Between earnings season and an endless parade of economic data, there’s a good chance you missed what just might be the most important data release of the quarter. Feb. 14 marked more than just Valentine’s Day. It was also the Form 13F filing deadline for institutional investors and ultra-wealthy individuals with $100 million or more in assets under management.

A 13F allows investors a detailed look at what the smartest investors on Wall Street were buying, selling, and holding in the most recent quarter. Despite having their flaws — e.g., 13Fs provide a portfolio snapshot that can be more than six weeks old — 13Fs are valuable in the sense that they can clue investors into the stocks, trends, sectors, and industries garnering the attention of Wall Street’s most-successful investors.

Based on the latest round of 13Fs covering trading activity during the fourth quarter, some billionaire money managers were actively bottom-fishing beaten-down growth stocks. Although the following three supercharged growth stocks are down between 89% and 97% from their respective all-time highs, billionaires simply can’t stop buying shares in these companies.

Rivian Automotive: 89% below its all-time high
The first supercharged growth stock billionaire money managers can’t seem to get enough of is electric-vehicle (EV) manufacturer Rivian Automotive (RIVN). Despite Rivian’s stock declining 89% from its record intraday high set in November 2021, billionaires Ken Griffin of Citadel Advisors and Stephen Cohen of Point72 Asset Management were active buyers in the fourth quarter. Griffin’s and Cohen’s funds respectively purchased around 4.06 million and 1.95 million shares.

Although Rivian didn’t go public until November 2021, it put itself on the EV map and legitimized its operations back in September 2019. That’s when it landed a 100,000-electric delivery van order from e-commerce giant Amazon. This order, which is expected to be fulfilled by 2030, should provide Rivian with consistent operating cash flow throughout the decade, assuming it can ramp up production.

Rivian’s R1T electric pickup is another reason optimists are excited about the company’s prospects. Even though legacy automakers are taking orders for the electrified versions of their heavy-duty best-selling trucks, the R1T is effectively in a class of its own. It’s fully capable of going off-road but is a luxury pickup. Sliding into the luxury niche should minimize competition, as long as Rivian doesn’t price potential customers out of a purchase.

Assuming supply chain disruptions are minimized, Wall Street believes Rivian can triple its full-year sales in 2023.

But Rivian is anything but risk-free. It’s losing a staggering amount of money on the EVs it’s currently producing and is spending an aggregate of $5 billion to build a manufacturing plant in Georgia, which is slated to open sometime next year. The company’s eyebrow-raising rate of cash burn — cash and cash equivalents fell by $4.9 billion through the first nine months of 2022 — leaves the door open for a potentially dilutive capital raise.

Teladoc Health: 90% below its all-time high
A second high-octane growth stock that’s been absolutely clobbered but is, nevertheless, sought after by billionaire investors is Teladoc Health (TDOC). In spite of a 90% decline from its record high set two years ago, billionaires Israel Englander of Millennium Management and Jeff Yass of Susquehanna International were big buyers during the fourth quarter. Englander’s fund scooped up nearly 2.31 million shares, while Yass’s fund added close to 280,000 shares.

One of the lures of healthcare stocks during a bear market is that the sector is highly defensive. It doesn’t matter how high inflation goes or how poorly the U.S. economy performs; people will still need prescription drugs, medical devices, and an assortment of healthcare services in any economic environment.

The excitement surrounding Teladoc has to do with the company completely reshaping how personalized care is administered. In situations where a virtual visit makes sense, it’s far more convenient for patients than trekking to a local doctor’s office or hospital.

Likewise, telehealth allows physicians to keep better tabs on patients with chronic illnesses. The expectation is for telehealth services to improve patient outcomes and reduce out-of-pocket expenses for health insurers. Anything that reduces costs for insurers is something they’re bound to promote.

However, the biggest near-term catalyst for Teladoc Health is simply putting a handful of goodwill impairment charges tied to its $18.5 billion acquisition of applied health signals company Livongo Health in the back seat. Following two mammoth write-downs in 2022, Teladoc should be focused on cleaner operating results and a smaller net loss in 2023 (note: this was written prior to Teladoc reporting its fourth-quarter results on Feb. 22).

But just like Rivian Automotive, Teladoc Health isn’t a slam-dunk investment. The company will need to show Wall Street and investors that it can push toward profitability, as well as capitalize on its Livongo acquisition by cross-selling its solutions and continuing to add chronic-care subscribers. This is a prove-it year for Teladoc and its management team.

Novavax: 97% below its all-time high
The third supercharged growth stock billionaire investors can’t stop buying is biotech stock Novavax (NVAX). Even though Novavax has lost 97% of its value since February 2021, we witnessed billionaires Jim Simons of Renaissance Technologies, Israel Englander of Millennium Management, and John Overdeck and David Siegel of Two Sigma Investments pile in during the fourth quarter. These billionaires respectively oversaw the purchase of approximately 1.94 million shares, 1.02 million shares, and 1.01 million shares of Novavax stock.

The buzz surrounding Novavax originates from the company’s work on a COVID-19 vaccine during the pandemic. Whereas the Pfizer/BioNTech and Moderna COVID-19 vaccines are messenger-RNA based, Novavax’s vaccine (NVX-CoV2373) is protein based and relies on a more time-tested method of teaching the body’s immune system to fight infection.

Another interesting aspect to NVX-CoV2373 is its vaccine efficacy (VE). Novavax joins Pfizer/BioNTech and Moderna as the only drug developers to reach the psychologically important 90% VE level in late-stage COVID-19 trials. On paper, this gives Novavax a genuine shot to become a leading provider of booster shots or initial-series vaccines (outside the U.S.).

Novavax is also well capitalized, with $1.28 billion in cash and cash equivalents in its coffers (as of Sept. 30, 2022) prior to a $250 million capital raise in December 2022. With the company’s drug-development platform now proven effective, this should give Novavax plenty of runway to fund clinical trials involving influenza, combination vaccines involving influenza and COVID-19, and respiratory syncytial virus (RSV).

But like the other stocks mentioned, Novavax will have to prove itself to Wall Street. Management has delayed Emergency Use Authorization filings and endured production issues with NVX-CoV2373, causing the company to miss out on billions of dollars in revenue in 2021-2022. Novavax will need wins from its vaccine pipeline to put skeptics in their place.

— Sean Williams

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Source: The Motley Fool