25 Top Stock Picks That Billionaires Love
Billionaire investors were busy during the second quarter of 2021. Here are 25 companies, of various shapes and sizes, that were some of their most recent top stock picks.
It's always interesting to see what billionaire investors are doing with their money. Sure, you can't match their gains simply by copying every single one of their stock picks, but it can still be helpful (and fruitful) to know what they've been up to.
Consider that the billionaires, hedge funds and big-time advisories listed below have a great deal at stake. And their resources for research, as well as their intimate connections to insiders and others, can give them unique insight into their stock picks.
Studying which stocks they're chasing with their capital (or which stocks the billionaires are selling off, for that matter) can be an edifying exercise for retail investors.
After all, there's a reason the rich get richer.
Here are 25 of the most recent top stock picks from the billionaire class. In each case, at least one billionaire – be it a person, hedge fund or advisory – has a substantial stake and/or added to its holdings. In most cases, these stocks are owned by multiple billionaire investors and billionaire investor firms. And while several of these investments are popular blue chips, others keep a much lower profile.
Either way, the smart money isn't kidding around when it comes to these stock picks.
Prices are as of Sept. 8. Data is courtesy of S&P Global Market Intelligence, WhaleWisdom.com and regulatory filings made with the Securities and Exchange Commission. Stocks are ranked in reverse order of their weight in the selected billionaire investor's equity portfolio.
- Market value: $411.2 billion
- Billionaire investor: Ray Dalio (Bridgewater Associates)
- Percent of portfolio: 4.7%
Ordinarily, we look for stocks that account for at least 5% of a billionaire investor's portfolio before including them on this list, but Bridgewater Associates' interest in Walmart (WMT, $147.46) is sort of a special case.
Legendary investor Ray Dalio's massive hedge fund – it has $223 billion in assets under management (AUM) – has 5.4% of its portfolio sitting in an S&P 500 index fund. Indeed, the SPDR S&P 500 ETF (SPY), with its 0.0945% expense ratio, is Bridgewater's largest holding.
So it's something of a feather in Walmart's cap that the world's largest retailer and Dow Jones Industrial Average component happens to be tops among Dalio's actual stock picks.
Indeed, in the first quarter of 2021, Bridgewater upped its WMT stake by 45%, or 1.6 million shares. The fund's total stake of 5.2 million shares, worth $736.5 million at the end of Q2, now accounts for 4.7% of its total equity portfolio value.
Note well that Dalio, whose net worth is estimated at $20 billion, according to Forbes, is a big fan of Dow stocks and ETFs. In addition to WMT at No. 2, Bridegwater's top 10 holdings include stakes in Procter & Gamble (PG), Coca-Cola (KO), Johnson & Johnson (JNJ) and McDonald's (MCD), as well as the aforementioned SPY ETF and the Vanguard FTSE Emerging Markets ETF (VWO).
- Market value: $184.9 billion
- Billionaire investor: Chase Coleman III (Tiger Global Management)
- Percent of portfolio: 5.1%
Hedge-fund legend Chase Coleman III, with a net worth of $10.3 billion, according to Forbes, upped his bet on Sea (SE, $343.80) in the second quarter of 2021.
Coleman's Tiger Global Management ($79.1 billion AUM) increased its stake in Sea by 6%, or 643,000 shares, during the quarter ended June 30. The hedge fund now owns a total of 10.1 million shares worth $2.8 billion as of the end of Q2.
Sea, which provides digital gaming, e-commerce and digital financial services primarily in Southeast Asia and Latin America, is now Tiger's third-largest position after JD.com (JD) and Microsoft (MSFT).
Tiger first bought SE in the first quarter of 2018, and it has been a massive outperformer, to say the least. Shares are up 2,950% since the end of March 2018, vs. a gain of 71% for the S&P 500.
Coleman clearly sees even more upside ahead, and Wall Street analysts couldn't agree more. Their consensus recommendation stands at Strong Buy, per S&P Global Market Intelligence, and with high conviction at that. Indeed, of the 23 analysts issuing opinions on Sea – which trades on the New York Stock Exchange via American depositary receipts (ADRs) – 16 rate it at Strong Buy.
23. Gaming and Leisure Properties
- Market value: $11.9 billion
- Billionaire investor: Gates Capital Management
- Percent of portfolio: 5.2%
Gates Capital Management is a fan of one of the Street's favorite recovery stocks. The New York hedge fund with $3 billion in AUM once again upped its stake in Gaming and Leisure Properties (GLPI, $50.92), albeit at a slower pace than it did so in Q1.
The hedge fund added another 22,975 shares in the casino real estate investment trust (REIT) in Q2 – an increase to its position of less than 1%. That followed the purchase of 1 million shares, or a 35% bump to the position, in the first quarter of 2021.
Gates Capital now holds more than 3.9 million shares in GLPI – a holding worth $181.8 million as of June 30.
Analysts are big fans of GLPI thanks to both a snazzy dividend yield and attractive growth prospects as we ease our way out of the pandemic. The REIT's properties – including the Belle of Baton Rouge in Louisiana and Argosy Casino Hotel & Spa in Missouri – are benefiting from a rush of gamblers returning to casinos.
The Street's Strong Buy consensus recommendation makes it easy to understand why Gates Capital continues to increase exposure to a stock it first bought back in 2013. The hedge fund holds nearly 1.7% of GLPI's shares outstanding, making it the REIT's 10th largest investor.
- Market value: $49.7 billion
- Billionaire investor: Paul Singer (Elliott Investment Management)
- Percent of portfolio: 5.3%
Famously combative hedge fund legend Paul Singer's Elliott Investment Management greatly increased its bet on Twitter (TWTR, $62.27) in the second quarter.
The West Palm Beach, Florida-based fund with $73.5 billion in AUM bought another 3 million shares in the social-media platform, a 42% increase to its stake. Elliott now holds an even 10 million shares in TWTR, worth $688.1 million as of June 30.
At 5.3% of the portfolio, TWTR is the hedge fund's fourth-largest position. The stake also represents 1.3% of Twitter's shares outstanding, making Elliott the company's 13th largest shareholder.
The hedge fund first bought TWTR in the first quarter of last year. Shares are up about 153% since the end of March 2020, vs. a gain of 75% for the broader market.
For the year-to-date, however, Twitter stock is actually lagging the broader market by about 5 percentage points, and the Street projects no better than market-matching performance in the months ahead. Analysts' consensus recommendation stands at Hold, according to S&P Global Market Intelligence.
Singer, with an estimated net worth of $4.3 billion, is perhaps best known for his 15-year battle with the government of Argentina over sovereign debt payments. He eventually prevailed, walking away with $2.4 billion in 2016.
- Market value: $316.0 billion
- Billionaire investor: Suvretta Capital Management
- Percent of portfolio: 5.6%
Analysts are highly bullish on Adobe (ADBE, $663.22) and so is Suvretta Capital Management. The New York hedge fund with AUM of $7.9 billion topped off its No. 1 holding in Q2, adding another 1,909 shares.
True, that represents a less than 1% increase to the fund's stake, but it's a vote of confidence in the software juggernaut nonetheless. Indeed, it was just enough of a buy to maintain ADBE's position as Suvretta's largest holding.
The hedge fund now owns 634,813 shares, which were worth $371.8 million at the end of the second quarter. Suvretta first bought Adobe stock in the fourth quarter of 2013, and it can't be disappointed with the bet. After all, shares in Adobe are up more than 1,000% since the end of 2013, vs. a gain of 144% for the S&P 500.
The Street tends to be heavily bullish on the name too, thanks to ADBE's dominance in its field. With an arsenal that includes Photoshop, Premiere Pro for video editing and Dreamweaver for website design, Adobe is the undisputed leader in making software for designers and other creative types
Shares are up by a third for the year-to-date, outpacing the broader market by more than 12 percentage points, and the Street sees more where that came from. Analysts' consensus recommendation stands at Buy, with high conviction. Indeed, of the 28 analysts issuing opinions on ADBE, 16 call it a Strong Buy.
20. UnitedHealth Group
- Market value: $391.7 billion
- Billionaire investor: Sanders Capital
- Percent of portfolio: 5.9%
As the largest health insurer by both market value and revenue – and a member of the Dow Jones Industrial Average to boot – UNH is sort of a must-have stock for institutional investors seeking broad exposure to the healthcare sector.
Meanwhile, analysts' consensus recommendation on the name stands just shy of Strong Buy. Of the 26 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 17 rate UNH at Strong Buy, five say Buy, three have it at Hold and one calls it a Sell.
"We believe UNH is well positioned by virtue of its diversification, strong track record, elite management team and exposure to certain higher growth businesses," writes Oppenheimer analyst Michael Wiederhorn, who rates shares at Outperform (the equivalent of Buy).
So it's only fitting that Sanders Capital, a New York hedge fund with $64.2 billion in AUM, upped its stake in UNH by 5%, or 314,995 shares, during the second quarter.
The fund's stake, now totalling almost 6.5 million shares, was worth $2.9 billion as of June 30. That accounts for 5.9% of the portfolio, making it Sanders' fifth-largest position.
Sanders first bought UNH in the fourth quarter of 2010. And since Dec. 31, 2010, those shares have rocketed by more than 1,000%, vs. a 259% gain for the broader market.
- Market value: $755.2 billion
- Billionaire investor: Andrew Law (Caxton Associates)
- Percent of portfolio: 6.2%
Bruce Kovner, with an estimated net worth of $6.2 billion, retired from the hedge fund he founded a decade ago, but Caxton Associates still benefits from its close association with his legendary name.
Meanwhile, Kovner's successor Andrew Law is hardly a pauper himself. His own net worth is estimated at around $1 billion, thanks to his major ownership stake in Caxton and its $25.7 billion in AUM.
As for Law's interest in Tesla (TSLA, $753.87), perhaps it's an example of billionaire "game knows game." Elon Musk, the electric vehicle maker's founder and CEO, is worth something like $196 billion, according to Forbes. Apparently Law – and certainly the Street – expects that figure to keep going up.
Caxton, with offices in London, New York, Singapore and Princeton, N.J., initiated a stake in the electric vehicle stock in the second quarter of 2021, buying 82,468 shares worth $56 million. The new investment immediately became the fund's fifth-largest position, accounting for 6.2% of its portfolio value.
And if we're splitting hairs here, Tesla actually counts as Caxton's fourth-largest stock holding. The fund's top position, at 9.4% of the portfolio, isn't a normal equity holding – it's $86 million worth of put options on the iShares Russell 2000 ETF (IWM).
The Street's consensus recommendation on TSLA stands at Hold, which means analysts as a group think shares will only match the broader market's performance over the next 12 months or so. That said, they expect the company to generate average annual earnings per share (EPS) growth of 39% over the next three to five years.
Should that come to pass, both Law and Musk will almost certainly add to their respective fortunes.
- Market value: $141.3 billion
- Billionaire investor: Soroban Capital Partners
- Percent of portfolio: 7.0%
Soroban Capital Partners must feel pretty good about the outlook for the housing market. After all, the New York hedge fund upped its stake in Lowe's (LOW, $204.09) by 36%, or 1.1 million shares, in Q2.
Soroban, with $11.9 billion in AUM, owns a total of 4.3 million shares in the nation's second-largest home improvement retailer after Home Depot (HD). With a value of $826.9 million as of June 30, LOW is the fund's fourth-largest holding.
Like Home Depot, LOW benefited greatly from the work-from-home/stuck-at-home reality of pandemic life. Analysts say many of the do-it-yourself habits consumers adopted during COVID times are here to stay.
The Street gives LOW a consensus recommendation of Buy, with high conviction. Indeed, of the 32 analysts covering the stock tracked by S&P Global Market Intelligence, 19 rate it at Strong Buy.
CFRA Research analyst Kenneth Leon is among the analysts who view Lowe's as a Buy, citing strength across the company's business segments.
"We believe there is a secular shift in consumer spending to the home from travel, live events and restaurants that will benefit home improvement and LOW's intermediate earnings outlook," Leon writes. "The Do-It-Yourself segment showed strong sales in the most recent quarter, and we think the PRO segment (contractors) is gaining momentum."
Income investors know the power of Lowe's dividend over the longer haul. The company is a member of the S&P 500 Dividend Aristocrats – a list of firms that have increased their dividends annually for at least 25 consecutive years.
In LOW's case, it's paid a cash distribution every quarter since going public in 1961, and has raised the dividend annually for nearly six decades. The most recent increase came with the August payment – a 33% jump in the quarterly dividend to 80 cents per share.
- Market value: $19.9 billion
- Billionaire investor: Seth Klarman (Baupost Group)
- Percent of portfolio: 8.3%
Legendary value investor Seth Klarman's patience with Qorvo (QRVO, $178.76) finally started to pay off in 2020 after years of volatile underperformance. And although shares in the semiconductor manufacturer remain subject to wide price swings, that didn't stop the billionaire from buying even more QRVO in Q2.
Klarman's Baupost Group hiked its stake in Qorvo by 2%, or 110,000 shares, during the quarter ended June 30.
The Boston-based hedge fund with $32 billion in AUM initiated the position way back in the first quarter of 2017 – and it was mostly a dud. QRVO underperformed the broader market for the better part of the next three years, all while trading with relatively much high volatility.
But Klarman didn't amass an estimated fortune of $1.5 billion by being impulsive.
It turns out that QRVO hit an inflection point during the pandemic stock market crash, and has been screaming higher pretty much ever since. Indeed, shares have outpaced the S&P 500 by about 56 percentage points since the benchmark index bottomed out on March 23, 2020.
Baupost now holds a total of 5.3 million QRVO shares, worth more than $1 billion at the end of Q2. That makes it the hedge fund's fourth-largest position. At the same time, with 4.8% of Qorvo's shares outstanding, Baupost is the company's third-largest stockholder, behind only Vanguard and BlackRock (BLK).
The Street is bullish on the chipmaker too, giving it a consensus recommendation of Buy, with fairly strong conviction. Of the 27 analysts issuing opinions on QRVO tracked by S&P Global Market Intelligence, 12 rate it at Strong Buy and seven say Buy.
- Market value: $1.1 trillion
- Billionaire investor: Polen Capital Management
- Percent of portfolio: 8.7%
Polen Capital Management's top four stock picks are a who's who of hot-growth, mega-cap tech stocks: Facebook (FB, $377.57), Microsoft (MSFT), Google-parent Alphabet's Class C shares (GOOG) and Adobe (ADBE).
But the Boca Raton, Florida-based hedge fund is a Facebook fanboy above all else. It added another 489,542 shares in Q2 – good for a 3% increase to its stake – to ensure that the world's largest social network would remain its top holding.
Polen Capital, with AUM of $46 billion, now holds nearly 13 million shares in FB, worth $4.5 billion as of June 30. Yet that still only makes the hedge fund Facebook's 25th largest stockholder, at a little less than 0.5% of shares outstanding.
Polen Capital initiated its FB position in the second quarter of 2015, and it has been a massive outperformer ever since. Shares in FB are up 340% since the end of June 2015, while the S&P 500 has gained 119%.
The Street is plenty bullish on Facebook, too, giving FB stock a consensus recommendation of Buy, with high conviction. Of the 48 analysts issuing opinions on the stock, 31 call it a Strong Buy, seven say Buy, eight have it at Hold, one says Sell and one rates it at Strong Sell.
Although the more cautious analysts raise concerns about the stock's valuation, there's no doubting the company's outsized profit potential. The Street expects FB to generate average annual EPS growth of more than 22% over the next three to five years.
15. Abbott Laboratories
- Market value: $228.8 billion
- Billionaire investor: BlueSpruce Investments
- Percent of portfolio: 8.9%
Abbott Laboratories (ABT, $129.06) is as stalwart a divided-growth stock as they come. It's a member of the S&P Dividend Aristocrats, having increased its payout for 49 consecutive years. The last increase came in December: a whopping 25% improvement to 45 cents per share per quarter.
ABT, which manufactures a wide variety of healthcare goods, such as branded generic drugs, medical devices and nutrition and diagnostic products, is lagging the broader market for the year-to-date, but much of the Street still likes the name at current levels.
BlueSpruce Investments certainly liked it in Q2.
The Chicago hedge fund with $5.3 billion in assets more than tripled its stake in the healthcare firm, adding more than 3 million shares. ABT now stands as the fund's sixth-largest bet.
The latest buys give BlueSpruce a total of 4.2 million shares in Abbott, worth $488.6 million as of Q2's end. With 0.24% of the company's shares outstanding, the hedge fund is a top-50 Abbott Labs shareholder.
The Street likewise gives ABT a thumbs-up. Analysts have a consensus recommendation of Buy, citing the company's growth prospects coming out of the pandemic, which hurt sales of medical devices as patients delayed elective procedures.
"In a COVID-19 recovery, we believe the stage is set for improving top- and bottom-line performance for years ahead," writes Stifel analyst Rick Wise, who rates shares at Buy.
14. Domino's Pizza
- Market value: $19.2 billion
- Billionaire investor: Bill Ackman (Pershing Square Capital Management)
- Percent of portfolio: 8.9%
No one doubts Bill Ackman's investing acumen. The founder and manager of Pershing Square Capital has amassed a personal fortune of $3.1 billion, according to Forbes.
And he's never been one to shy away from the media. So his increasing stake in Domino's Pizza (DPZ, $521.37) is far from a state secret. Indeed, Ackman disclosed his initial 6% stake in the pizza chain – made during the first quarter – back in May.
"We sold Starbucks. It got to a price that it was hard to earn the excess return we like to earn ... The stock just recovered too quickly," said Ackman during the Wall Street Journal's Future of Everything Festival. At the same time, DPZ "dropped dramatically in price for reasons we didn't understand, and we were able to swap Starbucks for Domino's Pizza."
Ackman added that Pershing Square, with $10.7 billion in managed securities, wasn't able to buy as much DPZ as it initially wanted. Naturally, it picked up more during the second quarter. The fund added 3,466 shares to bring its total holdings up to a little more than 2 million. Domino's now accounts for 8.9% of the fund.
"Domino's is a pure franchising company and interestingly they were the first to invest in technology and delivery," Ackman said when he first bought DPZ stock. "They own their delivery infrastructure and they don't need to rely on the DoorDashes of the world."
The Street is likewise bullish, giving DPZ a consensus recommendation of Buy, per S&P Global Market Intelligence.
- Market value: $227.3 billion
- Billionaire investor: Quinn Opportunity Partners
- Percent of portfolio: 9.1%
Quinn Opportunity Partners added just enough to its Verizon (VZ, $54.91) stake to ensure the telecommunications giant remained its top holding in Q2.
The Charlottesville, North Carolina-based hedge fund with $1.6 billion in AUM bought another 25,000 VZ shares, an increase of less than 1%, raising its total to 2.6 million. The position was worth $145.7 million as of June 30.
The fund's Verizon investment dates back to the first quarter of 2018, and while we don't know Quinn Opportunity's original cost basis, VZ's chart since then is underwhelming. Shares in Verizon, a component of the Dow Jones Industrial Average, are up less than 16% from March 30, 2018 through Sept. 3, 2021. The S&P 500 gained almost 72% over the same span.
Verizon, of course, is a defensive dividend machine, so judging returns over such a relatively short and arbitrary time frame isn't necessarily helpful. On the other hand, the telco has indeed been a long-time market laggard.
Where Verizon does stand out is in its commitment to dividend growth. The blue chip has increased its payout annually for 15 consecutive years. The latest hike – a 2% bump in the quarterly distribution to 60 cents per share – was announced in early September. And those dividends really do add up. VZ stock gained just 1.7% on a price basis over the past three years. Add in the dividend, however, and VZ's total return comes to 15.5%.
Regardless, the Street collectively remains neutral on the stock, giving it a consensus recommendation of Hold.
- Market value: $37.9 billion
- Billionaire investor: Canyon Capital Advisors
- Percent of portfolio: 9.4%
Canyon Capital Advisors, with AUM of $20.9 billion, has propelled risk-taking founders Joshua Friedman and Mitchell Julis to Forbes' list of highest-earning hedge fund millionaires.
But whether their increasingly large bet on chipmaker Xilinx (XLNX, $153.31) adds to their respective fortunes is now in the hands of Chinese regulators.
Advanced Micro Devices (AMD) and Xilinx announced a deal in October 2020 in which AMD would acquire the latter in an all-stock transaction valued at $35 billion. The proposed merger has already passed muster with U.S., U.K. and E.U. antitrust authorities.
So it's understandable if Canyon Capital is getting a bit antsy waiting for the green light from China's review process. After all, the Los Angeles hedge fund has been betting on this merger since the beginning.
Canyon first bought shares in Xilinx in the fourth quarter of 2020, at which point the stake accounted for 4.6% of the fund's portfolio value. Canyon then upped its XLNX holdings in Q1 by 89%, or 672,829 shares, making it almost 7% of its holdings total.
Which brings us to the most recent quarter, in which Canyon once again increased its stake, this time by 23%, or 330,887 shares. By Q2's end, the hedge fund owned a total of 1.8 million Xilinx shares worth $253.7 million. At 9.4% of the portfolio, XLNX is Canyon's second-largest position. Only Dell Technologies (DELL), at 13.2% of the fund, is larger.
Analysts' consensus recommendation on XLNX stands at Hold, pending the deal close. They do, however, rate AMD at Buy, and generally applaud the strategic rationale of merging the two chipmakers' complementary assets.
11. Thermo Fisher Scientific
- Market value: $225.3 billion
- Billionaire investor: Cryder Capital Partners
- Percent of portfolio: 10.1%
Thermo Fisher Scientific (TMO, $572.58) is often called the "Amazon of the healthcare industry" because of its wide-ranging portfolio of life sciences products, analytics and laboratory instruments.
As such, it has been highly active in the fight against COVID-19, which in turn has raised its profile and investor interest. And although TMO has been a holding of Cryder Capital Partners since 2015, the hedge fund remains an active buyer.
London-based Cryder Capital, with $1.8 billion in AUM, lifted its stake in Thermo Fisher by another 28%, or 84,694 shares, during the second quarter. That followed the purchase of 6,398 shares, or a 2% increase, in Q1. The hedge fund now holds a total of 383,281 shares, worth $193.3 million as of June 30. Despite TMO's high weighting in Cryder Capital's portfolio, it's still just its seventh largest position.
The Street is just as optimistic as the hedge fund, giving Thermo Fisher shares a consensus recommendation just shy of Strong Buy, according to S&P Global Market Intelligence. Argus Research is just one research shop in the bull camp.
"The company is investing its substantial cash flow in product development, capacity expansions and acquisitions," writes analyst David Toung, who rates TMO at Buy. "We believe that these investments and strength in the base business (excluding COVID-19 testing revenue) will drive growth on the other side of the pandemic."
Shares trade at 28.4 times analysts' 2022 earnings estimates, but you're buying serious growth potential; analysts forecast Thermo Fisher to generate average annual EPS growth of more than 22% over the next three to five years.
10. S&P Global
- Market value: $108.6 billion
- Billionaire investor: Rothschild & Company Wealth Management UK
- Percent of portfolio: 10.4%
Rothschild & Company Wealth Management UK is increasingly bullish on S&P Global (SPGI, $450.61). The London-based hedge fund with $16.4 billion in AUM first bought shares in early 2019 and has gradually built up its stake ever since.
Most recently, Rothschild upped its position by 3%, or 47,699 shares. It now owns a total of 1.5 million shares, which were worth $608.7 million as of June 30. SPGI is now the hedge fund's fourth-largest holding.
Shares are outperforming the broader market by about 17 percentage points for the year-to-date, and they've been an even better bet since Rothschild got involved. SPGI has more than doubled since the end of Q1 2019, vs. a gain of less than 60% for the S&P 500.
Analysts are also upbeat on the name, giving SPGI a consensus recommendation of Buy, with high conviction.
Although most investors probably know S&P for its majority stake in S&P Dow Jones Indices – which maintains the benchmark S&P 500 index and the blue-chip Dow Jones Industrial Average – it's also a central player in corporate and financial analytics, information and research.
Meanwhile, long-term investors keen on dividend growth are likely familiar with SPGI's status as an S&P 500 Dividend Aristocrat. The company has increased its payout annually for nearly half a century, most recently in January with a 15% hike in the quarterly distribution to 77 cents per share.
- Market value: $257.1 billion
- Billionaire investor: Meritage Group
- Percent of portfolio: 11.3%
Salesforce.com (CRM, $262.62) was added to the Dow Jones Industrial Average last year, which always burnishes a stock's blue-chip credentials. Indeed, the move helped lift CRM into the ranks of hedge funds' favorites stocks, with Meritage Group providing just one example of the industry's ardor.
The San Francisco hedge fund with $14 billion in AUM increased its CRM stake by 12%, or 265,811 shares in Q2, bringing its total holdings to 2.5 million shares. The position, worth $601.7 million as of June 30, accounts for 11.3% of Meritage's portfolio, or its third-largest holding.
The hedge fund initiated its position in Q4 2019. Although we don't know Meritage's cost basis, we do know that CRM stock is up more than 61% since the end of 2019, beating the broader market by almost 22 percentage points.
In addition to being a billionaire favorite, Salesforce routinely ranks among the Street's top stock picks. Analysts, whose consensus recommendation sits on the edge of Strong Buy, cite CRM's robust fundamentals and long track record of delivering superior returns among their reasons to buy and hold the name.
After all, Salesforce, which provides customer relationship management software to enterprise customers, was essentially providing cloud-based services before they were cool. That early mover advantage has helped the stock outperform the broader market on a trailing return basis for years.
It also helps that CRM's massive market value and attendant liquidity makes it a frictionless fit for billionaires trading large blocks of stock.
8. PayPal Holdings
- Market value: $335.2 billion
- Billionaire investor: Dorsey Asset Management
- Percent of portfolio: 12.1%
Digital mobile payments are one of the hottest areas of growth in financial tech. And although the sector offers no shortage of promising new names, old-timer PayPal Holdings (PYPL, $285.23) still gets plenty of analyst – and billionaire investor – love.
Explosive growth in cashless transactions, the monetization of its Venmo property and incremental revenue growth in its Xoom business all help make for a compelling bull case on PYPL, analysts say.
"It's slightly difficult to process, at least for us, but it seems as if PYPL's total addressable market is growing as fast as its already large top line, which we see as a function of both strong fundamentals and the company opportunistically casting a wider and wider net," writes Canaccord Genuity analyst Joseph Vafi, who rates shares at Buy.
Dorsey Asset Management, with $1.3 billion in AUM, is embracing the bull case on PYPL in a big way. The Chicago-based hedge fund increased its stake in PayPal by another 17%, or 83,614 shares, in Q2. That followed an 81% increase in the first quarter. Dorsey now holds 548,880 shares in PYPL worth $160 million as of June 30. At 12.1% of the portfolio, the venerable payments firm remains Dorsey's fifth-largest holding.
Incidentally, Dorsey has owned PYPL since the second quarter of 2018. The stock has more than tripled over the past three years, vs. a gain of about 57% for the S&P 500.
And as for the Street's opinion? Analysts' consensus recommendation sits just shy of Strong Buy, according to S&P Global Market Intelligence.
7. Walt Disney
- Market value: $336.4 billion
- Billionaire investor: Lindsell Train
- Percent of portfolio: 12.7%
As a sprawling media and entertainment conglomerate – and a Dow stock to boot – Walt Disney (DIS, $185.15) is a natural way for billionaire investors to make big bets on a recovering sector of the economy.
Lindsell Train, for one, certainly appears to like Disney's odds. The London hedge fund with AUM of $31.7 billion is a long-time DIS shareholder, having first bought the stock in 2009. Cut to today, and the fund continues to sink fresh capital into the Mouse House.
Lindsell Train increased its position in Disney by another 7%, or 391,250 shares, in Q2, bringing its total holdings up to nearly 5.6 million shares. At 12.7% of its portfolio, DIS is the hedge fund's fourth-largest investment, worth $983.1 million as of June 30.
The Street, with a consensus recommendation of Buy, with high conviction, is bullish on the stock's prospects too. Although Disney "still faces risks from the pandemic, particularly from the spread of the Delta variant," says Argus Research analyst Joseph Bonner (Buy), "strength in its television, theme parks and direct-to-consumer businesses should continue to gain momentum."
DIS is lagging the broader market by a wide margin so far this year, but for long-term investors like Lindsell Train – a top-40 owner with 0.31% of Disney's shares outstanding – it has more than earned its keep. Disney is up about 558% over the past decade on a total return basis (price appreciation plus dividends). Meanwhile, the S&P 500's total return over the same period comes to 361%.
- Market value: $487.2 billion
- Billionaire investor: Metropolis Capital
- Percent of portfolio: 13.4%
Visa (V, $229.09) routinely makes most lists of analysts', hedge funds' or billionaires' favorite stocks. Berkshire Hathaway (BRK.B) owns nearly 10 million shares worth $2.3 billion, although chairman and CEO Warren Buffett readily credits the holding to one of his stock-picking lieutenants.
And indeed, there is much to like about this Dow stock. Visa operates the world's largest payments network, and thus is well-positioned to benefit from the growth of cashless transactions and digital mobile payments.
Just look at the Street's consensus recommendation, which sits on the edge of Strong Buy. Of the 37 analysts issuing opinions on Visa tracked by S&P Global Market Intelligence, 22 call it a Strong Buy and 10 rate it at Buy. The remaining five have it at Hold.
"Visa is seeing a continuing acceleration driven by the reopening, as well as the affluent customer beginning to spend more," writes CFRA's Chris Kuiper (Buy). "We continue to see investors underappreciating the long-term trend of cash displacement and Visa's other products and services, such as its continued investments in open banking."
So it should come as no surprise that Metropolis Capital made Visa its top holding in Q2. The Amersham, England-based hedge fund with $1.4 billion in AUM initiated the position in the first quarter of last year, and portfolio managers Simon Denison-Smith and Jonathan Mills have only become more bullish since.
The duo increased Metropolis' stake by a third in Q2, buying another 230,186 shares. The fund's total position of 912,696 shares, worth $213.4 million as of June 30, accounts for 13.4% of its equity portfolio.
V stock is lagging the broader market for the year-to-date, hurt by the spread of the COVID-19 Delta variant. Over the long term, however, it's been a killer, beating the S&P 500 by about 68 and 670 percentage points, respectively, over the past five and 10 years.
- Market value: $276.0 billion
- Billionaire investor: Nelson Peltz (Trian Fund Management)
- Percent of portfolio: 13.8%
Comcast (CMCSA, $60.14), the nation's largest cable company, regularly ranks as an analyst, hedge fund or billionaire favorite. That's because its combination of content, broadband, pay TV, theme parks and movies is unparalleled by rivals, and gives this blue-chip stock a huge strategic advantage.
So it was something of a concern to supporters of Comcast's status quo when noted activist investor Nelson Peltz initiated a stake in the cable giant in the second quarter of last year.
Peltz's Trian Fund Management, with $9.2 billion in AUM, has a long record of pressuring companies into making sweeping changes – such as spin offs and divestitures – in order to "unlock value." A break-up of Comcast would very much be in Peltz's playbook.
A spokesperson for the New York hedge fund said at the time that it had begun having "what we believe are constructive discussions with Comcast's management team."
And that's all we know. Because ever since, Trian has let its checkbook do the talking.
Peltz, with an estimated net worth of $1.7 billion, per Forbes, upped his CMCSA stake by 4%, or 939,574 shares, in Q2. At 13.8% of the portfolio, the cable giant is the hedge fund's third-largest holding.
Trian's total stake of 20.8 million shares, worth $1.2 billion as of June 30, gives it control of 0.45% of Comcast's shares outstanding. True, that's enough to make Trian a top-40 stockholder – but not nearly enough to effect change without fomenting a shareholder mutiny. After all, CEO Brian Roberts controls 33% of the total voting power of all classes of Comcast stock.
Regardless of what's happening behind the scenes, analysts remain bullish on CMCSA stock, giving it a consensus recommendation of Buy, with high conviction.
- Market value: $1.8 trillion
- Billionaire investor: Windacre Partnership
- Percent of portfolio: 17.2%
Windacre Partnership is serious about its stake in Amazon.com (AMZN, $3,525.50). The Houston hedge fund with AUM of $5.8 billion initiated a position in the e-commerce giant in the second quarter of last year, but it really got down to business in Q2 of 2021.
Windacre increased its holdings by 32%, or 55,500 shares, in the most recent quarter. The boost kept AMZN's place as the fund's second-largest holding, comprising 17.2% of its portfolio value, up from 13.2% in the previous quarter. Windacre's total stake of 226,400 shares was worth $778.9 million as of June 30.
The hedge fund's largest holding is Nielsen (NLSN), which accounts for 19.2% of its portfolio. Windacre is NLSN's second-largest stockholder after Vanguard, controlling 9.8% of the data analytics company's shares outstanding.
With its massive market value and dominance in e-commerce, AMZN routinely ranks among the very most popular of billionaire stocks. Even Warren Buffett is in on the act. Berkshire Hathaway has been an Amazon shareholder since 2019.
The Street's consensus recommendation stands at Strong Buy, with very high conviction. Indeed, of the 46 analysts issuing opinions on AMZN, 35 rate it at Strong Buy.
"As the leader in two large and rapidly growing sectors (e-commerce and cloud), with an emerging high-margin marketing business, Amazon remains well positioned in a recovery scenario given cloud services, marketing services and certain e-commerce categories/geographies are still in the early phases of development," writes Stifel analyst Scott Devitt, who rates shares at Buy.
3. Charter Communications
- Market value: $147.0 billion
- Billionaire investor: Chris Hohn (TCI Fund Management)
- Percent of portfolio: 18.0%
Activist investor Chris Hohn has made quite a name for himself with The Children's Investment Fund Management – more commonly known as TCI Fund Management. Indeed, the London-based investor has parlayed his many stock picks into a personal net worth of $5.9 billion, per Forbes.
TCI, with more than $40.1 billion in managed securities, made a handful of buys during the second quarter, including topping off its largest position. The fund increased its stake in cable company Charter Communications (CHTR, $799.79) by 1%, or 132,549 shares, lifting its total to 10.4 million shares worth $7.5 billion as of June 30.
With 5.7% of CHTR's shares outstanding, TCI is the cable company's third-largest stockholder after billionaire John Malone's Liberty Broadband (LBRDK), with 30.4%, and Capital Research and Management, with 6.9%.
Charter now accounts for 18% of TCI's portfolio. That's down from 18.4% in the prior quarter even though TCI added to the position, because CMCSA lagged the broader market over the first half of 2021.
Over the longer haul, however, Charter has done well by the hedge fund. TCI initiated its stake during the second quarter of 2016, and the stock has indeed been an outperformer ever since. CHTR stock is up 250% since the end of June 2016, while the broader market has a bit more than doubled.
The Street skews mostly bullish on the name, as well. Analysts' consensus recommendation stands at Buy, albeit with so-so conviction. Of the 30 analysts issuing opinions on CHTR tracked by S&P Global Market Intelligence, 14 rate it at Strong Buy, five say Buy, 10 have it at Hold and one says Sell.
- Market value: $27.8 billion
- Billionaire investor: Felix and Julian Baker (Baker Bros. Advisors)
- Percent of portfolio: 32.9%
Seagen (SGEN, $152.75), a biotechnology firm specializing in oncology treatments, couldn't get a bigger vote of confidence than being the top holding of Baker Bros. Advisors.
This New York-based hedge fund with $35.8 billion in AUM is led by billionaire biotech investors Julian and Felix Baker. The brothers may keep a low profile, but they're plenty famous in the world of biotech stocks. A series of successful investments have allowed the Bakers to build an estimated combined fortune of about $4 billion, according to Forbes.
And judging by their latest regulatory filings, the brothers have great expectations for Seagen, too. The stock pick accounts for nearly a third of the total value of the Baker Bros.' holdings, up from 28.5% three months ago.
The increase stems in part from Baker Bros. buying another 17,500 shares in SGEN in the second quarter of 2021. True, that's less than a 1% bump in the stake, but it followed a first-quarter increase of 347,745 shares. The fund's total holdings of 47.3 million shares were worth $7.5 billion at the end of Q2.
The investment gives Baker Bros. ownership of 26% of SGEN's shares outstanding, which makes it the biotech's largest shareholder by a wide margin. The second-largest investor – Capital Research and Management – holds only 9.5% of SGEN's shares outstanding.
Analysts have a consensus Buy recommendation on the stock, forecasting Seagen to generate average annual EPS growth of 23% over the next three to five years.
- Market value: $462.8 billion
- Billionaire investor: Polunin Capital Partners
- Percent of portfolio: 34.6%
Polunin Capital Partners really rolled the dice on its newest and largest stock pick. The London hedge fund with $5.8 billion in AUM initiated a stake in Chinese e-commerce giant Alibaba (BABA, $170.71) in the second quarter – a risky bet with potentially huge rewards.
The Chinese government's crackdown on the country's technology sector has sparked a steep selloff in the so-called "Amazon of China" and peers. BABA alone is off 27% for the year-to-date.
Apparently Polunin Capital saw a screaming bargain amid all that blood in the streets. It bought 494,200 shares in BABA during Q2 – a period in which shares were off by as much as 12% for the year-to-date. The BABA stake, worth $112 million as of June 30, instantly became Polunin's largest investment, accounting for nearly 35% of its portfolio.
However, with an average estimated cost basis of $226.78, the hedge fund is down 25% so far.
We'll have to wait until November's regulatory filings are due to see if Polunin bought more BABA as it continued to sell off in Q3, but analysts would certainly approve of the move if Polunin did. The Street gives BABA a consensus recommendation of Strong Buy, based essentially on the belief that authorities in Beijing will stand down.
"We think that China will ultimately recognize the importance of letting BABA operate with some autonomy and protect customer and company data," says Argus Research analyst Jim Kelleher. "Given the company's market leadership and attractive valuation, we believe that BABA warrants a near-term Buy rating."
The bulk of the Street has even higher conviction than Argus Research does. Of the 47 analysts issuing opinions on BABA stock, 36 rate it at Strong Buy.