Investing

Billionaire Sells Palantir Stock and Buys This Stock That Could Soar 64% According to a Wall Street Expert

Rich Duprey

Published: January 21, 2025 7:30 am

Billionaire investor Ken Griffin is the founder of Citadel Advisors, one of the world’s most successful alternative investment firms. With over $96 billion in assets under management (AUM), Griffin’s hedge fund is broadly diversified with positions in more than 5,705 stocks. It ensures no one position assumes an overly dominant hold over the portfolio.

However, the hedge fund operator dumped Palantir Technologies (NASDAQ:PLTR) stock en masse last quarter, shedding over 5.1 million shares valued at around $158 million, or over 91% of his holdings at the time. You could say it was poor timing. While Griffin sold the stock at an average price of $31.27 per share, it has since gone on to more than double in value and today trades at just under $72 a share. Oof! 

In its place, though, Griffin was buying Biogen (NASDAQ:BIIB) hand over fist, acquiring more than 372,000 shares of the biotech at a cost of $72 million. It was a completely new position for the hedge fund. Although it’s still a small percentage of the total portfolio (0.08%), Griffin is sitting on a 34% loss so far. Double oof.

Still, Wall Street sees 63.6% upside in BIIB stock, so let’s see if this is a time investors should consider buying in at a better price than the smart money got.

24/7 Wall St. Key Points:

• Ken Griffin sold off nearly his entire stake in Palantir Technologies (PLTR) and used a portion of the proceeds to buy Biogen (BIIB).
• The beaten down biotech is facing intense competitive pressure in its key target markets, and the Trump presidency introduces new uncertainty into the healthcare market.
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On a downward slide

Biogen is having a rough year, with shares sliding 44% from the 52-week high. Its leading multiple sclerosis (MS) treatment loss patent protection creating revenue pressure from branded competition, generics, and biosimilars. It has expanded into new markets, including Alzheimer’s, but the market is volatile.

It partnered with Eisai (OTC:ESALY) to introduce Leqembi to treat the disease in the U.S., Japan, and China, but last summer Europe denied its request to market the drug. Yet its blockbuster drug Spinraza, which treats the rare neuromuscular disease spinal muscular atrophy, or SMA, is still generating over $1.15 billion in sales over the first three quarters of 2024, though that’s down 13% from the year-ago period.

Similarly, its MS therapy Tysabri produced $1.3 billion in sales year-to-date, but they’re also down 8% year-over-year. Still, Biogen has a solid portfolio, with treatments for postpartum depression (Zurzuvae) and Friedreich’s Ataxia, a rare neurological disorder (Skyclarys) bolstering its pipeline drugs for Parkinson’s, lupus, and tau-targeting Alzheimer’s therapy (BIIB080).

Uncertainty rules the day

Offsetting some of Biogen’s competitive pressures are tailwinds that could boost the biotech. 

Donald Trump’s second term as president could roil the industry, particularly if Robert F. Kennedy Jr. is confirmed as secretary of the Health & Human Services Dept. Along with other HHS appoints such as Dr. Oz at the Centers for Medicare and Medicaid Services, Dr. Marty Makary at the Food & Drug Administration, and Dr. Jay Bhattacharya at the National Institutes of Health, the healthcare industry is ripe for disruption.

It’s possible Trump could repeal the Medicare negotiation provision of the Inflation Reduction Act, minimize Federal Trade Commission interference in mergers and acquisitions, and lower corporate taxes. All those, however, would benefit everyone equally, so Biogen wouldn’t derive any special value from them.

It means Biogen may have to rely upon acquiring new therapies to help ignite growth. Its long dominance in MS is being chipped away while other treatments are growing, but won’t likely be blockbusters.

Key takeaway

Biogen stock is cheap, but maybe deservedly so. Shares trade at 12 times earnings, 8 times estimates, and a discounted 10 times the free cash flow it produces. Analysts are only expecting earnings to grow 4% annually for the next five years, but BIIB stock may have been devalued enough to warrant taking a position in hopes for a turnaround.