In this article, we will take a look at the 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
Born in 1945, Bruce Kovner is an American billionaire hedge fund manager and philanthropist with an estimated net worth of $6.2 billion. Kovner graduated from Harvard University with a B.A. in government in 1966. In 1977, he made his first trade in soybean futures contracts for $3,000, financed by a MasterCard loan. Kovner saw the contract go to $40,000 before watching it decline to $23,000 before selling. He then went on to work for Michael Marcus as a trader at Commodities Corporation (now a division of Goldman Sachs), where he is thought to have made millions.
In 1983, Bruce Kovner founded Caxton Associates, which at its peak managed more than $14 billion in funds. Andrew Lee, who is currently the CEO and chairman of Caxton Associates, took over the management of Bruce Kovner’s fund in 2008. In 2020, the company generated big profits through wagering on bonds, gold, and commodities and generated respectable gains. According to the Financial Times, its Macro Fund saw gains of 62% in 2020 and a return of 7.5% in 2021.
As of the second quarter of 2022, Caxton Associates had $26.68 billion in assets under management. Caxton Associates invests in the materials, information technology, industrials, healthcare, finance, and consumer discretionary sectors. The hedge fund initiated 317 new positions, made additional purchases in 98 stocks, sold out of 269, and reduced holdings in 90 stocks. Given that Caxton Associates invests across asset classes, the fund’s 13F portfolio, which only reflects stocks, doesn’t have many big positions, especially when it comes to blue chips.
Given that the Fed is expected to continue to increase interest rates, stocks could fall even further if economic data doesn’t meet estimates. Nevertheless some quality blue chips could be good opportunities for long term investors given current market valuations.
Bruce Kovner of Caxton Associates LP
Our Methodology:
For our list, we took 10 stocks from Bruce Kovner’s Caxton Associates 13F portfolio at the end of Q2 2022 that we think to have the right mixture of industry leadership, strong fundamentals, and growth potential. We then ranked them from #10 to #1 based on the stake value of the Caxton Associates 13F portfolio in those stocks in the second quarter. We also provided the number of hedge funds in our database that held shares in the stock at the end of Q2 2022.
10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
10. Johnson & Johnson (NYSE:JNJ)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.04 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.10%
Number of Hedge Funds: 83
Johnson & Johnson is a multinational pharmaceutical company that specializes in consumer packaged goods, pharmaceuticals, and medical devices. For Q2 2022, Bruce Kovner’s Caxton Associates added Johnson & Johnson to its portfolio and had a position worth $1.04 million making it 0.10% of the portfolio.
For the second quarter, Johnson & Johnson also reported $24.02 billion in revenue and an adjusted EPS of $2.59. Recently, the company guided for FY22 revenue growth of 6.5% to 7.5% and adjusted EPS of $10.65 to $10.75.
At the end of Q2 2022, 83 hedge funds in Insider Monkey’s database owned investments in Johnson & Johnson. These funds hold a collective value of over $6.76 billion. GQG Partners, with a position worth $1.16 billion, stood as the largest hedge fund of Johnson & Johnson.
Alongside Citigroup Inc. (NYSE:C), CME Group Inc. (NASDAQ:CME), and Pfizer Inc. (NYSE:PFE), Johnson & Johnson is one of billionaire Bruce Kovner’s Caxton Associates’ blue chip holdings at the end of Q2 2022.
9. The Bank of New York Mellon Corporation (NYSE:BK)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.07 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.10%
Number of Hedge Funds: 38
Based in New York, The Bank of New York Mellon Corporation (NYSE:BK) offers diversified financial services and has a presence in over 35 countries globally. In terms of Q2, Bruce Kovner’s Caxton Associates decreased its position in the stock by 12% to 25,787 shares worth $1.07 million.
Given its earnings power, The Bank of New York Mellon Corporation has a strong dividend history. The bank has consistently paid dividends for 11 years and for Q2 2022, the company declared a quarterly dividend of $0.37 per share.
Recently, Deutsche Bank analyst Brian Bedell also raised his price target on the stock to $46 from $42, citing some revised macro assumptions in his models. Bedell has a Hold rating on shares.
38 hedge funds in our database were bullish on The Bank of New York Mellon Corporation in the second quarter. Warren Buffet’s Berkshire Hathaway is the largest stakeholder in The Bank of New York Mellon Corporation as of Q2, with a $3.01 billion position in the company.
8. Walmart Inc. (NYSE:WMT)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.11 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.10%
Number of Hedge Funds: 67
Walmart Inc. (NYSE:WMT) is a multinational retail corporation that operates networks of supermarkets, grocery stores, and department stores. With its headquarters in Bentonville, Arkansas, the company operates more than 10,500 shops and clubs across 24 nations.
During Q2 2022, Caxton Associates LP boosted its stake in the company by 77%, purchasing additional nearly 9,165 shares. The fund’s total stake in the company amounted to roughly $1.11 million, which represented 0.1% of its 13F portfolio. As a result, Walmart Inc. is ranked#8 in our list of 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
Given its earnings power and past earnings per share growth, Walmart Inc. has raised its dividend for 49 consecutive years. As a result, it pays a quarterly dividend of $0.56 per share.
As of the end of quarter two 2022, 67 hedge funds tracked by Insider Monkey reported owning stakes in Walmart Inc.. These stakes had a consolidated value of nearly $3.78 billion. Rajiv Jain’s GQG Partners is the largest stakeholder in Walmart Inc. as of Q2, with a $1.19 billion position in the company.
7. Bank of America Corporation (NYSE:BAC)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.12 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.10%
Number of Hedge Funds: 99
Bank of America Corporation (NYSE:BAC) provides diversified banking and financial products and services. During Q2 2022, Caxton Associates LP had a position worth $1.12 million that made up 0.10% of the fund’s 13F portfolio.
Given its scale, Bank of America Corporation is a blue chip in the banking sector that has seen its earnings increase in recent years.
ClearBridge Investments, an investment management firm, mentioned Bank of America Corporation in its second quarter 2022 investor letter. Here’s what the firm said:
In the second quarter we made a sizable add to our position in Bank of America as our bank holdings have significant leverage to rising interest rates. The Fed, unfortunately, was late to realize inflation’s magnitude, maintaining for far too long that inflationary pressures were merely transitory. This mistake caused inflation to accelerate, necessitating a larger intervention than if the Fed had moved sooner.
As of the end of Q2 2022, 99 of the hedge funds tracked by Insider Monkey owned stakes in Bank of America Corporation. Those stakes held a collective value of over $35.90 billion. Warren Buffett’s Berkshire Hathaway held a notable stake in the company, with 1.01 billion shares worth $31.44 billion.
6. The Walt Disney Company (NYSE:DIS)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.41 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.13%
Number of Hedge Funds: 109
Walt Disney Company (NYSE:DIS) is an entertainment company that operates globally in Media and Entertainment Distribution, and Parks, Experiences, and Products segments.
As of the end of Q2 2022, Bruce Kovner’s Caxton Associates LP owned 15,017 shares worth $1.41 million of Walt Disney Company, accounting for 0.13% of its 13F portfolio. The company is ranked#6 in our list of 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
Recently, Disney trended when Bloomberg reported that CEO Bob Chapek is weighing merging Hulu and Disney+. If that happens, Disney could become even bigger in streaming.
According to Insider Monkey’s Q2 data, 109 hedge funds held investments in the company. These investments amounted to over $3.19 billion. Among these hedge funds, Ken Griffin’s Citadel Investment Group was the most prominent stakeholder having stakes worth $618.32 million.
Like Walt Disney Company, Citigroup Inc., CME Group Inc., and Pfizer Inc. are blue chip holdings in billionaire Bruce Kovner’s Caxton Associates’ 13F portfolio at the end of Q2 2022.
5. Cisco Systems, Inc. (NASDAQ:CSCO)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.53 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.14%
Number of Hedge Funds: 63
Cisco Systems, Inc. (NASDAQ:CSCO) is a global telecommunications corporation that creates and markets networking gear, software, and other products. During Q2 2022, Caxton Associates LP boosted its stake in the company by 288%, purchasing nearly 35,986 shares. The fund’s total stake in the company amounted to roughly $1.53 million, which represented 0.14% of its 13F portfolio. As a result, Cisco Systems, Inc. is ranked #5 in our list of 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
For Q2 2022, Cisco Systems, Inc. reported revenue of $13.01 billion and an adjusted EPS of $0.83 and in August 2022, the company declared a quarterly dividend of $0.38 per share.
Analysts like the stock. In August, Jackson Chiang, an analyst with KGI Securities, raised Cisco Systems, Inc. from Neutral to Outperform with a $53 price target.
Many hedge funds like the stock too. Out of the 895 funds in our database, 63 owned the stock at the end of Q2. Among them, Citadel Investment Group is a leading shareholder in Cisco Systems, Inc. with over 7.8 million shares worth $334.29 million.
4. AT&T Inc. (NYSE:T)
Stake Value in Caxton Associates LP’S 13F Portfolio: $1.55 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.15%
Number of Hedge Funds: 55
AT&T Inc. is a multinational telecommunications company with scale. Although shares are near multi-year lows and the company cut its dividend this year, AT&T Inc. is investing in the infrastructure of its business that could generate higher returns. If the company is successful with its transition, AT&T Inc. could potentially grow earnings.
In the fourth quarter of 2013, Caxton Associates made its initial investment in AT&T Inc., purchasing shares worth roughly $1.5 million. As of Q2 2022, the hedge fund held shares worth more than $1.5 million in the company, an 11% rise from the prior quarter. The company is ranked#4 in our list of 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
At the end of Q2 2022, 55 hedge funds in our database also held shares. Among them, Citadel Investment Group is a leading hedge fun dholder in AT&T Inc. with shares worth $255.76 million.
3. Citigroup Inc. (NYSE:C)
Stake Value in Caxton Associates LP’S 13F Portfolio: $2.09 million
Percentage of Caxton Associates LP’S 13F Portfolio: 0.20%
Number of Hedge Funds: 82
Based in New York, Citigroup Inc. offers diverse banking, financial services, and wealth management. During Q2 2022, Caxton Associates LP increased its stake in the bank by 52% to roughly $2.09 million, which represented 0.20% of its 13F portfolio. As a result, Citigroup Inc. is ranked#3 in our list of 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
For Q2 2022, the company reported $19.64 billion in revenue and an adjusted EPS of $2.30, beating estimates by $1.28 billion and $0.63. Although Citigroup Inc.’s valuation could decline if the market declines further, the stock is nevertheless considered as a blue chip given its scale and earnings power.
82 hedge funds tracked by Insider Monkey reported having bullish bets on Citigroup Inc. as of the end of the second quarter of 2022, with an aggregate stake value of $7.44 billion. Berkshire Hathaway, with a position worth $2.53 billion, was one of the largest hedge fund holders of Citigroup Inc..
2. CME Group Inc. (NASDAQ:CME)
Stake Value in Caxton Associates LP’S 13F Portfolio: $12.82 million
Percentage of Caxton Associates LP’S 13F Portfolio: 1.19%
Number of Hedge Funds: 56
CME Group Inc. is the biggest financial derivatives exchange in the world. As of the end of Q2 2022, Caxton Associates owned $12.82 million worth of shares, accounting for 1.19% of the fund’s 13F portfolio. As a result, CME Group Inc. is ranked #2 in our list of 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
Earlier in the month, analyst Gautam Sawant of Credit Suisse maintained a Neutral rating on the shares of CME Group Inc. while lowering the firm’s price target from $216 to $210. Recently, the company also announced the launch of options on ether futures.
As per Insider Monkey’s Q2 2022 database, 56 hedge funds owned stakes in CME Group Inc.. These stakes accounted for a consolidated value of over $2.74 billion. With a position worth over $858.72 million, GuardCap Asset Management held the largest position in the company in Q2.
1. Pfizer Inc. (NYSE:PFE)
Stake Value in Caxton Associates LP’S 13F Portfolio: $151.38 million
Percentage of Caxton Associates LP’S 13F Portfolio: 14.7%
Number of Hedge Funds: 70
Pfizer Inc. is a multinational pharmaceutical company that has been one of the leaders in terms of making vaccines for COVID-19. During Q2 2022, Caxton Associates LP decreased its stake in the company by 1% to $151.38 million, which represented 14.7% of its 13F portfolio. Despite the decrease, Pfizer Inc. is ranked#1 in our list of 5 and 10 Blue Chip Stocks to Buy According to Billionaire Bruce Kovner’s Caxton Associates.
Recently Pfizer and BioNTech received a positive CHMP opinion for their bivalent COVID-19 vaccine, which could increase demand if approved.
As per Insider Monkey’s Q2 2022 database, 70 hedge funds owned stakes in Pfizer Inc.. These stakes held a consolidated value of over $2.80 billion. With a position worth $533.91 million, AQR Capital Management was the largest hedge fund holder in the company in Q2.
You can also take a look at 10 Best Stocks to Buy Now According to Billionaire Bill Gates and Billionaire Dan Loeb’s Top 10 Stock Picks.
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This article is originally published at Insider Monkey.
