In this article, we will be discussing the 10 Best Stocks to Buy in 2022 According to Billionaire Richard Chilton.
Richard Lockwood Chilton Jr. is an American businessman and investor and currently serves as the founder, Chairman, Chief Executive Officer, and Chief Investment Officer of Chilton Investment Company, a global investment management firm founded by the billionaire in 1992.
Chilton Investment Company directs its primary focus on equities, occupying a fundamental bottom-up approach to its investments “with an ownership mentality”, all the while generating lucrative long-term revenues with incredibly limited volatility. The firm utilizes long/short and long-only investment strategies, and is renowned globally for taking long positions in underpriced stocks while selling short overpriced shares. Furthermore, the company also takes long positions in other stocks, actively searching for undervalued securities.
As of Q1 2022, Chilton Investment Company’s portfolio is heavily concentrated with large investments in the materials, information technology, healthcare, finance, consumer discretionary, consumer staples and transport sectors, with its 13F portfolio worth over $4.16 billion. This value was the result of a depreciation from the previous quarter where the portfolio was valued at around $4.7 billion. Over the past decade however, Chilton Investment Company has delivered remarkable returns, gaining 18.57% in 2013 and 13.99% in 2015. The hedge fund depreciated 13.66% back in 2016 but made a strong comeback in 2017, generating a 12.18% return to shareholders.
In Q1 2022, Chilton Investment Company made investments in 11 new stocks, relinquished its position in 20 companies, and reduced its holdings overall in 64 stocks. Some popular holdings in Chilton Investment Company’s 13F portfolio include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
Richard Chilton of Chilton Investment Company
Our Methodology
Stocks from Richard Chilton’s 13F portfolio for the first quarter of 2022 have been included in this list. Some of these stocks are new picks of Richard Chilton. In other stocks, he has increased his stakes as compared to the previous quarter.
10. Danaher Corp. (NYSE:DHR)
Chilton Investment Company’s Stake Value: $157M
Percentage of Chilton Investment Company’s 13F Portfolio: 3.78%
Number of Hedge Fund Holdings: 83
Based in Washington D.C., Danaher Corporation (NASDAQ:DHR) is a globally diversified American conglomerate company and it designs, manufactures and markets medical, industrial, professional and commercial products and services. The company is diversified into 3 primary platforms: Life Sciences, Diagnostics and Environmental and Applied Solutions.
Richard Chilton’s Chilton Investment Company owns 536,618 shares with an estimated stake value of $157 million in Danaher Corporation (NASDAQ:DHR), in the first quarter of 2022.
In their Q1 2022 investor letter, Cooper Investors Global Equities Fund mentioned Danaher Corporation (NASDAQ:DHR). This is what they had to say:
“This combination of attributes was not in favor during a quarter where the market rotated into larger, more traditional index heavyweights that, while growing more slowly and generating lower returns on capital, typically trade on lower headline multiples. In Healthcare for example, we saw portfolio holdings Danaher (NASDAQ:DHR) fall 10-15% in the quarter. Given the relative business quality and growth prospects for a life sciences capital allocator champion like Danaher (NASDAQ:DHR) versus a large diversified pharma company, we think this period of underperformance is likely more a blip than a trend.”
Hence, like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Danaher Corporation (NASDAQ:DHR) is one of the most prominent stocks in Chilton’s portfolio.
9. Automatic Data Processing Inc. (NASDAQ:ADP)
Chilton Investment Company’s Stake Value: $2.5M
Percentage of Chilton Investment Company’s 13F Portfolio: 0.06%
Number of Hedge Fund Holdings: 47
Headquartered in Paterson, New Jersey, Automatic Data Processing Inc. (NASDAQ:ADP) is an American company which specializes in the provision of HR management software and services.
Chilton Investment Company owns 11,007 shares in the human resource giant, with total stakes valued at $2.5 million. This is a result of Chilton solidifying his hold over the stock by 25% in Q1 as compared to Q4 2021, with Automatic Data Processing Inc. (NASDAQ:ADP) contributing 0.06% to Chilton’s 13F investment portfolio for the first quarter of 2022.
8. Pool Corp. (NASDAQ:POOL)
Chilton Investment Company’s Stake Value: $106M
Percentage of Chilton Investment Company’s 13F Portfolio: 2.56%
Number of Hedge Fund Holdings: 42
Headquartered in Covington, Louisiana, Pool Corporation (NASDAQ:POOL) is an American conglomerate which specializes in the provision of swimming pool equipment, and agricultural and construction products and services. Electrical components, tiles, hardscapes, safety equipment, and commercial pumps and filters are examples of some of their products.
As of the first quarter of 2022, Robert Caruso’s Select Equity Group owns a total of 966,232 shares of the company which are valued at around $408 million, making the hedge fund the largest shareholder of the company.
In their Q4 2021 investor letter, Wasatch Global Investors, an investment management firm, mentioned Pool Corporation (NASDAQ:POOL) in their investor letter, a copy of which can be obtained here. This is what they had to say:
“An example of a company with what we consider a superior long-term business model is Pool Corp. (NASDAQ:POOL), a wholesale distributor of swimming pools and related supplies. The company’s customers include more than 120,000 contractors and retailers. Pool (NASDAQ:POOL) offers approximately 200,000 national-brand and private-label products from more than 2,000 suppliers. In an industry characterized by fragmented suppliers and fragmented customers, the company has become the premier consolidator of product distribution. We’ve owned Pool (NASDAQ:POOL) for over 20 years (Sam was involved in our initial research of the company), and over this time, the stock has had several periods in which it was down more than 20%. In hindsight, each of these down periods was simply a great buying opportunity. While investors have fretted from time to time over how inflation, interest rates, economic cycles and home-construction statistics would affect backyard recreation, Pool Corp. (NASDAQ:POOL) has remained focused on service improvements. And these improvements have turned out to be much more important than periodic macro trends.
Our general view regarding such trends is that if they’re truly important, they’ll show up in our company-specific fundamental analysis. So while other investors ponder index performance and trends like “growth” versus “value” cycles, we’ll stay focused on business-model quality—which tends to influence the long-term power of sales, earnings and cash flows.”
It is for these reasons that Pool Corp. (NASDAQ:POOL) has been able to cement its place in Chilton’s 13F portfolio alongside well-known stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
7. Blackstone Inc. (NYSE:BX)
Chilton Investment Company’s Stake Value: $68.1M
Percentage of Chilton Investment Company’s 13F Portfolio: 1.63%
Number of Hedge Fund Holdings: 61
Founded in 1985 as a mergers and acquisition firm by Peter G. Peterson and Stephen A. Schwarzman, Blackstone Inc. (NYSE:BX) is an alternative investment management company based in New York City. It was converted from a publicly traded company to a C-type corporation in 2019 and Blackstone’s (NYSE:BX) private equity business has cemented itself as one of the biggest investors in leveraged buyouts in the last thirty years. Moreover, Blackstone’s (NYSE:BX) real estate business has captured the real estate market in unprecedented ways. As of Q4 2021, the company had $880 billion worth of assets under management.
As the first quarter of the fiscal 2022 drew to a close, 61 hedge funds were reported to be long Blackstone Inc. (NYSE:BX), with total stakes valued at $2.84 billion. In the first quarter of 2022, D.E. Shaw has emerged as the largest shareholder in the stock, owning more than 2.9 million shares worth around $371 million.
Chilton Investment Company owns 536,904 shares which are valued at more than $68.1 million. Chilton’s confidence in Blackstone Inc. (NYSE:BX) is evident as the billionaire investor increased his hold over the stock by a staggering 176% in Q1. The stock now makes up for 1.56% of Chilton’s 13F portfolio.
Aristotle Capital Management, an independent, employee-owned investment management organization, mentioned Blackstone Inc. (NYSE:BX) in their Q1 2022 investor letter. This is what they had to say:
“Founded by its current CEO Stephen Schwarzman and Pete Peterson in 1985, Blackstone (NYSE:BX) is one of the largest alternative asset managers in the world, with more than $880 billion of assets under management (AUM). The firm creates and manages investment vehicles that span asset classes globally and serve both institutional clients as well as high-net-worth individuals. Its core business segments include Real Estate (34% of fee-earning AUM), Credit and Insurance (31%), Private Equity (24%), and Hedge Fund Solutions (11%).
Blackstone (NYSE:BX) has leveraged its broad product portfolio and enviable investment performance to not only raise substantial amounts of capital but also maintain its reputation as a one-stop shop for investors looking to gain exposure to alternative assets. In contrast to traditional asset managers that rely on investor inaction to keep redemption rates low, the products offered by alternative asset managers typically have lockup periods that prevent redemptions for a substantial amount of time (often 10+ years).
High-Quality Business
Some of the quality characteristics we have identified for Blackstone (NYSE:BX) include:
-Reputable management team that has produced an admirable track record of investment performance and demonstrated its ability to raise capital (the firm is now 9x larger since its 2007 IPO);
-Stable client base and sticky asset base with 73% of its capital locked up for over 10 years; and
-Significant scale and strong brand that provides a myriad of advantages, including for distribution and new product launches.
Attractive Valuation
Based on our estimates of normalized earnings, we believe shares of Blackstone (NYSE:BX) are offered at a discount relative to our estimate of intrinsic value. It is our view that current valuation does not appropriately reflect our estimated future levels of fee-based revenue.
Compelling Catalysts
Catalysts we have identified for Blackstone (NYSE:BX), which we believe will cause its stock price to appreciate over our three- to five- year investment horizon, include:
-Increased fee-based revenue as dry powder committed capital that has yet to be invested is deployed. As of the fourth quarter of 2021, there was a total of $136 billion in dry powder across the firm;
-Given its scale and sustained investment prowess, Blackstone is uniquely positioned to benefit from the secular shift in investor allocation away from traditional managers and toward less liquid and higher expected return strategies in the alternative asset management sector; and
-Further penetration in the retail and private wealth channel, a segment of investors that has historically been excluded from participating in alternative assets. Blackstone (NYSE:BX) has a first-mover advantage in providing institutional-quality products across its expanding distribution teams that focus on financial advisors.”
6. First of Long Island Corp. (NASDAQ:FLIC)
Chilton Investment Company’s Stake Value: $3.4M
Percentage of Chilton Investment Company’s 13F Portfolio: 0.08%
Number of Hedge Fund Holdings: 9
Founded in 1927, The First of Long Island Corp. (NASDAQ:FLIC) operates as a holding company for The First National Bank of Long Island, and is based out of Glen Head, New York. The company provides financial services to small and medium sized businesses, professionals, consumers, municipalities and other organizations. In addition to that, The First of Long Island Corp. (NASDAQ:FLIC) offers business and small business checking, personal and non-personal money market, savings, time deposit, holiday club, and individual retirement accounts.
5. Alphabet Inc. (NASDAQ:GOOG)
Chilton Investment Company’s Stake Value: $91.1M
Percentage of Chilton Investment Company’s 13F Portfolio: 2.18%
Number of Hedge Fund Holdings: 205
Out of more than 900 hedge funds tracked by Insider Monkey, Alphabet Inc. (NASDAQ:GOOG) has featured in the portfolios of 205. As of Q1 2022, Ken Griffin’s Citadel Investment Group is the largest stakeholder in the company, owning over 3.4 million shares worth more than $9.6 billion. Chilton Investment Company is relatively more held back in the amount of value they have placed in the stock, owning 32,749 shares worth only $91.1 million. This marks Chilton increasing his interest in the stock by a staggering 1344%, with Alphabet Inc. (NASDAQ:GOOG) comprising 2.18% of the billionaire’s investment portfolio.
On April 19, Rosenblatt analyst Barton Crockett bestowed Alphabet Inc. (NASDAQ:GOOG) with a ‘Buy’ rating and $4,183 price target. He maintained Alphabet Inc. (NASDAQ:GOOG) is best-positioned to capitalize on the growing online multiverse, given its “advantageous positioning for new ad privacy restrictions, dominance in viral video and emerging success in cloud services”.
Here is what Baron Financial Group, an investment management firm had to say about Alphabet Inc. (NASDAQ:GOOG) in their Q1 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%.”
4. S&P Global Inc. (NYSE:SPGI)
Chilton Investment Company’s Stake Value: $35.9M
Percentage of Chilton Investment Company’s 13F Portfolio: 0.86%
Number of Hedge Fund Holdings: 97
S&P Global Inc. (NYSE:SPGI) is based in Manhattan, New York City and is a publicly traded corporation which specializes in financial information and analytics. It parents S&P Global Ratings, S&P Global Market Intelligence, S&P Global Mobility, and S&P Global Engineering Solutions among other ventures. S&P Global Inc. (NYSE:SPGI) has a dividend yield of 3.40% as of June 28 and its second quarter dividend payout of $0.85 per share was due on June 10, in line with its consistent quarterly payout history. S&P Global Inc. (NYSE:SPGI) has been punctually paying dividends since 1937 and has been raising its dividend per share consecutively for 48 years.
As of Q1 2022, 97 hedge funds have reported bullish bets on the company, with Chris Hohn’s TCI Fund Management being the top stakeholder, owning shares worth nearly $2.8 billion. S&P Global Inc. (NYSE:SPGI) is the majority owner of S&P Dow Jones Indices which maintains the famously followed S&P 500 Index that tracks the 500 largest companies. Some prominent ones include the likes of Microsoft Corporation (NASDAQ:MSFT), Visa Inc. (NYSE:V) and Mastercard Incorporated (NYSE:MA).
Richard Chilton’s Chilton Investment Group owns 87,519 shares that have been valued at around $35.9 million, a result of Chilton increasing his hold over the stock by 3117% with S&P Global Inc. (NYSE:SPGI) making up 0.86% of Chilton’s 13F portfolio.
Cooper Investors, an investment management firm, mentioned S&P Global Inc. (NYSE:SPGI) in their Q1 2022 investor letter, a copy of which can be obtained here. This is what they had to say:
“This quarter, S&P Global announced the successful completion of its acquisition of IHS Markit. The deal makes S&P a global leader across the information services industry. The Fund has been long term shareholders of S&P, building a position back in 2015 when the organization was still named McGraw-Hill Financial. We saw the initial opportunity as it refocused the business from a publishing and financial conglomerate towards its core data and financial assets. S&P’s credit ratings, benchmarks and analytics businesses in global capital and commodity markets carry leading positions, defensible offerings, consistent growth and high margins – as true today as it was seven years ago. With the increased focus management have applied over a lengthy period we see improved revenue growth, margins and cash flows…”
3. Canada Goose Holdings (NYSE:GOOS)
Chilton Investment Company’s Stake Value: $1.8M
Percentage of Chilton Investment Company’s 13F Portfolio: 0.04%
Number of Hedge Fund Holdings: 17
Founded under the name of Metro Sportswear Ltd. in 1957, Canada Goose Holdings Inc. (NYSE:GOOS) is a Canadian holding company of winter clothing manufacturers based in Toronto, Canada. It serves retail stores in cities across the United States, Canada, Japan and the UK, marketing a wide array of products including jackets, parkas, vests, hats, gloves, shells and other apparel, selling them online and wholesale. The brand is primarily known for its distinctive red, blue and white circular logo. Bill Miller’s Miller Value Partners is the majority shareholder of Canada Goose Holdings Inc. (NYSE:GOOS), with shares worth more than $33.5 million. The steady increase in hedge fund holdings indicate an increase in investor interest in the stock.
Chilton has capitalized on this increased interest by buying 70,185 shares this last quarter, cementing a significant stake in Canada Goose Holdings Inc. (NYSE:GOOS) of $1.8 million. This has led to the company making up 0.04% of Chilton’s 13F portfolio this fiscal quarter.
In their Q1 2020 investor letter, this is what investment management firm Miller Value Partners had to say about Canada Goose Holdings Inc. (NYSE:GOOS):
“Canada Goose (NYSE:GOOS) is a premium luxury brand focused on outerwear. It was one of the first to announce problems from the pandemic because of its Asian presence. The stock was $55 a year ago, over $30 in February and $21 today. While this one looks more expensive on today’s numbers at 22x earnings, this unique kind of brand typically trades for a premium and we believe it still has nice growth potential. We think it has greater than 50% recovery potential plus the ability to compound capital over the long term.”
2. Booz Allen Hamilton Holding Corp. (NYSE:BAH)
Chilton Investment Company’s Stake Value: $9.7M
Percentage of Chilton Investment Company’s 13F Portfolio: 0.23%
Number of Hedge Fund Holdings: 29
Based in McLean, Virginia, Booz Allen Hamilton Holding Corp (NYSE:BAH) parents Booz Allen Hamilton Inc. and is an American management and information technology consulting firm. With over 80 offices around the globe, the company specializes in the provision of consulting, analysis and engineering services to public and private sector organizations and non-profits. Prominent members of the US Senate have held stakes in Booz Allen Hamilton Holding Corp (NYSE:BAH) including Tom Carper and Bill Hagerty.
Chilton’s Chilton Investment Company is relatively more conservative in their ownership of the stock, owning 111,005 shares worth more than $9.7 million. Booz Allen Hamilton Holding Corp (NYSE:BAH) was not a part of Chilton’s investment portfolio in the previous quarter, and Chilton’s confidence in the stock is indicated in Booz Allen Hamilton Holding Corp (NYSE:BAH) making up for 0.23% of Chilton Investment Company’s 13F portfolio for the first quarter of 2022.
1. NVIDIA Corporation (NASDAQ:NVDA)
Chilton Investment Company’s Stake Value: $2.5M
Percentage of Chilton Investment Company’s 13F Portfolio: 0.06%
Number of Hedge Fund Holdings: 102
Based in Santa Clara, California, Nvidia Corporation (NASDAQ:NVDA) is an American multinational company which is incorporated in Delaware, and deals in graphics processing units (GPUs), application programming interface (APIs) for data science and high-performance computing as well as system on a chip units (SoCs) for the mobile computing and automotive market. Founded in 1993, Nvidia (NASDAQ:NVDA) has since emerged as a global giant in artificial intelligence hardware & software from edge to cloud computing. They have expanded their presence in the gaming industry with the launch of handheld gaming consoles Shield Portable, Shield Tablet, and Shield Android TV and its cloud gaming service GeForce Now. Of late, Nvidia (NASDAQ:NVDA) has also entered the mobile computing market where it deals in Tegra mobile processors for smartphones and tablets as well as vehicle navigation and entertainment systems.
Nvidia (NASDAQ:NVDA) is a great point of interest for elite hedge funds, with 102 hedge funds including Nvidia (NASDAQ:NVDA) in their 13F portfolios. Griffin’s Citadel Investment Group is by far the largest stakeholder in the stock, owning more than 15.1 million shares worth $4.1 billion. Richard Chilton included Nvidia (NASDAQ:NVDA) in his investment portfolio in Q1 2022 by buying 9,154 shares worth at around $2.5 million. Hence, Nvidia (NASDAQ:NVDA) makes up for almost 0.06% of Chilton’s 13F portfolio.
In their Q1 2022 investor letter, investor management firm RiverPark Capital Management mentioned NVIDIA Corporation’s (NASDAQ:NVDA). This is what they 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.”
Follow Insider Monkey on Twitter
Suggested Articles:
