In this article, we discuss 10 best stocks to buy according to billionaire Jeffrey Talpins. If you want to see the top 5 holdings of the billionaire, click 5 Best Stocks to Buy According to Billionaire Jeffrey Talpins.
Jeffrey Talpins is the chief investment officer of Element Capital Management, a New York-based hedge fund he founded in 2005. Jeffrey Talpins employs options trading strategies to benefit from global economic opportunities and contain potential losses. He is a Yale University graduate in economics and applied mathematics, with a focus on finance.
Billionaire Jeffrey Talpins’ Element Capital Management portfolio for Q4 2021 was worth over $1.5 billion, a sharp increase from about $229 million in the third quarter of 2021. The hedge fund’s investments are concentrated in the healthcare, consumer staples, consumer discretionary, information technology, and communications sectors.
In the fourth quarter of 2021, Jeffrey Talpins’ Element Capital Management purchased 36 new stocks, sold 28 securities entirely, and reduced holdings in 6 companies. The hedge fund’s top buys in Q4 2021 were The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and Pfizer Inc. (NYSE:PFE). Whereas, Element Capital Management sold out of StoneCo Ltd. (NASDAQ:STNE), SentinelOne, Inc. (NYSE:S), and Coursera, Inc. (NYSE:COUR).
Some of the most notable stocks in billionaire Jeffrey Talpins’ hedge fund portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and Moderna, Inc. (NASDAQ:MRNA), among others discussed in detail below.
Our Methodology
We used the Q4 2021 portfolio of billionaire Jeffrey Talpins’ Element Capital Management for this analysis, selecting the hedge fund’s top 10 stock picks.
Jeffrey Talpins of Element Capital
Best Stocks to Buy According to Billionaire Jeffrey Talpins
10. Mondelez International, Inc. (NASDAQ:MDLZ)
Element Capital Management’s Stake Value: $47,352,000
Percentage of Element Capital Management’s 13F Portfolio: 3.04%
Number of Hedge Fund Holders: 40
Mondelez International, Inc. (NASDAQ:MDLZ) is an American multinational company that sells confectionery products, snacks, and beverages in Latin America, North America, Asia, the Middle East, Africa, and Europe. Some of the notable Mondelez International, Inc. (NASDAQ:MDLZ) brands include Belvita, Chips Ahoy!, Oreo, LU, Sour Patch Kids, Peek Freans, Toblerone, Cadbury, and Trident.
Billionaire Jeffrey Talpins acquired 714,103 shares of Mondelez International, Inc. (NASDAQ:MDLZ) in the fourth quarter of 2021, worth $47.35 million, representing 3.04% of the total 13F portfolio.
In its earnings report for the first fiscal quarter of 2022, published on April 26, Mondelez International, Inc. (NASDAQ:MDLZ) posted an EPS of $0.84, beating consensus estimates by $0.09. Revenue for the period jumped 7.27% year-over-year to $7.76 billion, topping analysts’ predictions by about $294 million.
On April 25, Mondelez International, Inc. (NASDAQ:MDLZ) entered an agreement with Grupo Bimbo to acquire its confectionery business, Ricolino, for approximately $1.3 billion. The acquisition will allow Mondelez International, Inc. (NASDAQ:MDLZ) to increase its presence in Mexico and scale in primary snacking categories like chocolate. The transaction will be financed via issuance of debt and cash on hand, and the deal is expected to conclude at the end of Q3 or early Q4 2022.
Mizuho analyst John Baumgartner on April 27 maintained a Buy recommendation on Mondelez International, Inc. (NASDAQ:MDLZ) but lowered the price target on the shares to $75 from $77. The analyst told investors that the company delivered a significant revenue and earnings beat in Q1 due to strong pricing, volume, and margins.
According to Insider Monkey’s Q4 data, 40 hedge funds were bullish on Mondelez International, Inc. (NASDAQ:MDLZ), compared to 46 funds in the prior quarter. The total stakes owned in Q4 2021 amounted to $1.4 billion. Ric Dillon’s Diamond Hill Capital is the leading stakeholder of the company, with 9.2 million shares worth $611 million.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and Moderna, Inc. (NASDAQ:MRNA), elite investors are pouring into Mondelez International, Inc. (NASDAQ:MDLZ).
9. CVS Health Corporation (NYSE:CVS)
Element Capital Management’s Stake Value: $57,498,000
Percentage of Element Capital Management’s 13F Portfolio: 3.69%
Number of Hedge Fund Holders: 71
CVS Health Corporation (NYSE:CVS) was founded in 1963 and is headquartered in Woonsocket, Rhode Island. The company operates as a healthcare provider and pharmacy benefit manager in the United States. In Q4 2021, Jeffrey Talpins held 557,369 shares of CVS Health Corporation (NYSE:CVS), worth $57.4 million, representing 3.69% of the total 13F securities.
On May 4, CVS Health Corporation (NYSE:CVS) reported its Q1 2022 results, posting earnings per share of $2.22, exceeding market estimates by $0.08. Revenue for the quarter jumped 11.19% year-over-year to $76.83 billion, outperforming analysts’ predictions by $1.53 billion. Deutsche Bank analyst George Hill on May 5 raised the price target on CVS Health Corporation (NYSE:CVS) to $113 from $110 and kept a Hold rating on the shares after the “modest” Q1 beat.
CVS Health Corporation (NYSE:CVS) declared on March 9 a $0.55 per share quarterly dividend, in line with previous. The dividend was distributed on May 2, to shareholders of the company as of April 22. The company’s dividend yield on May 6 came in at 2.25%.
According to Insider Monkey’s database, CVS Health Corporation (NYSE:CVS) was found in the public stock portfolios of 71 hedge funds at the end of December 2021, compared to 61 funds in the earlier quarter. Harris Associates is the biggest shareholder of the company, with more than 7 million shares worth $734.10 million.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about CVS Health Corporation (NYSE:CVS) in its Q4 2021 investor letter:
“Improving health remains a key impact theme for the portfolio, and over the past year or so we have increased our exposure to the health care sector, through the addition of CVS Health, which is well-positioned to help define the future of health care in terms of costs, quality and convenience.”
8. Costco Wholesale Corporation (NASDAQ:COST)
Element Capital Management’s Stake Value: $72,438,000
Percentage of Element Capital Management’s 13F Portfolio: 4.66%
Number of Hedge Fund Holders: 57
Billionaire Jeffrey Talpins’ hedge fund added Costco Wholesale Corporation (NASDAQ:COST), the American multinational big box retailer, to its Q4 portfolio by purchasing 127,599 shares worth $72.4 million, representing 4.66% of the total 13F holdings. On May 4, Costco Wholesale Corporation (NASDAQ:COST) reported April comparable sales growth of 12.6%, with net sales increasing 13.9% year-over-year at $17.33 billion.
Costco Wholesale Corporation (NASDAQ:COST) on April 13 declared a $0.90 per share quarterly dividend, a 13.9% increase from its prior dividend of $0.79. The dividend is payable on May 13, to shareholders of record on April 29.
On May 5, Stifel analyst Mark Astrachan raised the price target on Costco Wholesale Corporation (NASDAQ:COST) to $565 from $555 and reiterated a Buy rating on the shares after the company reported total and U.S. primary April comp growth that came in above consensus. The analyst continues to view the company as “a best-in-class retailer and a core holding for large-cap consumer investors”.
According to the fourth quarter database of Insider Monkey, Costco Wholesale Corporation (NASDAQ:COST) was part of the public stock portfolios of 57 hedge funds, compared to 55 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the largest shareholder of the company, with 4.2 million shares worth $2.4 billion.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2021 investor letter:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
7. Netflix, Inc. (NASDAQ:NFLX)
Element Capital Management’s Stake Value: $75,509,000
Percentage of Element Capital Management’s 13F Portfolio: 4.85%
Number of Hedge Fund Holders: 113
Netflix, Inc. (NASDAQ:NFLX) is a California-based streaming service and production company. Billionaire Jeffrey Talpins’ Element Capital Management purchased 125,338 Netflix, Inc. (NASDAQ:NFLX) shares in Q4 2021, worth $75.5 million, representing 4.85% of the total 13F portfolio.
On April 19, Netflix, Inc. (NASDAQ:NFLX) reported earnings for Q1 2022, posting an EPS of $3.53, topping analysts’ consensus estimates by $0.61. The revenue jumped 9.83% year-over-year to $7.87 billion, falling short of market predictions by $75.56 million.
Citi analyst Jason Bazinet on April 21 maintained a Buy recommendation on Netflix, Inc. (NASDAQ:NFLX) but lowered the price target on the shares to $295 from $450 following the Q1 results. However, after the recent sell off, he believes most of the downside risk is already priced into the equity. At current levels, investors do not appear to be giving Netflix, Inc. (NASDAQ:NFLX) much credit for the “significant improvement in the business”, the analyst told investors in a research note.
According to the Q4 database of Insider Monkey, 113 hedge funds were long Netflix, Inc. (NASDAQ:NFLX), compared to 106 funds in the preceding quarter. The total stakes held by elite hedge funds in Q4 2021 amounted to $14.4 billion. Boykin Curry’s Eagle Capital Management is a significant shareholder of the company, with 2.6 million shares worth $1.60 billion.
Here is what RiverPark Long/Short Opportunity Fund has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q1 2022 investor letter:
“Netflix is the global streaming TV leader and is more than twice the size of Hulu, Amazon Prime Video and Disney+. And yet, with an estimated 800 million+ global pay-tv subscribers (excluding China) yet to adopt streaming, we believe Netflix still has a large runway for continued subscriber growth. In addition to its growth opportunities in traditional TV and movie streaming, the company also recently launched a mobile gaming service that opens an additional $100 billion-plus market for future growth. Netflix has spent over a decade building its global footprint of subscribers as well as its now deep library of both global and local content and is now transitioning to accelerating its margins and free cash flow generation.
We believe that 2022 is an inflection year for Netflix as management has stated that the company should finally become and then remain FCF positive for the foreseeable future. A combination of price increases and a stabilization of content investments should position the company to continue its mid-teens annual revenue growth while driving improved operating margin to north of 30% over the next few years (revenue grew 19% for 2021 and operating margin was 21%, up from 10% in 2018). We also believe that the stabilization of content spend should allow the company to materially scale its annual free cash flow (which can be used to retire debt, accelerate growth and/or return to shareholders). We took advantage of the over 50% drop in the company’s shares over the last several months to initiate a small position in this world class innovative growth leader.”
6. Eli Lilly and Company (NYSE:LLY)
Element Capital Management’s Stake Value: $86,771,000
Percentage of Element Capital Management’s 13F Portfolio: 5.58%
Number of Hedge Fund Holders: 61
Eli Lilly and Company (NYSE:LLY) is an American pharmaceutical company that sells its products in about 125 countries. Billionaire Jeffrey Talpins’ Element Capital Management added 314,138 shares of Eli Lilly and Company (NYSE:LLY) to its fourth quarter portfolio, worth $86.7 million, representing 5.58% of the total 13F holdings.
On May 2, Eli Lilly and Company (NYSE:LLY) declared a quarterly dividend of $0.98 per share, in line with previous. The dividend is distributable on June 10, to shareholders of record on May 16. The company’s dividend yield on May 6 stood at 1.35%.
Eli Lilly and Company (NYSE:LLY) posted its Q1 2022 results on April 28, reporting earnings per share of $2.62, above consensus estimates by $0.32. The $7.81 billion revenue jumped 14.76% from the prior-year quarter, outperforming market forecasts by $457.21 million.
Mizuho analyst Vamil Divan on May 2 raised the price target on Eli Lilly and Company (NYSE:LLY) to $356 from $315 and reiterated a Buy rating on the shares. The company’s “relatively soft” quarter was overshadowed by “impressive” top-line data for tirzepatide in the overweight/obese target audience, the analyst told investors in a bullish thesis. He expects tirzepatide’s approval in diabetes in the upcoming weeks and a “relatively rapid launch”, with even more notable uptake after an obesity approval, which he expects in 2024 “but could come earlier”.
Among the hedge funds tracked by Insider Monkey, 61 hedge funds were long Eli Lilly and Company (NYSE:LLY) at the end of December 2021, with collective stakes worth $5.30 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held a significant position in the company, with more than 2 million shares valued at approximately $591 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and Moderna, Inc. (NASDAQ:MRNA), Eli Lilly and Company (NYSE:LLY) is a significant stock in the Q4 portfolio of billionaire Jeffrey Talpins.
Here is what Saturna Capital Amana Funds has to say about Eli Lilly and Company (NYSE:LLY) in its Q4 2021 investor letter:
“Industrials and pharmaceutical companies were among the Amana Income Fund’s strongest performers in the fourth quarter. Industrials and pharmaceutical companies were among the Amana Income Fund’s strongest performers in the fourth quarter. Drugmaker Eli Lilly is represented in the 10 Largest Contributors.”
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Disclosure: None. 10 Best Stocks to Buy According to Billionaire Jeffrey Talpins is originally published on Insider Monkey.
