In this article, we discuss the 10 best stocks to buy according to billionaire Chris Rokos.
Christopher Charles Rokos was born on September 21, 1970, in London. Rokos is the founder of British alternative investment fund manager, Rokos Capital Management LLP. He gained his early education from one of England’s oldest public schools, Eton College. He studied there for five years on a scholarship before joining Pembroke College, Oxford University to study mathematics. Chris Rokos graduated from Pembroke in 1992 with a first-class honors degree.
Rokos started his career as a swap trader at Goldman Sachs in 1993 where he worked for four years. He then moved on to become a director at Credit Suisse First Boston in 1998 and worked there till 2002. In 2002, Chris Rokos along with four other directors at Credit Suisse resigned and started their asset management firm, Brevan Howard, where he worked for almost 10 years before starting his firm, Rokos Capital Management, in 2015. It is reported that Chris Rokos made almost $900 million while working at Brevan Howard. As of June 8 2022, Rokos’ net worth is estimated to be $1.5 billion according to Forbes.
Rokos Capital Management is based in London and has close to 200 employees. The firm has an economic research office in Washington DC. The investment fund manager invests in macro asset classes in developed and semi-developed markets. It includes interest rates, foreign exchange, equities, credit, and commodities. In the first year of the firm, Rokos Capital Management gained 20% and immediately after that, it had a couple of slow years till 2018. In 2019, the firm gained 9.3% and recorded a 14% gain in March 2020.
According to first-quarter 2022 13F filings, Rokos Capital Management had $2.2 billion in managed 13F securities. The firm had made 41 new stock purchases in the quarter, and increased activity in 9 stocks. Furthermore, Rokos Capital Management sold out of 26 stocks and reduced holdings in 6 stocks.
Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL) are some of the most significant names in Rokos Capital Management’s portfolio. All three of these firms are categorized as the Big Five US tech giants and they are trillion dollar companies. In January, Apple Inc. (NASDAQ:AAPL) became the first company to hit the three trillion dollar mark in market cap before dropping down in the later weeks.
In the past decade, Microsoft Corporation (NASDAQ:MSFT) has returned almost 800% to its investors, followed by Apple Inc. (NASDAQ:AAPL) at 622%. Lastly, Alphabet Inc. (NASDAQ:GOOG) has returned 331.71%.
Photo by Austin Distel on Unsplash
Our Methodology
We have picked these stocks from the first-quarter 2022 13F portfolio of Rokos Capital Management. The hedge fund sentiment around each stock has been taken from Insider Monkey’s Q1 database of 912 elite hedge funds.
Best Stocks to Buy According to Billionaire Chris Rokos
10. Analog Devices, Inc. (NASDAQ:ADI)
Rokos Capital Management’s Stake Value: $23.758 million
Percentage of Rokos Capital Management’s Portfolio: 1.09%
Number of Hedge Fund Holders: 67
The American multinational semiconductor company, Analog Devices, Inc. (NASDAQ:ADI), is one of the top picks of Rokos Capital Management. The fund owns 144,366 shares worth $23.758 million, making up 1.09% of the 13F portfolio.
According to the FQ2 2022 reports, Analog Devices, Inc. (NASDAQ:ADI) had an EPS of $2.40, outperforming the estimates by 13.67%. Additionally, after generating $2.97 billion in revenue, the company also beat the revenue estimates by $136.52 million.
Over the past 5 years, Analog Devices, Inc. (NASDAQ:ADI) stock has been up by almost 100%. The acquisition of Maxim Integrated in August 2021 has been groundbreaking for the company. Its revenue grew by 79% between May 2021 and April 2022.
Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL), along with Analog Devices, Inc. (NASDAQ:ADI), are some of the top stock picks from Chris Rokos’ portfolio.
Here is what Madison Funds had to say about Analog Devices, Inc. (NASDAQ:ADI) in its third-quarter 2021 investor letter:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
9. Bristol-Myers Squibb Company (NYSE:BMY)
Rokos Capital Management’s Stake Value: $36.97 million
Percentage of Rokos Capital Management’s Portfolio: 1.67%
Number of Hedge Fund Holders: 70
Bristol-Myers Squibb Company (NYSE:BMY) is one of the largest pharmaceutical companies. It ranks #82 among the Fortune 500 companies in 2022. In June 2022, the company announced the acquisition of Turning Point Therapeutics (NASDAQ:TPTX) for $4.1 billion in cash. The deal has been termed “fair” by Stifel analyst Bradley Canino. Rokos Capital Management owns a position worth $36.97 million in Bristol-Myers Squibb Company (NYSE:BMY), representing 1.67% of the fund’s Q1 portfolio.
Bristol-Myers Squibb Company (NYSE:BMY) surpassed its EPS and revenue estimates in the first quarter of 2022 after lagging behind the revenue estimates in the previous quarter. The company reported an EPS of $1.96, compared to the $1.89 estimates. Furthermore, Bristol-Myers Squibb Company (NYSE:BMY) surpassed the revenue estimates of $11.34 billion after generating $11.65 billion.
Insider Monkey hedge fund database reveals that in the fourth quarter of 2021, 66 hedge funds were bullish on Bristol-Myers Squibb Company (NYSE:BMY). In the first quarter of 2022, the number rose to 70 hedge funds. Two Sigma Advisors held the most prominent stake in the company, with 4.36 million shares worth $318.4 million.
8. NVIDIA Corporation (NASDAQ:NVDA)
Rokos Capital Management’s Stake Value: $37.97 million
Percentage of Rokos Capital Management’s Portfolio: 1.72%
Number of Hedge Fund Holders: 102
The multinational technology company, NVIDIA Corporation (NASDAQ:NVDA), is one of Rokos Capital Management’s favorite stocks. In the first quarter of 2022, the fund increased its activity by 57% to 135,102 shares worth $37.97 million.
In 2022, the first-quarter revenue of NVIDIA Corporation (NASDAQ:NVDA) went up by 46% year-over-year, reaching $8.29 billion. Among different segments of the company, the revenue of Omniverse – NVIDIA Corporation (NASDAQ:NVDA)’s database engine, grew by 67% YoY to $622 million. Moreover, the revenue grew by 83% to $3.7 billion in the data center segment. Finally, the adjusted (non-GAAP) earnings jumped 49% YoY to $1.36 per share.
On May 27, NVIDIA Corporation (NASDAQ:NVDA)’s price target was lowered to $165 from $225 by Baird analyst Tristan Gerra, who kept a Neutral rating on the company shares. While on May 26, Mizuho analyst Vijay Rakesh kept a Buy rating on the company shares after lowering the price target from $345 to $290.
NVIDIA Corporation (NASDAQ:NVDA) was mentioned by RiverPark Funds in its first-quarter 2022 investor letter. Here is what the firm said:
“Nvidia is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers, and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44%, and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
7. Denbury Inc. (NYSE:DEN)
Rokos Capital Management’s Stake Value: $48.3 million
Percentage of Rokos Capital Management’s Portfolio: 2.19%
Number of Hedge Fund Holders: 29
Denbury Inc. (NYSE:DEN) is a Texas-based hydrocarbon exploration and extraction company. As of December 2021, the company’s proven reserves were estimated at around 191.689 million barrels of oil equivalent. At Jackson Dome, Denbury Inc. (NYSE:DEN)’s carbon dioxide reserves are estimated to be around 910 billion cubic feet.
Denbury Inc. (NYSE:DEN)’s analyst forecast for EPS was around $1.39 for the first quarter of 2022 in February. It rose to $1.57 a month later and still, the company managed to beat the updated estimates by $0.12. Denbury Inc. (NYSE:DEN) posted a revenue of $411.86 million, compared to $251.16 million in the same quarter of 2021.
According to Rokos Capital Management’s first-quarter 2022 filings, the fund owned 592,565 shares of Denbury Inc. (NYSE:DEN), worth $48.3 million. Our database of 912 hedge funds reveals that the most significant stake in the first quarter of 2022 was held by Silver Point Capital, with 4.5 million shares worth $355.9 million, making up 17.91% of the fund’s portfolio.
6. Alphabet Inc. (NASDAQ:GOOG)
Rokos Capital Management’s Stake Value: $64.69 million
Percentage of Rokos Capital Management’s Portfolio: 2.93%
Number of Hedge Fund Holders: 160
The multinational tech conglomerate, Alphabet Inc. (NASDAQ:GOOG), was added to Rokos Capital Management’s portfolio in the first quarter of 2022. The tech giant covers 2.93% of the fund’s portfolio with shares worth $64.69 million. Alphabet Inc. (NASDAQ:GOOG) entered the trillion-dollar companies club in January 2020 and became the fourth US-based company to reach a market value of $1 trillion.
80% of Alphabet Inc. (NASDAQ:GOOG)’s revenue was generated from Google’s advertising business in the first quarter of 2022. The company’s advertising revenue was $36.5 billion in 2011 and reached $209.5 billion by 2021, at a CAGR of 19.1%. The company’s average annual growth over the next 5 years is estimated to be at the rate of 17%.
Alphabet Inc. (NASDAQ:GOOG) reduced its debt by $1 billion between March 2021-2022 from $13.8 billion to $12.8 billion. The company doesn’t seem to be affected by its debts because according to its balance sheet, it holds $134 billion in cash. The total liquid assets of Alphabet Inc. (NASDAQ:GOOG) are around $66.5 billion more than its total liabilities. Furthermore, the company’s earnings before interests and taxes also grew by 66% between 2021 and 2022.
Other than Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG) is one of the top 10 stocks to buy according to Rokos Capital Management.
Here is what Baron Funds had to say about Alphabet Inc.’s (NASDAQ:GOOG) in its first-quarter 2022 investor letter:
“We have modestly reduced the size of our position in Alphabet Inc. (NASDAQ:GOOG) (from 6.5% at the end of the fourth quarter of 2021 to 5.3% as of the end of the first quarter of 2022), after the stock rallied 64% in 2021 and continued outperforming during the first quarter, declining just 3%.”
5. Salesforce, Inc. (NYSE:CRM)
Rokos Capital Management’s Stake Value: $64.7 million
Percentage of Rokos Capital Management’s Portfolio: 2.93%
Number of Hedge Fund Holders: 114
Salesforce, Inc. (NYSE:CRM) is a cloud computing and consulting company. In addition, it provides customer relationship management software and applications. According to Rokos Capital Management’s 13F filings, in the first quarter of 2022, the firm owned 299,350 shares of Salesforce, Inc. (NYSE:CRM), worth $64.7 million. The company represents 2.93% of the fund’s portfolio after it increased its stake by 28% in the first quarter of 2022.
Salesforce, Inc. (NYSE:CRM) reported its first-quarter 2022 earnings in April. The company beat its EPS and revenue expectations by 3.73% and 0.40%, respectively. The company generated a revenue of $7.41 billion, which shows a 24% YoY growth. Salesforce, Inc. (NYSE:CRM)’s free cash flow of $3.50 billion represented a 14% year-over-year growth. On top of that, the free cash flow margin of the company rose by 47.2% in the first quarter of 2022, compared to 24.8% in the previous quarter.
On June 1, Stifel analyst J. Parker Lane lowered Salesforce, Inc. (NYSE:CRM)’s price target to $250 from $300 and kept a Buy rating on its shares. In a research note, the analyst explained that the company “delivered a solid start to the year” and product and geographic diversification gives Salesforce, Inc. (NYSE:CRM) some cushioning against a weakening macro backdrop.
Vulcan Value Partners mentioned Salesforce, Inc. (NYSE:CRM) in its first-quarter 2021 investor letter. Here are the contents of the letter:
“Salesforce.com Inc. is the dominant provider of customer relationship management software and technology. Salesforce has high retention rates, pricing power, high free cash flow, and a competitive moat. The company continues to execute well. Margins decreased slightly during the fourth quarter but continue to be on path for material expansion over the long term. Salesforce is seeing increased spending as employees are returning to the office, and we believe the global pandemic has only improved its prospects.”
4. Avino Silver & Gold Mines Ltd. (NYSE:ASM)
Rokos Capital Management’s Stake Value: $66.7 million
Percentage of Rokos Capital Management’s Portfolio: 3.02%
Number of Hedge Fund Holders: 3
Avino Silver & Gold Mines Ltd. (NYSE:ASM) is a mineral exploration company that has been a new addition to the Rokos Capital Management portfolio in the first quarter of 2022. The company makes up 3.02% of the fund’s portfolio. As a penny stock, Avino Silver & Gold Mines Ltd. (NYSE:ASM) managed to secure strong first-quarter 2022 results. The generated revenue was $11.1 million, with a net income of around $600,000 or $0.01 per share.
Alliance Global Partners analyst Jake Sekelsky reiterated a Buy rating on Avino Silver & Gold Mines Ltd. (NYSE:ASM) and increased the company’s price target from $1.40 to $1.70. Moreover, the analyst remains quite positive about the company’s acquisition of the La Preciosa project from Coeur Mining, Inc. (NYSE:CDE).
According to the Insider Monkey database, 3 hedge funds held stakes worth $67.19 million in Avino Silver & Gold Mines Ltd. (NYSE:ASM) in the first quarter of 2022, with Rokos Capital Management as the most prominent name. In the previous quarter, 3 hedge funds had stakes worth $305,000.
3. Apple Inc. (NASDAQ:AAPL)
Rokos Capital Management’s Stake Value: $99.26 million
Percentage of Rokos Capital Management’s Portfolio: 4.49%
Number of Hedge Fund Holders: 131
Among other trillion-dollar companies, Apple Inc. (NASDAQ:AAPL) also made its way into the Rokos Capital Management’s portfolio in the first quarter of 2022. The company makes up 4.49% of the 13F portfolio, with 560,960 shares worth $99.26 million. The most prominent shareholder of Apple Inc. (NASDAQ:AAPL) remains Warren Buffett’s Berkshire Hathaway.
Apple Inc. (NASDAQ:AAPL) has been launching new products since the beginning of 2022. On June 6, at the Worldwide Developers Conference, the company revealed its second-generation M2 chips after the success of its M1 chip for MacBooks. Before that, Apple Inc. (NASDAQ:AAPL) also unveiled its low-cost upgraded version of the iPhone SE as its latest 5G device. In addition to that, according to the first-quarter 2022 earnings report, the company had a revenue of $97.28 billion, compared to $93.99 billion estimates. The services revenue of the company increased by 17% YoY to $19.82 billion. Furthermore, Apple Inc. (NASDAQ:AAPL)’s home accessories and wearables sales saw a 12% surge to $8.81 billion.
On May 19, BofA analyst Wamsi Mohan lowered the price target of Apple Inc. (NASDAQ:AAPL) to $200 from $215 and maintained a Buy rating on its shares. The analyst also increased his iPhone unit estimates to 237 million for the fiscal year 2023 and 230 million for the year 2024. For the current fiscal year, the company is keeping the number of units at flat 220 million according to Bloomberg reports, compared to the estimated 240 million.
Here is what ClearBridge Investments had to say about Apple Inc. (NASDAQ:AAPL) in its fourth-quarter 2021 investor letter:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. The bulk of these contributions came from U.S. mega-cap growth stocks Apple and Microsoft which continued to uniquely act both offensively and defensively as they have through most of the pandemic.”
2. Microsoft Corporation (NASDAQ:MSFT)
Rokos Capital Management’s Stake Value: $124.768 million
Percentage of Rokos Capital Management’s Portfolio: 5.65%
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) is another one of the Big Five tech names taking up a significant part of Rokos Capital Management’s portfolio. Out of the 912 hedge funds tracked by Insider Monkey, 259 were bullish on the company with a total value of $65.6 billion. In the previous quarter, 262 hedge funds had stakes worth $75.7 billion in Microsoft Corporation (NASDAQ:MSFT). Fisher Asset Management increased its position by 4% in the first quarter of 2022 and had the largest stake in the company, with 27.87 million shares worth $8.59 billion.
On June 3, BMO Capital analyst Keith Bachman maintained an Outperform rating on Microsoft Corporation (NASDAQ:MSFT) shares and kept a price target of $345. The company announced that FX is creating a much bigger hindrance in its progress than when the guidance for the June quarter was provided. The analyst believes it to be a neutral event and remains bullish on Microsoft Corporation (NASDAQ:MSFT).
Microsoft Corporation (NASDAQ:MSFT) exceeded its EPS and revenue estimates in the first fiscal quarter of 2022. The EPS was reported at $2.22, outperforming the $2.20 forecast. Similarly, the $49.36 billion revenue exceeded the estimates by $311.18 million.
Motiwala Capital mentioned Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2021 investor letter. Here is what it had to say:
“Microsoft (NASDAQ:MSFT) re-enters our portfolio after a long gap. MSFT sells enterprise and consumer software products as well as hardware products such as the Xbox video game console and Surface laptops. All business segments experienced double-digit revenue growth and earnings per share have compounded in the mid-double digits over the last 5 years. We believe MSFT continues this momentum in the years ahead.”
1. Materials Select Sector SPDR Fund (NYSE:XLB)
Rokos Capital Management’s Stake Value: $160.9 million
Percentage of Rokos Capital Management’s Portfolio: 7.29%
Number of Hedge Fund Holders: 13
Rokos Capital Management’s largest holding is Materials Select Sector SPDR Fund (NYSE:XLB), the exchange-traded fund managed by SSGA Funds Management. The ETF is non-diversified and includes companies specializing in chemicals, metals and mining, paper and forest products, containers and packaging, and construction materials.
Rokos Capital Management increased its activity in the ETF by a staggering 1271% in the first quarter of 2022. The fund owned 4.1 million shares of the ETF worth $160.9 million.
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Disclosure: None. 10 Best Stocks to Buy According to Billionaire Chris Rokos is originally published on Insider Monkey.
