the recent surge in debt and asset prices. Such activity is usually followed by an economic downturn.
“Historically, it’s about two years too late for a real downturn in the economy to lead to a recession,” Tudor Jones explained. “It will be in the third quarter of this year. Based on our latest financial situation, it is very likely that we are on the verge of either looking like a recession or actually going into a recession.”
That’s not to say it’s time to leave the stock market. In fact, Tudor Jones has inflated his portfolio with stocks he deems well-equipped to handle the coming recession, pouring millions into some stocks. We ran some new additions to his stock his collection through the TipRanks database and also measured street sentiment towards these names. The results are as follows.
Abbott Laboratories (ABT)
During recessions, health care stocks are considered defensive investments because of their resilience and stability in the face of downturn pressures. This also applies to Abbott Laboratories.
Founded in 1888, Abbott is a multinational healthcare company known for its wide range of products and services in diagnostics, medical devices, nutrition and branded generic medicines. With a rich history, a global presence in more than 160 countries, approximately 115,000 employees and a market capitalization of $189 billion, Abbott has a strong reputation for innovation and a key position in the industry I’m here.
Investors appreciated the company’s latest quarterly results, even though the numbers were lower than in the same period last year. Revenue fell 18.5% year-on-year to $9.7 billion, slightly above consensus expectations. The company said the decline in sales is due to an expected decline in sales related to COVID-19 testing compared to the previous year. Ultimately, adjusted EPS fell 40.5% year over year to $1.03, which was $0.05 higher than expected. On the full-year outlook, the company maintained its adjusted EPS forecast in the $4.30 to $4.50 range.
Tudor Jones will love what’s on offer here. He opened new positions in his ABT during the first quarter and purchased 139,628 shares. These are currently worth $15.13 million.
Morgan Stanley analyst Cecilia Furlong is also a fan of the company. She said of the company: “Abbott has a strong balance sheet that supports a faster organic growth profile in our 2023-2025 base (formerly COVID-19 DX) business, with first quarter results of Underscores the strength of the base business: Recent headwinds such as infant formula recalls continue to improve, along with macro pressures on supply and margins Given its growth profile (previous COVID-19 DX), diversified business mix, we remain positive on Abbott going forward, with continued post-COVID-19 opportunities for core margin expansion and net leverage are less than or equal to each other, creating optionality.”
Quantifying this stance, Furlong has an overweight (or buy) rating on ABT stock, with a price target of $133 suggesting the stock could rise by up to 23% over the next year. (To see Furlong’s achievements, click here)
Elsewhere on the street, the stock received an additional 11 buys, one hold and one sell, giving a consensus rating of ‘strong buy’. Following the average target of $123.79, the stock would rise 14% over the next few months. As an added bonus, the company also has a dividend that has increased regularly over the years. The current dividend is $0.51 and the yield is 1.78%. (look ABT Stock Prediction)
Johnson & Johnson (JNJ)
From a healthcare giant to an even bigger company. With a market cap of over $411 billion, Johnson & Johnson is one of the world’s largest healthcare companies. The company operates through his three business segments: pharmaceuticals, medical devices and consumer health.
In the Pharmaceuticals segment, Johnson & Johnson develops and markets a diverse portfolio of prescription medicines with a focus on areas such as oncology, immunology, neuroscience and infectious diseases. The company’s Medical Devices segment manufactures and markets a wide range of innovative medical devices, including surgical and orthopedic devices, cardiovascular products and diagnostics. In addition, Johnson & Johnson offers a variety of consumer healthcare products, including over-the-counter medicines, baby care products, oral care products, beauty and skin care brands.
In Q1 2023, the most recently reported quarter, the value proposition proved favorable for the company. The company’s revenue of $24.7 billion reflected a 5.6% year-over-year increase, beating his expectations by $1.09 billion. Additionally, adjusted EPS of $2.68 beat analyst expectations of $2.50.
Even better, the company has raised its outlook for both sales and earnings for fiscal 2023. In addition, the dividend also increased, rising 5.3% to $1.19 per share for him. His current dividend yield is 2.81%.
Tudor Jones comes in here with a purchase of 216,183 shares in the first quarter. This is his new JNJ position currently worth over $34.23 million.
Jones isn’t the only supporter of the JNJ cause. Kantar analyst Louise Chen praised the “Beat and Raise” quarter and praised the healthcare giant, which she thinks is undervalued.
“In our view, the strength and resilience of JNJ’s business unit remains underestimated. We continue to believe that expansion will be achieved through the factors mentioned above,” Cheng said. Market growth for major franchises should boost JNJ stock. ”
Those comments underpin Cheng’s overweight (or buy) rating, while her $215 top-of-the-street price target suggests the stock will rise 36% next year. (Click here to see Chen’s achievements)
Looking at the rating breakdown, analyst consensus rates the stock as a ‘moderate buy’, based on a total of 5 buys and 12 holds. Considering the average target amount is $179.52, the forecast sees him return 13.5% for the year. (look JNJ stock price forecast)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important to do your own analysis before making any investment.
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