50 Top Stock Picks That Billionaires Love
Slide Show

50 Top Stock Picks That Billionaires Love

Getty Images

Advertisement
Advertisement

They say on Wall Street that if you want to make a small fortune, start by investing a large one.

The billionaires and big-time money managers below all have fortunes of various sizes, and studying which stock picks they've chased with their capital ain't a half-bad idea. After all, there's a reason why the rich get richer.

No, you can't become a billionaire solely by copying their every move, but it's always interesting – and often constructive – to know what the "smart money" is up to. Their resources for research, as well as their intimate connections to insiders and others, can give them a unique insight into their stock picks.

Here are 50 top stock picks of the billionaire class. In all cases, these companies represent major holdings (5% or more) of at least one ultra-wealthy person or large hedge fund, if not several. In many cases, these stocks are owned by multiple billionaires. And while several of these investments are popular blue chips, others keep a much lower profile.

SEE ALSO: 20 Best Stocks to Buy Now for the Next Bull Market

Prices are as of April 30. Data is courtesy of S&P Global Market Intelligence, WhaleWisdom.com and regulatory filings made with the Securities and Exchange Commission.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 2 of 51

Adobe

Advertisement
Advertisement

Market value: $170.4 billion

Billionaire investor: Suvretta Capital Management

Percent of portfolio: 7.4%

Adobe (ADBE, $353.64) has always had little competition in creating software for designers and other creative types. Photoshop, for example, is so popular that it's often used generically to refer to any program that can edit and manipulate graphics.

But the company took a massive step a few years ago when it migrated its vast portfolio of offerings to the cloud – a move that still is paying off in spades. More recently, in late 2018, it moved into business-to-business marketing when it completed its acquisition of Marketo.

Suvretta Capital Management, with $4.5 billion in assets under management (AUM), is among several big-money managers that have Adobe among their top stock picks. In fact, Chief Investment Officer Aaron Cowen has made ADBE the hedge fund's single-largest holding, accounting for more than 7% of its portfolio.

SEE ALSO: 64 Dividend Stocks You Can Count On

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 3 of 51

ADT

Getty Images

Advertisement
Advertisement

Market value: $4.4 billion

Billionaire investor: Leon Black (Apollo Global Management)

Percent of portfolio: 48.9%

ADT (ADT, $5.73), which provides home alarm and security systems for homes and businesses, has something most investors adore: a subscription business. Customers send checks like clockwork to maintain their service. Billing ranges from $36.99 to $52.99 a month.

A predictable cash stream is just one of the company's attractive attributes. Safehome.org gives the company high marks: "Reliable systems backed by outstanding service. It's no wonder ADT is a household name with 7 million customers and counting. When you're ready for the big guns in home security, you go with ADT." Analysts surveyed by S&P Global Market Intelligence, meanwhile, have an average recommendation of Buy on ADT.

The company did shrink recently, however, selling off its Canadian operations in late 2019 to focus on higher-margin opportunities in the U.S. market.

ADT dominates the other stock picks held in Billionaire Leon Black's Apollo Management Holdings, a subsidiary of Apollo Global Management (APO). Apollo Management Holdings has a whopping 48.9% of its portfolio socked away in ADT. Black arranged to buy ADT in 2016 for about $7 billion.

SEE ALSO: 25 Blue Chips With Brawny Balance Sheets

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 4 of 51

Alibaba Group

Getty Images

Advertisement
Advertisement

Market value: $543.7 billion

Billionaire investor: Joseph Tsai

Percent of portfolio: 100%

Jack Ma is probably the most famous billionaire from China. The founder of Alibaba (BABA, $202.67) created an e-commerce giant that propelled his net worth to truly stratospheric levels. Forbes puts his wealth at $42 billion.

Less well-known but plenty rich himself is Joseph Tsai. The Canadian billionaire who was born in Taiwan is the vice chairman and co-founder of BABA. Jack Ma may have been Alibaba's public face, but Tsai was no less important behind the scenes.

Tsai famously accepted an initial salary of just $50 a month when he first met Jack Ma in 1999.

In addition to owning 3.4%  of BABA's shares outstanding, Tsai also is the owner of the NBA's Brooklyn Nets. Forbes says Tsai's net worth comes to $10.9 billion.

SEE ALSO: The 10 Best Chinese Stocks You Can Buy

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 5 of 51

Alphabet

Getty Images

Advertisement
Advertisement

Market value: $925.8 billion

Billionaire investor: Ruane, Cunniff & Goldfarb

Percent of portfolio: 16.6%

William Ruane and Richard Cunniff, of Ruane, Cunniff & Goldfarb, which boasts $8 billion in AUM, own a slew of Google-parent Alphabet's (GOOGL, $1,346.70) stock. Between ownership of both Class A GOOGL and Class C GOOG shares, the hedge fund sits on 1 million shares worth $135 million.

Taken together, the Google stakes come to nearly 17% of the fund's total value. Shares in GOOGL have declined 12.6% from the market top in February vs. a drop of 13.6% for the S&P 500.

Retail investors might be more familiar with the mutual fund simply called Sequoia (SEQUX), which allows smaller investors to benefit from Ruane's and Cunniff's investing acumen.

SEE ALSO: 11 Best Tech Stocks for the New Coronavirus Norm

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 6 of 51

Amazon.com

Getty Images

Advertisement
Advertisement

Market value: $1.23 trillion

Billionaire investor: Eagle Capital Management

Percent of portfolio: 5.3%

When it comes to billionaire investors in Amazon.com (AMZN, $2,474.00), the first name that should come to mind is that of CEO Jeff Bezos. The world's richest man is worth $149 billion, according to Forbes. Even after his divorce from ex-wife MacKenzie Bezos, the AMZN founder is still the e-commerce giant's top shareholder, with 11.1% of its shares outstanding.

Naturally, a long list of hedge fund investors will have a company as massive and successful as AMZN among their top stock picks. Among those that stick out is Eagle Capital Management. Managing director Ravenel Boykin Curry IV has committed 5.3% of the fund's portfolio to AMZN. Eagle Capital Management's holdings in Amazon are currently worth about $2.2 billion.

Analysts expect Amazon to generate average annual earnings growth of 36% over the next three to five years. They're also overwhelmingly bullish on the stock, with 32 Buys, 1 Hold and 1 Sell over the past three months.

SEE ALSO: Every Warren Buffett Stock Ranked: The Berkshire Hathaway Portfolio

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 7 of 51

American Express

Getty Images

Advertisement
Advertisement

Market value: $73.5 billion

Billionaire investor: Warren Buffett (Berkshire Hathaway)

Percent of portfolio: 7.8%

Warren Buffett likes to say that his preferred holding period is forever, and that's about how long he has had a stake in American Express (AXP, $91.25).

Buffett picked up his initial stake in the credit card company in 1963, when a struggling AmEx badly needed capital. Berkshire obliged, getting favorable terms on its investment.

Berkshire owns 151.6 million shares in the Dow Jones Industrial Average component, worth about $13.8 billion today. That makes the holding company AXP's largest shareholder with 18.8% of its shares outstanding.

AmEx is not small potatoes to Warren Buffett either, seeing as it accounts for 7.8% of Berkshire Hathaway's equity stock picks.

SEE ALSO: 20 Top Stocks to Invest In During a Recession

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 8 of 51

American International Group

Getty Images

Advertisement
Advertisement

Market value: $21.9 billion

Billionaire investor: Steve Cohen (Point72 Europe)

Percent of portfolio: 8.4%

Once upon a time, American International Group (AIG, $25.43) was an insurance industry behemoth and a component of the Dow Jones Industrial Average.

But the Great Recession changed everything. If not for a $182 billion bailout, AIG would have gone bust – and brought much of the global financial system with it.

Today, AIG remains one of the world's largest insurers, with business in general life, auto, home, business and travel insurance. The company also sells retirement products like fixed and variable annuities. And if that weren't enough, AIG has a financial services and an asset management business.

Billionaire Steve Cohen, who Forbes estimates is worth $14 billion, has a sizable stake in the insurer by way of Point72 Europe. Cohen's SAC Capital hedge fund was forced to shut down in 2013 because of insider trading.

SEE ALSO: 19 Dividend Aristocrats That Have Gone on Deep Discount

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 9 of 51

Ameriprise Financial

Getty Images

Advertisement
Advertisement

Market value: $14.1 billion

Billionaire investor: Lyrical Asset Management

Percent of portfolio: 5.2%

Lyrical Asset Management ($6.8 billion in AUM) was founded in 2008 by Andrew Wellington and Jeff Keswin. Although it doesn't have a long lineage, the fund is old school in its approach. Lyrical pursues a buy-and-hold strategy that limits the fund's total trades to only a handful per year. Keswin and Wellington want to hold positions for the long haul.

Ameriprise Financial (AMP, $114.94) represents one such bet. The fund first invested in the diversified financial services company in the fourth quarter of 2011. Today, AMP accounts for more than 5% of Lyrical's portfolio.

AMP has taken its lumps like the rest of the market since it topped out in February. Longer term, however, it has been a solid holding. Shares are up 213% over the past 10 years on a total return basis (price plus dividends). The S&P 500's total return comes to 202% over the same span.

That outperformance is in part thanks to AMP's 3.4% dividend yield, which represents a decent income stream for new investors.

SEE ALSO: 25 Dividend Stocks the Analysts Love the Most

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 10 of 51

Amyris

Getty Images

Advertisement
Advertisement

Market value: $442.5 million

Billionaire investor: John Doerr

Percent of portfolio: 45.8%

John Doerr, the investor and venture capitalist, is best known as chairman of Kleiner Perkins, which has been called Silicon Valley's most famous investment firm. Forbes puts his wealth at $8.6 billion, which means he can strike on his own when he wishes.

That's the case with Amyris (AMRS, $2.70), which develops sustainable ingredients and chemicals for the beauty, health and fragrances and flavors industries. Doerr is the company's top shareholder with almost 36% of AMRS's shares outstanding.

This small-cap stock pick doesn't get a lot of attention from Wall Street, but the two analysts who do track it are bullish. Meanwhile, AMRS is forecast to report its first-ever profit in 2021 after racking up annual net losses every year since 2010.

SEE ALSO: Where Is the Stock Market Headed? 14 Wall Street Pros Sound Off

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 11 of 51

Apple

Getty Images

Advertisement
Advertisement

Market value: $1.29 trillion

Billionaire investor: Warren Buffett (Berkshire Hathaway)

Percent of portfolio: 29.8%

Warren Buffett never much liked technology stocks, but he has fallen head over heels for Apple (AAPL, $293.80). Indeed, at nearly 30%, AAPL is the single largest holding in Berkshire Hathaway's equity portfolio. And that's after Buffett trimmed roughly 3.7 million shares during Q4 2019.

The Oracle of Omaha took his first bite in early 2016 and decided he liked the taste of the iPhone maker.

Get Investing Tips: Sign up for Kiplinger's free Closing Bell and Investing e-newsletters to make better decisions about your investments

"I do not focus on the sales in the next quarter or the next year," Buffett has said. "I focus on the ... hundreds and hundreds and hundreds of millions of people who practically live their lives by (the iPhone)."

With more than 250 million shares, Berkshire is Apple's third-largest shareholder after Vanguard and BlackRock – giants of the passively managed index fund universe. Buffett, with a net worth of roughly $74 billion, according to Forbes, owns 16% of Berkshire Hathaway's shares outstanding.

SEE ALSO: 15 Super-Safe Dividend Stocks to Buy Now

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 12 of 51

Bausch Health Companies

Getty Images

Advertisement
Advertisement

Market value: $6.4 billion

Billionaire investor: John Paulson (Paulson & Co.)

Percent of portfolio:

Bausch Health Companies (BHC, $18.12) used to be known as Valeant Pharmaceuticals, and it would be happy if investors forgot that. A massive debt load, allegations of improper accounting and other controversies caused the stock to collapse in 2015.

BHC has since undergone an overhaul, and John Paulson, billionaire owner of hedge fund Paulson & Co. ($4.6 billion in AUM), is a big believer in the remade entity.

True, Paulson was a large stakeholder in 2015, before the company completely fell apart. Perhaps he should get credit for sticking to his guns. BHC is Paulson & Co.'s largest position, accounting for 13.5% of its portfolio. Shares are down 23% over the past 52 weeks, but analysts' average recommendation is Buy, according to S&P Global Market Intelligence.

Paulson's fund owns 5.9% of BHC's shares outstanding, worth about $378 million.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 13 of 51

Baxter International

Getty Images

Advertisement
Advertisement

Market value: $45.0 billion

Billionaire investor: Daniel Loeb (Third Point)

Percent of portfolio: 16.7%

Hedge-fund billionaire Daniel Loeb is known for making big bets. He's certainly put a lot of money at the mercy of Baxter International (BAX, $88.78) stock.

His Third Point fund's 17.5 million shares of the medical equipment outfit are collectively worth more than $1.5 billion. As of the fourth quarter, BAX was the fund's top holding, accounting for 16.7% of its total value.

Furthermore, Third Point is Baxter's fifth largest investor with 3.5% of its shares outstanding.

Loeb first disclosed his position in Baxter in August 2015. He has sold more than half of his original 38 million shares quite profitably, and the remaining stake continues to do well. BAX is up 17% over the past 52 weeks on a price basis, vs. a 1% loss for the S&P 500.

SEE ALSO: 10 Health and Pharmaceutical Companies Fighting the Coronavirus

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 14 of 51

Berkshire Hathaway

Getty Images

Advertisement
Advertisement

Market value: $454.9 billion

Billionaire investor: Bill and Melinda Gates (Bill & Melinda Gates Foundation Trust)

Percent of portfolio: 53%

Warren Buffett is the best-known billionaire owner of Berkshire Hathaway (BRK.B, $187.36) stock, but he's not the only one. The Bill & Melinda Gates Foundation Trust – created by Microsoft founder Bill Gates and his wife, Melinda – has more than half of its portfolio concentrated in Buffett's baby.

Gates – worth $105.6 billion, according to Forbes – sits on Berkshire's board of directors. His foundation trust owns 49.9 million of the holding company's shares, worth $9.3 billion today.

Other top stock picks of the Gates Foundation Trust include Dow components Caterpillar (CAT) and Walmart (WMT).

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 15 of 51

Brink's

Courtesy Paul Sableman via Creative Commons 2.0

Advertisement
Advertisement

Market value: $2.6 billion

Billionaire investor: P2 Capital Partners

Percent of portfolio: 10.7%

P2 Capital Partners manages securities worth just $1.4 billion, but then it doesn't need to build big stakes to get what it wants. As an activist investor, the hedge fund needs only to own enough shares outstanding to force changes it deems necessary at its target companies.

CEO and founder Claus Jorgen Moller maintains a highly concentrated portfolio with just 16 positions. In addition to Brink's, major P2 Capital holdings include Nexstar Media (NXST), Acadia Healthcare (ACHC) and Hilton Grand Vacations (HGV).

As for Brink's Co. (BCO, $51.12), P2 holds about 1.6 million shares, or about 3.3% of the company's shares outstanding. That stake currently is worth about $84 million. Stock in the private security and protection company are off by more than a third over the past year.

SEE ALSO: The Kip 25: The Best Low-Fee Mutual Funds You Can Buy

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 16 of 51

Bristol-Myers Squibb

Getty Images

Advertisement
Advertisement

Market value: $137.6 billion

Billionaire investor: Jim Simons (Renaissance Technologies)

Percent of portfolio: 3.0%

Bristol-Myers Squibb (BMY, $60.81) is popular with analysts and happens to be one of the 50 best stocks of all time.

The pharmaceutical giant also happens to be the single largest holding of Jim Simons' Renaissance Technologies hedge fund ($139 billion in AUM).

Although we normally require stock picks to account for at least 5% of a fund's holdings, we're making an exception in this case. As the world's 36th richest man, worth $21.6 billion, it's interesting to know which stock is his biggest bet.

Besides, Renaissance maintains a highly diversified portfolio. No individual stock is ever going to contribute an outsized slice of the fund's value.  Renaissance's top 10 holdings account for 12.7% of the portfolio. The remainder is distributed among hundreds of stocks.

The fund's 60.2 million shares, worth $3.7 billion, equate to 2.7% of BMY's shares outstanding.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 17 of 51

Caesars Entertainment

Getty Images

Advertisement
Advertisement

Market value: $6.6 billion

Billionaire investor: Carl Icahn

Percent of portfolio: 6%

More than one of activist billionaire investor Carl Icahn's holdings are getting hammered by the pandemic-led recession. Among them is Caesars Entertainment (CZR, $9.66), which operates Caesars Palace, Bally's, Harrah's and other casinos.

Hotels and casinos are among the very hardest hit businesses by the lockdown, and CZR is no exception. Shares are down 29% so far this year vs. a drop of 10% for the S&P 500. The Las Vegas casino company has furloughed workers, but that's no substitute for revenue, which has dried up.

Caesars accounts for 6% of Icahn's portfolio, and the stake is worth about $1.1 billion. Icahn also is CZR's single largest shareholder, with almost 17% of its shares outstanding.

SEE ALSO: 13 Stock Picks Getting Hit by Coronavirus Fears

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 18 of 51

Campbell Soup

Getty Images

Advertisement
Advertisement

Market value: $15.1 billion

Billionaire investor: 6.9%

Percent of portfolio: Daniel Loeb (Third Point)

Campbell Soup (CPB, $49.98) has proven to be a (cough) canny investment this year. Shares in companies that make foods with long shelf lives have proven to be winners during a time in much of the world is sheltering at home because of COVID-19.

Billionaire hedge fund macher Daniel Loeb first disclosed his stake in the soup company in August 2018. His Third Point hedge fund disclosed that it spent about $686.4 million to acquire a 5.65% position. Today, Third Point owns 4.1% of CPB's shares outstanding.

Third Point is known as an activist investor, but there's nothing like a global pandemic to light a fire under shares in packaged food and other consumer staples. CPB is up nearly 5% since the market top in February. The S&P 500 is down 13% since then.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 19 of 51

Charter Communications

Getty Images

Advertisement
Advertisement

Market value: $116.0 billion

Billionaire investor: Alexandre Behring (3G Capital Partners)

Percent of portfolio: 17.2%

Charter Communications (CHTR, $495.23) is just one of the major holdings of 3G Capital Partners, a hedge fund within 3G Capital. And Alexandre Behring is just one of 3G Capital's billionaires. Behring, with a net worth of $5.9 billion, works alongside fellow billionaires Jorge Paulo Lemann ($14.1 billion), Marcel Telles ($8.7 billion) and Carlos Alberto Sicupira ($6.7 billion).

The Brazilian-American firm (AUM of $31.3 billion) holds 238,368 shares worth about $118 million within its 3G Capital Partners hedge fund; it's third largest among the fund’s stock picks after Comcast (CMCSA) and Fox Corp. (FOXA).

3G Capital has made its mark on the capital markets in a big way. In 2015, it partnered with Berkshire Hathaway to create Kraft Heinz (KHC) by combining H.J. Heinz and Kraft Foods Group; its 3G Global Food Holdings currently owns 20% of KHC's shares outstanding. Earlier in its history, it purchased Burger King in 2010, and four years later merged it with Tim Hortons.

SEE ALSO: The 20 Best ETFs to Buy for a Prosperous 2020

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 20 of 51

Chipotle Mexican Grill

Getty Images

Advertisement
Advertisement

Market value: $24.4 billion

Billionaire investor: 15.2%

Percent of portfolio: Bill Ackman (Pershing Square Capital)

Bill Ackman of Pershing Square Capital can take a bow over this stock pick.

Five years ago, Chipotle Mexican Grill (CMG, $878.55) was laid low by several outbreaks of foodborne illness, including two E. coli outbreaks that sickened 60 people. It wasn't clear at the time that the fast-casual restaurant chain could mount a comeback in the age of social media. Shares lost about two-thirds of their value from their pre-crisis level to a 2018 low.

But hedge fund billionaire Bill Ackman was greedy where others were fearful, stocking up on CMG with almost 10% of its shares outstanding. The Tex-Mex eatery rebounded, then rebounded some more; the stock has shot up nearly 250% since its early 2018 low.

Pershing Square remains a top-five shareholder in CMG to this day, holding 1.2 million shares worth about $1.1 billion.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 21 of 51

Cigna

Getty Images

Advertisement
Advertisement

Market value: $72.8 billion

Billionaire investor: Leon Cooperman

Percent of portfolio: 6.1%

Hedge fund billionaire Leon Cooperman net worth is $3.2 billion, per Forbes, stemming from his Omega Advisors hedge fund. In 2016 Cooperman closed Omega and converted it to a family office.

One of the most prominent stocks in his private wealth management firm is Cigna (CI, $195.78), which has held up pretty well so far in 2020. Shares in the health insurance company are down 4% for the year-to-date vs. a decline of 10% for the S&P 500. That's got to be something of a relief for Cooperman considering CI accounts for more than 6% of the value of his holdings.

Cooperman also has a stake in UnitedHealth Group (UNH), a health insurance company and component of the Dow Jones Industrial Average.

SEE ALSO: Investing in Gold: 10 Facts You Need to Know

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 22 of 51

Citigroup

Getty Images

Advertisement
Advertisement

Market value: $101.1 billion

Billionaire investor: ValueAct Holdings

Percent of portfolio:

ValueAct Holdings ($13.9 billion in AUM) maintains a fairly concentrated portfolio of just 25 stocks. Citigroup (C, $48.56), the nation's fourth largest bank by assets under management, is its largest position by a decent margin.

Almost 22% of the value of the fund's holdings are held in C stock. Citigroup's wager of 27 million shares is currently worth $1.3 billion.

Citigroup is perennially among the hedge fund crowd's top stock picks. A money-center bank with a massive market value, share liquidity and central place in the financial system will almost always be popular among professional asset allocators. The 4.2% yield on the dividend is another plus.

Analysts' average recommendation in the name is Buy, although its long-term growth rate is forecast to hit only 1.1% over the next three to five years.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 23 of 51

CME Group

Getty Images

Advertisement
Advertisement

Market value: $63.9 billion

Billionaire investor: Prana Capital Management

Percent of portfolio: 5.5%

Prana Capital Management is a small but feisty competitor in the hedge fund industry. It has just four clients and assets under management (AUM) of only $613 million.

It's a smaller fund, but it's not afraid to take on relatively concentrated positions. It also embraces volatility, which is something most investors could do without.

CME Group (CME, $178.21) represents a significant position for Prana, taking up more than 5% of the value of its holdings. CME owns the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange, among other exchanges.

CME stock is getting beaten up like the rest of the market these days, but it has an enviable longer-term track record. Shares have roughly doubled over the past five years against a gain of 40% for the S&P 500.

SEE ALSO: 33 Major U.S. Companies Hiring Now to Meet Coronavirus Demand

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 24 of 51

CVR Energy

Getty Images

Advertisement
Advertisement

Market value: $2.4 billion

Billionaire investor: Carl Icahn

Percent of portfolio: 11%

Activist billionaire investor Carl Icahn's largest holding is Icahn Enterprises (IEP), his publicly traded investment vehicle. After IEP, however, comes CVR Energy (CVI, $23.85), which is in the oil refining and nitrogen fertilizer manufacturing business.

Icahn, who took control of CVI in 2012 by means of a hostile takeover, might come to regret winning that battle given what's happening to the energy business today. Oil prices have collapsed, leaving no corner of the sector untouched.

Indeed, CVI is off nearly 50% over the past 52 weeks vs. a slight decline for the broader market.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 25 of 51

Delta Air Lines

Getty Images

Advertisement
Advertisement

Market value: $16.5 billion

Billionaire investor: Warren Buffett (Berkshire Hathaway)

Percent of portfolio: 1.7%

Airline stocks are among the highest-profile losers amid the coronavirus lockdown. Shares in Delta Air Lines (DAL, $25.91) have lost more than half their value so far this year and are primed for further losses.

That's bad news for Warren Buffett, who shocked long-time Buffettologists when he took stakes in a number of major airline stock picks – Delta included – in 2016. The Oracle had long criticized the industry for destroying piles of capital, but he decided the past was the past.

UPDATE: Buffett has come to regret that change of heart. In early April, BRK.B sold 18% of its stake in DAL, just as the company said revenue will plunge 90% in the second quarter. The reduction came to almost 13 million Delta shares worth about $314 million. Then, on May 2, Buffett announced at Berkshire's annual meeting that his holding company had exited its stakes in all four major airlines, including Delta.

Berkshire still was DAL's largest shareholder with 9.3% of shares outstanding, or 58.9 million shares, as of the early April announcement. But Buffett now is out of Delta ... and airlines altogether.

SEE ALSO: 8 Best Consumer Stocks to Buy for Income & Growth

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 26 of 51

Extended Stay America

Getty Images

Advertisement
Advertisement

Market value: $1.9 billion

Billionaire investor: SouthernSun Asset Management

Percent of holdings: 5.5%

With only $1.1 billion in assets, Memphis-based management firm SouthernSun Asset Management is a small player. But it isn't afraid to make big bets.

More than 5% of its portfolio is invested in an off-the-radar hotel chain called Extended Stay America (STAY, $10.87). The hotel chain serves a niche audience, accommodating guests who need to stay somewhere for more than just a few days. Its rooms include kitchenettes that let guests cook at home.

Analysts rate shares at Buy, but that could change at any time. The lockdown caused by coronavirus is hammering the hotel industry. That includes STAY, which is off 27% year-to-date.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 27 of 51

Facebook

Getty Images

Advertisement
Advertisement

Market value: $583.6 billion

Billionaire investor: Mark Zuckerberg

Percent of portfolio: Unknown*

OK, this one might seem like a bit of a cheat. It's not difficult to become the biggest shareholder of the company you founded. But Mark Zuckerberg's enormous stake in Facebook (FB, $204.71) gives him by far and away a dominant position in the social media company, which was too interesting to pass up.

Mark Zuckerberg's 400 million shares make him the company's largest shareholder by a mile. The second-largest shareholder is massive asset manager Vanguard with 184 million shares.

Zuckerberg – who is worth $75.6 billion thanks to his FB stake – has earmarked the vast majority of his shares to be given to charity. He hasn't been specific, however, and there is every reason to expect Zuck to keep commanding control of the company for a long time.

*Although Mark Zuckerberg is legally required to disclose his stake in Facebook by virtue of being a major "insider" shareholder, unlike hedge funds, Zuckerberg is not required to disclose his other holdings or total value of his portfolio.

SEE ALSO: 10 Solid Social Distancing Stocks to Buy

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 28 of 51

General Motors

Getty Images

Advertisement
Advertisement

Market value: $31.9 billion

Billionaire investor: David Einhorn (Greenlight Capital)

Percent of portfolio: 16.7%

Greenlight Capital's billionaire founder and president David Einhorn saw deep value in General Motors' (GM, $22.29) in 2017. Shares were almost laughably cheap, trading at less than 6 times projected earnings. A dividend yield that was usually above 4% only added to the allure, though GM has since suspended its dividend.

Einhorn called for some financial engineering that would squeeze more value out of the company, but mostly he liked GM for being GM. The massive and iconic auto manufacturer "is not going to be put out of business," Einhorn liked to say.

Einhorn has since lightened his position in GM, but Greenlight retains a large stake. Its 6.2 million shares, worth about $137 million, account for 16.7% of the value of the fund’s stock picks.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 29 of 51

Goldman Sachs

Getty Images

Advertisement
Advertisement

Market value: $63.1 billion

Billionaire investor: Greenhaven Associates

Percent of portfolio: 16.9%

Goldman Sachs (GS, $183.42) is a favorite stock of Warren Buffett, but he's not the only billionaire who has taken a shine to the names. Greenhaven Associates, an advisory firm with 150 clients and $6.7 billion in AUM, has sunk 16.9% of its fund into Wall Street's biggest investment bank.

GS is Greenhaven's second largest investment, and the fund is a top-15 holder of Goldman's stock. The firm owns 3.3 million shares worth about $612 million. Greenhaven holds not not quite 1% of GS shares outstanding.

Greenhaven's other big bets include Citigroup, GM and homebuilder Lennar (LEN). Interestingly, Greenhaven's Edgar Wachenheim is the author of Common Stocks and Common Sense, a well-received book describing the fund chief's investing philosophy.

For what it's worth, Berkshire also holds 12 million shares in GS.

SEE ALSO: 15 Dividend Kings for Decades of Dividend Growth

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 30 of 51

HCA Healthcare

Getty Images

Advertisement
Advertisement

Market value: $37.2 billion

Billionaire investor: Lyrical Asset Management

Percent of portfolio: 6.2%

First things first: HCA Healthcare (HCA, $109.88), which operates hospitals, emergency care centers and other medical establishments, suspended its dividend on April 21.

Lyrical Asset Management's buy-and-hold strategy could be tested with this name. Like many health care stock picks, HCA is suffering from a lack of elective procedures as would-be patients avoid going anywhere as long as the risk of contracting COVID-19 is high.

HCA's first-quarter earnings missed Wall Street estimates because of the pandemic. "Patient volumes across most services were significantly impacted in the last two weeks of the quarter as various COVID-19 policies were implemented by federal and state governments," the company said in a press release.

In addition to suspending its quarterly payout, HCA also stopped buying back its own shares.

Lyrical owns 3.1 million shares worth about $341 million currently. The hedge fund owns 0.9% of HCA's shares outstanding.

SEE ALSO: 23 Dividend Cuts and Suspensions Chalked Up to the Coronavirus

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 31 of 51

Herbalife

Getty Images

Advertisement
Advertisement

Market value: $5.1 billion

Billionaire investor: Carl Icahn

Percent of portfolio: 6.5%

It's Carl Icahn again. This time we're looking at his big stake in Herbalife (HLF, $37.35), which he initiated as part of a grudge. The billionaire activist investor dedicates 6.5% of his fund's value to the multi-level marketing firm.

His 35.2 million shares in HLF are worth about $1.3 billion. Icahn became the nutritional-supplement company's largest shareholder in 2012, at least partly to hurt a rival.

Bill Ackman of Pershing Square Capital said HLF was a "fraud" and a "pyramid scheme." He expected to reap billions by shorting the name, expecting federal regulators to shut it down.

Icahn has made no secret of his contempt for Ackman. "I've really about had it with this guy," Icahn once said in an interview with CNBC. "He's like the crybaby in the schoolyard."

Ackman finally threw in the towel on his HLF short after five years. Icahn remains long and strong. Indeed, it's his third-largest holding.

SEE ALSO: 15 Mid-Cap Stocks to Buy for Mighty Returns

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 32 of 51

IQVIA Holdings

Getty Images

Advertisement
Advertisement

Market value: $27.2 billion

Billionaire investor: Bain Capital

Percent of portfolio: 17.2%

IQVIA Holdings (IQV, $142.59) isn't familiar to most investors, but one of its largest shareholders might ring a bell. Bain Capital – the private equity firm founded by current senator and one-time presidential candidate Mitt Romney – is the company's fourth largest shareholder.

IQVIA Holdings, formerly known as Quintiles and IMS Health, brings technological solutions to health-care problems. It helps life science, drug-development and even care-provider companies collect and analyze data, then use that data to bring new products to the market.

Bain holds 1.4 million shares in IQV worth about $200 million.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 33 of 51

JPMorgan Chase

Getty Images

Advertisement
Advertisement

Market value: $291.7 billion

Billionaire investor: James Hambro & Partners

Percent of portfolio: 7.1%

JPMorgan Chase (JPM, $95.76), the nation's largest bank by assets, is naturally a hit with hedge funds, but one name in particular stands out. James Hambro & Partners ($3.5 billion in AUM) is interesting because Hambro is one of Britain's richest citizens.

Known as Jamie, Hambro made the British tabloids a few years back when local authorities shot down his $2.5 million plan to connect two of his adjacent houses in London.

Hambro holds 399,178 shares in JPM worth about $38 million. The stake accounts for 7.1% of the investment firm's portfolio.

SEE ALSO: 7 Bank Stocks That Could Get a Lift From SBA Loans

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 34 of 51

Liberty Broadband

Courtesy Mike Kalasnik via Wikimedia Commons

Advertisement
Advertisement

Market value: $21.8 billion

Billionaire investor: George Soros (Soros Fund Management)

Percent of portfolio: 22.5%

Liberty Broadband (LBRDK, $122.68) is one of the largest cable-TV suppliers in the U.S., but it's not a familiar name. That's because the company makes its bones by holding a 25% interest in Charter Communications, and 100% of its Skyhook subsidiary.

A name that should be familiar to most folks is billionaire George Soros. The Hungarian-born investor is perhaps best known for making $1 billion on a trade by shorting the pound.

Less sexy but remunerative nonetheless is Soros Fund Management's stake in Liberty Broadband. With almost 23% sunk into the position, it is Soros' largest equity holding. The fund holds 5.7 million shares, making it the cable company's fifth-largest shareholder.

Advertisement
Advertisement
Advertisement

50 Top Stock Picks That Billionaires Love | Slide 35 of 51

Lowe's

Getty Images

Advertisement
Advertisement

Market value: $79.1 billion

Billionaire investor: Bill Ackman (Pershing Square Capital)

Percent of portfolio: 15.2%

Lowe's (LOW, $104.75) often plays second fiddle to Home Depot (HD), the nation's largest home improvement chain, but it has plenty to brag about as a long-term holding.

Income investors know the power of LOW. The retailer has paid a cash distribution every quarter since going public in 1961, and that dividend has increased annually for 57 years.

The stock also has the backing of one of the most recognizable billionaires on Wall Street. Bill Ackman's Pershing Square Capital holds 8.6 million shares, devoting 15.2% of its total value to LOW stock.

When Ackman initiated the position in 2018, he called on Lowe's to overhaul its marketing and supply chain to create operational efficiencies. LOW is up 13% since the end of 2018. That trails the S&P 500 by about 3 percentage points.

SEE ALSO: How to Invest in Oil Right Now

Advertisement