If you’re gonna be known for something, then being known as The Man Who Broke the Bank of England is not a bad one. That accolade is one claimed by George Soros, who in 1992 famously bet against the British pound, a move that pocketed the Hungarian American investor a profit exceeding $1 billion.
That represents the most headline-grabbing act of Soros’ investing endeavors but is merely a detail in a long and storied career that has netted Soros a personal fortune of ~$6.7 billion.
While the billionaire doesn’t directly run his Soros Fund Management any longer, Soros is recognized as an investing legend for good reason so it’s always worth keeping an eye on the names being scooped up by a firm which boasts $28 billion in net assets under management.
With this in mind, we took a closer look at two stocks the Soros fund has been loading up on recently. And it looks like Soros is not the only one showing confidence in these names. According to the TipRanks database, both are rated as Strong Buys by the analyst consensus. Let’s see why they are drawing plaudits across the board.
GFL Environmental (GFL)
One of Soros’ most famous quotes is that “good investing is boring,” so it’s only fitting that the first stock we’ll look at operates in the glamorous environs of waste management.
Enter GFL Environmental, a company specializing in a wide array of environmental services, including solid waste management, liquid waste management, and soil remediation. GFL (stands for “Green for Life”) operates across Canada and the US, serving residential, commercial, and industrial customers with a focus on reducing the environmental impact of waste and promoting recycling and reuse.
Over the years, GFL has grown rapidly through strategic acquisitions and organic growth, positioning itself as one of the largest environmental services companies in North America.
In its last reported quarter, GFL reported total revenues of C$1.8 billion, a haul that was roughly flat year-over-year and came in just ahead of the consensus estimate of C$1.78 billion.
On the profitability profile, adj. EBITDA beat Street expectations, showing C$456 million vs. the Street’s C$441 million forecast. Accounting for the outperformance, looking ahead, the company raised its 2024 EBITDA guide from the prior C$2.215 billion to C$2.23 billion.
Meanwhile, the Soros fund opened a new GFL position during Q1, loading up on 580,336 shares. These are currently worth about $18 million.
The company also has a fan in Truist analyst Tobey Sommer, who counts GFL as his preferred stock in the waste business.
“GFL remains our favorite name in the Industrial Services group with discount valuation poised to close as margins, FCF conversion and leverage converge to peer averages over the next 2-3 years,” the 5-star analyst said. “We see an asymmetric risk/reward profile with limited downside risk to ’24/’25 estimates, pessimistic investor sentiment reflected by a 20-25% valuation discount to peers and as much as ~70% upside in our Bull Case scenario. We think further multiple compression would be required to drive significant downside in the stock and peer valuation discount is near the historical peak since the 2020 IPO.”
Accordingly, Sommer, who ranks amongst the top 2% of Street stock pros, rates GFL shares a Buy, while his $46 price target factors in returns of ~49% from current levels. (To watch Sommer’s track record, click here)
Almost all of Sommer’s colleagues agree. Barring one skeptic showing a Hold rating, all 9 other analyst reviews are also positive, making the consensus view here a Strong Buy. Going by the $43.94 average price target, a year from now, the shares will be changing hands for a 42% premium. (See GFL stock forecast)
Matador Resources (MTDR)
For the next Soros pick we’ll turn from waste to energy for a look at Matador Resources, an independent energy company focused on the exploration, development, and production of oil and natural gas resources in the US.
This company also represents a new investment for Soros fund, which bought 225,000 shares in Q1; based on the stock’s current price, these holdings are worth ~$14 million.
Based in Dallas, Texas, Matador operates primarily in the Delaware Basin, a part of the prolific Permian Basin, which spans West Texas and southeastern New Mexico. The company focuses on strategic acquisitions, efficient operations, and technological nous to enhance its resource base and production capabilities. Matador’s integrated business model also includes midstream services through its subsidiary, San Mateo Midstream (a joint venture with Five Point Energy), which provides gathering, processing, and disposal services for hydrocarbons and water.
Boosted mainly by better-than-anticipated three-stream production, Matador’s Q1 results beat expectations on both the top-and bottom-line. Revenue rose by 40.6% vs. the same period last year, climbing to $787.69 million and outpacing analyst expectations by $46.29 million. At the other end of the spectrum, adj. EPS of $1.71 beat Wall Street’s forecast by $0.18. Given the strong display, the company now anticipates full-year production will come in at the high end of its previously announced average production outlook.
Truist Securities analyst Neil Dingmann, whose stock recommendations have also positioned him amongst the top 2% on Wall Street, applauds Matador’s achievements, noting: “Matador continues to put up solid results with the recent boost in 24′ production guidance while maintaining capital spend guidance unchanged. We are not surprised nor concerned with seasonal operational and financial lumpiness given the company’s propensity to focus on the most optimal D&C results. We would not be surprised if MTDR added a few incremental moderate sized assets or a single large acquisition given its solid current financial position and ability to continue to fill in white space. We forecast a notable step-up in 2Q24 activity that should continue into ’25.”
To this end, Dingmann rates MTDR shares a Buy, backing it up with an $87 price target. Should the figure be met, investors will be pocketing returns of ~40% a year from now. (To watch Dingmann’s track record, click here)
This is another stock with almost unanimous support from the analyst community. Based on a mix of 9 Buys against 1 Hold, MTDR receives a Strong Buy consensus rating. The forecast calls for 12-month returns of 29%, considering the average target clocks in at $78.11. (See MTDR stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
