In this article, we will be taking a look at the 10 best stocks to buy now according to billionaire Marc Lasry’s Avenue Capital.
Marc Lasry, the Moroccan-American billionaire, businessman, and hedge fund manager, is the co-founder and CEO of Avenue Capital Group, a multi-strategy hedge fund. The hedge fund manages assets estimated at around $11.6 billion as of June 2022 and is focused on specialty lending, distressed debt, and other special situations investments in the US, Europe, and Asia.
On the topic of the recent market selloff, Lasry, in an interview this June with Bloomberg, commented that investors should not shy away from buying the dip. Lasry foresees that the selloff will continue till the end of 2022 and believes one should get invested while one can since the bottom cannot be timed. The billionaire also expects the US economy’s strength to cut short the market downturn. Since Lasry sees the market contraction as being short-lived in the long term, he believes that now is the time to buy the dip.
According to the billionaire, the selloff is beneficial for funds like Avenue Capital since Avenue focuses on troubled corporate debt. Lasry expects equity indices to fall by a further 5% or 10%, commenting that the downside potential is already priced in. He believes that the selloff presents many opportunities for Avenue Capital, giving the example of Exela Technologies Inc.’s (NASDAQ:XELA) debt. Lasry stated that since Avenue Capital bought Exela’s bonds at $0.35, with a yield of about 33%, it has benefited significantly from the payout, despite the risky investment. Such risk-taking has led Lasry to become one of the 25 highest-paid hedge fund managers, having brought in $280 million in annual earnings as of 2013. Now he stands at the head of Avenue Capital which boasts a portfolio valued at over $201 million. His portfolio largely comprises companies within the basic materials, services, technology, and financial sectors.
While many investors choose to invest in financially strong corporations such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Marc Lasry has a reputation for making his fortune with an investment strategy focused on distressed companies in the US. Avenue Capital aims to benefit from attractive risk-adjusted returns with its focus on distressed debt and undervalued securities of American companies. Typical targets of such an investment strategy include not only distressed securities, but also bank debt, stressed high yield debt, event-driven situations, restructured and post-reorganization equities, and trade claims. This investment strategy is to be credited for Lasry’s current fortune and net worth of $1.8 billion as of 2022, according to Forbes.
We can now take a look at the 10 best stocks to buy now according to billionaire Marc Lasry’s Avenue Capital.
Our Methodology
We have picked the top ten stocks from Avenue Capital’s latest 13F holdings as of the first quarter of 2022. According to Insider Monkey’s hedge fund data for the first quarter, these stocks are also some of the most popular names among hedge funds today. We have mentioned analyst ratings and price targets for almost every stock on our list, ensuring they have mostly positive ratings and positive upside potential. The stocks are ranked based on the value of Lasry’s stake in each company, from the lowest stake value to the highest stake value.
Best Stocks to Buy Now According to Billionaire Marc Lasry’s Avenue Capital
10. Impel NeuroPharma Inc. (NASDAQ:IMPL)
Avenue Capital’s Stake Value: $2,102,000
Percentage of Avenue Capital’s 13F Portfolio: 1.04%
Number of Hedge Fund Holders: 3
Impel NeuroPharma Inc. (NASDAQ:IMPL) is a biotechnology company based in Seattle, US. The company works to develop and commercialize therapies for patients with central nervous system disease in the US. According to Avenue Capital’s latest 13F holdings, this company falls in the fund’s top ten holdings.
At the start of 2022, Impel NeuroPharma Inc. announced that the performance of its Trudhesa since its commercial launch in October 2021 far surpassed the company’s fourth quarter of 2021 guidance. The product’s success resulted in Impel NeuroPharma Inc. securing multiple contracts with leading pharmacy benefit managers in the US.
Three hedge funds were long Impel NeuroPharma Inc. in the first quarter of 2022, with a total stake value of $20.7 million. Of the three, Vivo Capital was the largest stakeholder in the company, holding 2,884,789 shares worth about $18.4 million.
Like Amazon.com, Inc., Apple Inc., and Microsoft Corporation, Impel NeuroPharma Inc. is a stock pick investors are eyeing today.
9. Forge Global Holdings Inc. (NYSE:FRGE)
Avenue Capital’s Stake Value: $8,095,000
Percentage of Avenue Capital’s 13F Portfolio: 4.02%
Number of Hedge Fund Holders: 17
Forge Global Holdings Inc. (NYSE:FRGE) is a financials company providing marketplace infrastructure, data services, and technology solutions for private market participants. The company allows private company shareholders to trade private company shares with accredited investors.
This May, in light of Forge Global Holdings Inc.’s (NYSE:FRGE) merger with SPAC Motive Capital, positive stock activity was reported for the company’s shares. The stock shot up by 18% that month, with company shares being up 107% since the merger. Forge Global Holdings Inc. comprises over 4% of Avenue Capital’s portfolio, making it one of the best stocks to buy now according to billionaire Marc Lasry.
In the first quarter of 2022, 17 hedge funds were long Forge Global Holdings Inc.. Their total stake value was $36.8 million. In comparison, three hedge funds were long the stock in the previous quarter, with a total stake value of $1.8 million.
8. DISH Network Corporation (NASDAQ:DISH)
Avenue Capital’s Stake Value: $9,575,000
Percentage of Avenue Capital’s 13F Portfolio: 4.8%
Number of Hedge Fund Holders: 48
DISH Network Corporation (NASDAQ:DISH) is a communication services company offering pay-TV services in the US. The company operates in two segments, Pay-TV and Wireless. It makes up 4.8% of Avenue Capital’s portfolio according to the fund’s first quarter of 2022 13F holdings.
This June, Truist analyst Greg Miller maintained a Buy rating on DISH Network Corporation shares, alongside his price target of $60.
Miller also commented in May that he was positive about DISH Network Corporation’s (NASDAQ:DISH) spectrum holdings, discounted price points, potential enterprise partnerships, and an annual target market of $300 billion. Investors including billionaire Marc Lasry have shown an interest in the company as a result, making it one of the top holdings in Avenue Capital’s portfolio.
Out of 912 hedge funds, 48 hedge funds held stakes in DISH Network Corporation in the first quarter. Their total stake value was $1.8 billion. Boykin Curry’s Eagle Capital Management was the largest stakeholder in the company, holding 17,255,129 shares worth about $546 million.
Just like Amazon.com, Inc., Apple Inc., and Microsoft Corporation, DISH Network Corporation is among the most popular stock in hedge funds circles today.
7. Frontier Communications Parent Inc. (NASDAQ:FYBR)
Avenue Capital’s Stake Value: $9,891,000
Percentage of Avenue Capital’s 13F Portfolio: 4.9%
Number of Hedge Fund Holders: 48
Frontier Communications Parent Inc. (NASDAQ:FYBR) is a provider of communications services for consumer and business customers in about 25 US states. The company is a popular stock pick among over 45 hedge funds, including Lasry’s fund, making it one of the best stocks to buy now according to billionaire Marc Lasry’s Avenue Capital. It offers data and Internet, voice, video, and other services to its customers.
This May, Simon Flannery, an analyst at Morgan Stanley, upgraded Frontier Communications Parent Inc. shares to Equal Weight. The analyst also raised his price target on the stock to $25.
In July, Citi noted that it expects solid revenue growth from its wireless and broadband stocks, believing Frontier Communications Parent Inc. will outperform others in the sector due to its cheaper valuation and improvement prospects. Citi has a Buy rating on Frontier Communications Parent Inc. shares.
Our hedge fund data for the first quarter of 2022 shows 48 hedge funds long Frontier Communications Parent Inc. in that quarter. In comparison, 46 hedge funds were long the stock in the previous quarter. Their total stake values were $3.5 billion and $3.6 billion respectively.
6. Alexander’s, Inc. (NYSE:ALX)
Avenue Capital’s Stake Value: $9,903,000
Percentage of Avenue Capital’s 13F Portfolio: 4.9%
Number of Hedge Fund Holders: 7
Alexander’s, Inc. is a real estate investment trust based in New Jersey, US. The company has seven properties in the New York City metropolitan area and was founded in 1955.
Alexander’s, Inc. was among Lasry’s top holdings in the first quarter, making up almost 5% of his portfolio. The stock is also a generous dividend-payer with a yield of 7.7%, making it an attractive option for income investors. This makes it one of the best stocks to buy now according to billionaire Marc Lasry.
Seven hedge funds held stakes in Alexander’s, Inc. in the first quarter of 2022, with a total stake value of $59.1 million. Of these funds, Jim Simons’ Renaissance Technologies was the largest stakeholder in the company, holding 103,714 shares worth $26.6 million.
Just like Amazon.com, Inc., Apple Inc., and Microsoft Corporation, Alexander’s, Inc. is an attractive stock among investors today.
5. Twitter, Inc. (NYSE:TWTR)
Avenue Capital’s Stake Value: $11,753,000
Percentage of Avenue Capital’s 13F Portfolio: 5.8%
Number of Hedge Fund Holders: 68
Twitter, Inc. (NYSE:TWTR) is a major communication services company operating one of the largest and most popular social media platforms today. The company’s platform allows public self-expression and conversation alongside giving users the chance to consume, create, distribute, and discover new online content.
Barton Crockett, an analyst at Rosenblatt, upgraded shares of Twitter, Inc. to Buy this July. The analyst also raised his price target on the stock to $52.
Alongside upgrading the stock, Crockett has commented that Twitter, Inc. seems to be an attractive near-term opportunity. He added that rising information about the company’s lawsuit with Elon Musk implies that the company has more leverage. Hindenburg, an investment firm, agreed with Crockett’s positive evaluation of the stock, adding that it has gathered a significant long position in Twitter, Inc.. With such positive investor sentiment surrounding the stock, it has become one of the top holdings in Avenue Capital’s portfolio.
In the first quarter of 2022, 68 hedge funds were long Twitter, Inc., with a total stake value of $2.1 billion.
4. Paramount Global (NASDAQ:PARA)
Avenue Capital’s Stake Value: $11,921,000
Percentage of Avenue Capital’s 13F Portfolio: 5.9%
Number of Hedge Fund Holders: 40
Paramount Global (NASDAQ:PARA) is a global media and entertainment company. It distributes a schedule of news and public affairs broadcasts, alongside sports and entertainment programming. The company was formerly known as ViacomCBS Inc. and changed its name to Paramount Global this February.
Jason Bazinet, an analyst at Citigroup, holds a Buy rating on shares of Paramount Global as of this July, alongside a price target of $37. This rating and price target imply upside potential harbored by the stock, making Paramount Global one of the top stock picks for billionaire Marc Lasry’s Avenue Capital.
This July, Guggenheim analyst Michael Morris boosted second-quarter expectations for Paramount Global’s (NASDAQ:PARA) operating income to $903 million. The raise came in light of the company’s Filmed Entertainment segment which brought in $570.7 million in domestic grosses through the success of the American film Top Gun: Maverick. Morris holds a Buy rating on Paramount Global shares as of July 2022.
There were 40 hedge funds holding stakes in Paramount Global in the first quarter, with a total stake value of $3.4 billion. In the previous quarter, 64 hedge funds were long the stock, with a total stake value of about $1 billion.
3. Amplify Energy Corp. (NYSE:AMPY)
Avenue Capital’s Stake Value: $14,088,000
Percentage of Avenue Capital’s 13F Portfolio: 7%
Number of Hedge Fund Holders: 14
Amplify Energy Corp. (NYSE:AMPY) is an energy company among the top three holdings in Avenue Capital’s portfolio. It engages in the acquisition, development, exploitation, and production of oil and natural gas properties in the US.
This June, Amplify Energy Corp. announced that it had completed its semi-annual borrowing base redetermination, which affirmed the company’s borrowing base at $225 million. The company’s CEO, Martyn Willsher, commented in light of this announcement that Amplify Energy Corp. is now well-positioned to improve its liquidity position and leverage profile.
Out of 912 hedge funds, 14 hedge funds were long Amplify Energy Corp. in the first quarter of 2022. Their total stake value was about $30.3 million.
2. Vistra Corp. (NYSE:VST)
Avenue Capital’s Stake Value: $29,330,000
Percentage of Avenue Capital’s 13F Portfolio: 14.6%
Number of Hedge Fund Holders: 40
Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company. It operates through its Retail, Texas, East, West, Sunset, and Asset Closure segments. As it makes up almost 15% of Lasry’s portfolio, it is one of the best stocks to buy now according to billionaire Marc Lasry’s Avenue Capital.
According to Insider Monkey’s hedge fund data for the first quarter, 40 hedge funds were long Vistra Corp. with a total stake value of $1.6 billion. In the previous quarter too, there were 40 hedge funds long the stock, with a total stake value then of $1.5 billion.
1. Diamond Offshore Drilling Inc. (NYSE:DO)
Avenue Capital’s Stake Value: $89,391,000
Percentage of Avenue Capital’s 13F Portfolio: 44.5%
Number of Hedge Fund Holders: 12
Diamond Offshore Drilling Inc. (NYSE:DO) is another energy company in Avenue Capital’s 13F holdings. The company provides contract drilling services to the energy industry worldwide.
Diamond Offshore Drilling Inc. had total liquidity of $388 million as of this March, including $54 million in unrestricted cash. It is Avenue Capital’s largest holding, making up almost 45% of the fund’s portfolio, and is thus among the top stock recommendations from billionaire Marc Lasry.
Diamond Offshore Drilling Inc. had 12 hedge funds holding stakes in it in the first quarter. Their total stake value was $138 million.
You can also take a look at Billionaire David Abrams’ Top Stock Picks and 10 Most Expensive Luxury Brands In The World.
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This article is originally published at Insider Monkey.
