Billionaire Richard Chilton’s Top Stock Picks Include Dollar General Corp. (DG)

Page 1 of 2

Insider Monkey tracks quarterly 13F filings from hundreds of hedge funds, including billionaire Richard Chilton’s Chilton Investment Company- whose most recent filing discloses positions in Sherwin-Williams Company (NYSE:SHW) and Dollar General Corp. (NYSE:DG).

We’ve found that investors can use 13Fs in a number of ways. First, they provide information which can be helpful in developing investment strategies: the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy) and our own portfolio using this strategy has outperformed the S&P 500 by 33 percentage points over the last 11 months. Second, even if an investor doesn’t want to blindly follow a manager’s picks these stocks can be useful as initial investment ideas. Read on for our thoughts on the five largest positions in Chilton’s portfolio as of the end of June and compare these picks to previous filings.

The fund’s top pick is still specialty chemicals company W.R. Grace & Co. (NYSE:GRA); the company’s products include “cracking” catalysts used by refiners in the production of transportation fuels. W.R. Grace & Co. (NYSE:GRA)’s earnings rose by nearly 20% last quarter compared to the second quarter of 2012, though sales were actually down slightly and we would be concerned that earnings growth coming entirely from higher net margins is unsustainable. Tiger Cub John Griffin’s Blue Ridge Capital had owned 3 million shares of the stock at the end of the first quarter of 2013 (research more stocks Blue Ridge owned).

CHILTON INVESTMENT COMPANYPaint and coatings manufacturer and retailer Sherwin-Williams Company (NYSE:SHW) was another of Chilton’s favorite stocks. The company has become seen as a way to play the housing market, as paint and finish jobs are common for sellers and flippers of houses as well as for eventual buyers to make desired changes. The stock is up over 130% in the last two years. With moderate growth in the financials, this has resulted in trailing and forward P/Es of 27 and 19 respectively which may be a bit high. Renaissance Technologies, founded by billionaire Jim Simons, had been buying the stock earlier this year (see Renaissance’s stock picks).

Chilton and his team added a small number of shares of Dollar General Corp. (NYSE:DG) since their previous 13F filing for a total of 3.1 million shares. As a dollar store, the company has little exposure to the overall economy and so the stock’s beta is only 0.1. Dollar General Corp. (NYSE:DG) trades at 19 times trailing earnings, so markets have priced in some future growth; profits rose only 3% in its fiscal Q1 (which ended in early May) versus a year earlier. Lone Pine Capital, managed by billionaire and Tiger Cub Stephen Mandel, has been another major shareholder in Dollar General Corp. (NYSE:DG) (find Mandel’s favorite stocks).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!