Gates Wants to Team Up More With Bezos to Combat Climate Crisis

(Bloomberg) -- Bill Gates is aiming to work more closely with Amazon.com Inc. Chief Executive Officer Jeff Bezos to combat a climate crisis that the Microsoft Corp. co-founder said could dwarf the current pandemic in fatalities and global impact.“The deaths will just go up over time as you get more heat waves, forest fires and, most importantly, lose the ability to go outdoors and do farming anywhere near the equator,” Gates said in an interview with Bloomberg Television’s Emily Chang. His book, “How to Avoid a Climate Disaster,” went on sale earlier this month.Unlike the pandemic, it’s hard to get people to focus on catastrophes that may be decades away in enough time to avert them. “It's a real test of humanity to invest in advance for problems that come later,” Gates said. That’s part of where working with Bezos comes in — he’s pledged even more to combating climate change than Gates, $10 billion to a few billion for Gates — and Gates is hoping they can collaborate to back costly early-stage green alternatives to current technologies. In his book, Gates uses the concept of a “Green Premium,” the difference in price between a traditional, carbon emitting technology like a gas-powered car and its green alternative, an electric car. When the price of those newer technologies is too high for regular consumers or governments, people like Gates and Bezos can use their capital to spur demand and bring the prices down to a level suitable for everyone else. “The idea of how you create a demand side for these green products, even in the early stage where their green premium is very high, that's something I've realized is one of the missing pieces,” Gates said. “We want to bring companies and governments in on that but having a strong base of philanthropic capital to get it started would be fantastic.”Gates said he isn’t a fan of bitcoin, either for environmental reasons — it uses a lot of energy — or for individual investors not named Elon Musk. “Elon has tons of money and he's very sophisticated so I don't worry that his Bitcoin will sort of randomly go up or down,” he said “I do think people get bought into these manias who may not have as much money to spare, so I'm not bullish on Bitcoin, and my general thought would be that if you have less money than Elon you should probably watch out.”Gates, a long-time aficionado of fast-food burgers — much of his early Microsoft work was fueled by the nearby Burgermaster and he has sometimes been pictured waiting in line at Seattle’s Dick’s Burgers — has shifted half his patty consumption to plant-based products like Impossible Burger and Beyond Meat. As they improve further he expects that to increase but he isn’t completely ruling out beef. “Some people are trying to change the cow's diet or capture the methane, so you know I don't want to count the cow out,” Gates said. For more articles like...


Billionaire Ray Dalio Places Bet on 3 “Strong Buy” Stocks

When billionaire financier Ray Dalio makes a move, Wall Street pays attention. Dalio, who got his start working on the floor of the New York Stock Exchange trading commodity futures, founded the world’s largest hedge fund, Bridgewater Associates, in 1975. With the firm managing about $140 billion in global investments and Dalio’s own net worth coming at $17 billion, he has earned legendary status on Wall Street. Summing up his success, Dalio has three pieces of advice for investors. First, diversify. Keeping a wide range of stocks in the portfolio, from multiple sectors, is the surest way to invest well. Second, don’t think that rising markets will rise forever. This is Dalio’s variation on an old saw that past performance does not guarantee future returns. Dalio will tell you that all strong past returns really guarantee are current high prices. And finally, Dalio tells investors, “Do the opposite of what your instincts are.” Or put another way, don’t follow the herd, as such thinking frequently leads to suboptimal results. Looking to Dalio for investing inspiration, we used TipRanks’ database to find out if three stocks the billionaire recently added to the fund represent compelling plays. According to the platform, the analyst community believes they do, with all of the picks earning “Strong Buy” consensus ratings. Linde PLC (LIN) The first new position is in Linde, the world’s largest industrial gas production company, whether counting by revenues or market share. Linde produces a range of gasses for industrial use, and is the dominant supplier of argon, nitrogen, oxygen, and hydrogen, along with niche gasses like carbon dioxide for the soft drink industry. The company also produces gas storage and transfer equipment, welding equipment, and refrigerants. In short, Linde embodies Dalio’s ‘diversify’ dictum. Linde’s industry leadership and essential products helped the company bounce back from the corona crisis. The company’s revenues slipped in 1H20, but grew in the second half, reaching pre-corona levels in Q3 and exceeding those levels in Q4. In a sign of confidence, the company held its dividend steady through the ‘corona year,’ at 96 cents per common share – and in its recent Q1 declaration, Linde raised the payment to $1.06 per share. This annualizes to $4.24 and gives a yield of 1.7%. The key point here is not the modest yield, but the company’s confidence in the security of its positions, allowing it to keep a steady dividend at a time when many peers are cutting profit sharing. It’s no wonder, then, that an investor like Dalio would take an interest in a company like Linde. The billionaire’s fund snapped up 20,149 shares during the fourth quarter, worth $5.05 million at current prices. Assessing Linde for BMO, analyst John McNulty expresses his confidence in Linde’s current performance. “LIN continues to execute on its growth strategy to drive solid double-digit earnings growth, notably without requiring a further macro improvement. In our view, management’s 11-13% guide for 2021 remains conservative driven by its on coming projects, continued pricing, efficiency gains, and solid buybacks with its strong balance sheet and cash flows. Further, the solid FCF position provides them plenty of dry powder for M&A, de-caps, etc. We believe LIN is poised to continue to surprise investors and outperform the broader group even in a cyclical market. the largest global industrial gas company,” McNulty opined. In line with his bullish comments, McNulty rates LIN as a Buy, and his $320 price target implies an upside of ~28% for the coming year. (To watch McNulty’s track record, click here) Wall Street’s analysts are in broad agreement on the quality of Linde’s stock, as shown by the 15 Buy reviews overbalancing the 3 Holds. This gives the stock its Strong Buy analyst consensus rating. Shares are priced at $250.88, and their $295.73 average price target suggests they have ~18% growth ahead. (See LIN stock analysis on TipRanks) BlackRock (BLK) Next up is the world’s largest asset manager. BlackRock has over $8.67 trillion in assets under management. The company is one of the dominant index funds in the US financial scene, and saw $16.2 billion revenue last year, with a net income of $4.9 billion. BlackRock’s recent Q4 report shows its strength, as far as numbers can. EPS came in at $10.02 per share, a 12% sequential gain and a 20% year-over-year gain. Quarterly revenues of $4.8 billion were up 17% yoy. The full-year top line was up 11% from 2019. BlackRock achieved all of this even as the corona crisis flattened the economy in 1H20. In the first quarter of this year, BlackRock declared its regular quarterly dividend, and raised the payment by 13% to $4.13 per common share. At an annualized payment of $16.52, this gives a yield of 2.3%. The company has kept the dividend reliable for the past 12 years. Not wanting to miss out on a compelling opportunity, Dalio’s fund pulled the trigger on 19,917 shares, giving it a new position in BLK. The value of this new addition? More than $14 million. Covering BLK for Deutsche Bank, analyst Brian Bedell writes, “We view 4Q results as very good with strong long-term net inflows across its products which we expect to continue despite a one-time, $55bn pension fund outflow of low-fee equity index assets expected in 1H21 which mgmt. said would have a minimal impact on base fee revenue. Additionally, total net inflows drove annualized organic base management fee growth of 13%, a quarterly record, on annualized long-term organic AuM growth of 7%. We expect organic base fee growth to exceed organic AuM growth coming into 2021 driven by a flow mix skewed toward higher fee-rate products for now.” To this end, Bedell rates BLK a Buy and his $837 price target suggests the stock has ~18% upside ahead of it. (To watch Bedell’s track record, click here) The analyst consensus tells a very similar story. BLK has received 6 Buy ratings in the last three months, against a single Hold – a clear sign that analysts are impressed with the company’s potential. Shares sell for $710.11, and the average price target of $832.17 gives the stock a 17% upside potential. (See BLK stock analysis on TipRanks) AbbVie, Inc. (ABBV) AbbVie is a major name in the pharma industry. The company is the maker of Humira, an anti-inflammatory used in the treatment of a wide range of chronic illnesses including rheumatoid arthritis, Crohn’s disease, and psoriasis. The company’s other immunology drugs, Skyrizi and Rinvoq, were approved by the FDA in 2019 as treatments for psoriasis and rheumatoid arthritis, respectively, and saw combined sales of $2.3 billion last year. AbbVie expects that these drugs will ‘fill the gap’ in profits when the Humira patents expire in 2023, with up to $15 billion in sales by 2025. Humira is currently the main driver of AbbVie’s immunology portfolio, and provides $19.8 billion of the portfolio’s $22.2 billion in annual revenues, and a significant part of the company’s total sales. For the full year 2020, across all divisions, AbbVie saw $45.8 billion in revenues, with an adjusted diluted EPS of $10.56. In addition to its high-profile anti-inflammatory line, AbbVie also has a ‘stable’ of long-established drugs on the market. As an example, the company owns Depakote, a common anti-seizure medication. AbbVie also maintains an active research pipeline, with scores of drug candidates undergoing studies in the disciplines of immunology, neuroscience, oncology, and virology. For investors, AbbVie has a long-standing commitment to returning profits to shareholders. The company has an 8-year history of keeping a reliable – and growing – dividend. In the most recent declaration, made this month for a payment to go out in May, AbbVie raised the dividend 10% to $1.30 per common share. At $5.20 annualized, this gives a yield of 4.9%. Once again, we are looking at stock that embodies some of Dalio’s advice. Pulling the trigger on ABBV in the fourth quarter, Dalio’s firm purchased 25,294 shares. At current valuation, this is worth $2.66 million. Leerink analyst Geoffrey Porges covers ABBV, and is impressed with the way that the company is preparing in advance for the loss of US exclusivity on its best-selling product. “Between ABBV’s ex-Humira portfolio’s growth trajectory and a broad portfolio of catalysts across early-, mid-, and late-stage assets, it is hard to find a biopharma company that is better positioned, even with their looming LOE. ABBV is prepared for 2023, and has growth drivers to drive better than industry average top- and bottom-line growth in the period before (2021-2022) and after (2024-2028) 2023,” Porges opined. Porges gives ABBV an Outperform (i.e. Buy) rating, and sets a $140 price target that indicates room for a 33% one-year upside. (To watch Porges’ track record, click here) Overall, there are 10 reviews on ABBV shares, and 9 of those are to Buy – a margin that makes the analyst consensus rating a Strong Buy. The stock is trading for $105.01 and has an average price target of $122.60. This suggests an upside of ~17% over the next 12 months. (See ABBV stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched 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.

Read More