In this article, we discuss the 10 important stocks in billionaire Richard Chilton’s latest portfolio.
Richard Chilton founded his hedge fund, Chilton Investment Company, in 1992. The hedge fund aims to provide definite returns to its clients by preserving cash during market volatility. A varied group of investors can benefit from the hedge fund’s customized investing options and methods. Chilton Investment’s Flagship Strategy Fund has produced strong returns throughout the years, with gains of 18.57% in 2013 and 13.99% in 2015. In 2016, the hedge fund recorded a loss of 13.66% but managed to recover in 2017 and posted a return of 12.18%.
Richard Chilton’s investment approach can be defined as value-oriented and responsive to market trends. The billionaire invests in low-volatility stocks by implementing a bottom-up approach. Such stocks allow him to take advantage of steady growth supported by dividends.
Chilton Investment Company’s 13F portfolio was worth over 4.1 billion as of Q1 2022, down from $4.7 billion in the preceding quarter. The hedge fund made significant investments in the services sector, as well as healthcare and consumer goods during the first quarter. Some of the popular holdings of Chilton Investment Company include Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG).
Chilton Investment Company increased its holding in Alphabet Inc. (NASDAQ:GOOG) by 1344%, from 2,269 shares to 32,749 shares during the first quarter of 2022. The hedge fund first initiated a position in Alphabet Inc. (NASDAQ:GOOG) in Q4 2015, and the total investment currently represents 2.18% of the Q1 portfolio.
The hedge fund’s investment in Apple Inc. (NASDAQ:AAPL) is worth over $7.9 million, representing 0.19% of the overall portfolio. Following Apple Inc.’s (NASDAQ:AAPL) announcement regarding the release of MacBook laptops with M2 chips, the company is expected to capture PC market share and provide tough competition to Microsoft Corporation (NASDAQ:MSFT). Chilton Investment Company increased its investment in Apple Inc. (NASDAQ:AAPL) by 13% in Q1 2022.
Richard Chilton of Chilton Investment Company
Our Methodology
The stocks have been picked from the Q1 2022 portfolio of Chilton Investment Company. We have discussed the analyst ratings, earnings reports, and business fundamentals for each stock. Insider Monkey has a database of 912 elite funds, which was used to gauge the hedge fund sentiment concerning each stock at the end of Q1 2022.
Important Stocks in Billionaire Richard Chilton’s Latest Portfolio
10. Broadcom Inc. (NYSE:AVGO)
Chilton Investment Company’s Stake Value: $483,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 71
Broadcom Inc. (NYSE:AVGO) is one of the leading tech companies in the world specializing in the production of software solutions. The company’s products cater to key markets such as data centers, broadband, and industrial software infrastructure. Chilton Investment Company had first taken a position in the company in Q2 2020.
On May 27, John Vinh at KeyBanc raised his price target on Broadcom Inc. (NYSE:AVGO) from $720 to $780 and reiterated a Buy rating on the stock. The upgrade follows Broadcom Inc.’s (NYSE:AVGO) decision to acquire VMware for an enterprise value of $61 billion. The acquisition is expected to provide an upside potential of 45% to the stock.
Here’s what ClearBridge Investments said about Broadcom Inc. (NYSE:AVGO) in its Q4 2021 investor letter:
“However, ClearBridge portfolio companies are responding by supporting their workforces and showing resilience in adapting and thriving. Semiconductor companies ClearBridge owns and engages with have been successful in advancing vaccinations in their global supply chains. In Malaysia, for example, Broadcom has taken part in PIKAS, a public-private partnership vaccination program focusing on the workforce in critical manufacturing sectors. By the summer of 2021 Broadcom was able to get over 90% of workers in its Penang factory at least one dose of vaccine, and roughly 73% fully vaccinated. Companies in the program also pay the administration cost for vaccinations including cases where the employee is no longer employed by the company before full immunization of the employee.”
As of Q1 2022, Broadcom Inc. (NYSE:AVGO) was held by 71 hedge funds.
9. Mettler-Toledo International Inc. (NYSE:MTD)
Chilton Investment Company’s Stake Value: $167,384,000
Percentage of Chilton Investment Company’s 13F Portfolio: 4.02%
Number of Hedge Fund Holders: 36
Mettler-Toledo International Inc. (NYSE:MTD) is a multinational firm that specializes in the production of precision and analytical instruments. It is the world’s largest manufacturer of weighing devices for industrial, scientific, and food retailing purposes. Mettler-Toledo International Inc. (NYSE:MTD) makes use of integrative technology to provide customers with application-specific solutions.
Mettler-Toledo International Inc. (NYSE:MTD) revealed that forecasting was proving to be a challenge for the company due to the uncertain macro-economic environment and dynamic market conditions. Today’s economic situation is more unpredictable than ever, with concerns about COVID-19 lockdowns, global supply chain issues, inflation, and the Russia-Ukraine conflict.
Based on its current evaluation of market conditions, Mettler-Toledo International Inc. (NYSE:MTD) has guided local currency sales to grow by 8% in 2022. Meanwhile, adjusted EPS is expected to be between $38.20 to $38.50, representing a growth rate of 12% to 13%. However, inflationary pressures could hamper the company’s position to offset the impact of the headwinds through pricing and result in the stock’s multiple compressing.
Mettler-Toledo International Inc. (NYSE:MTD) was mentioned in the Q1 2022 investor of Baron Funds. Here’s what the firm said:
“Mettler-Toledo International, Inc. (NYSE:MTD) is a leading provider of precision instruments and services for life sciences, food, and chemicals companies, among others. Similar to IDEXX, we believe that Mettler’s shares fell chiefly because of widespread investor rotation out of growth stocks. In addition, there were concerns about the potential negative impact of foreign currency fluctuation and the possibility of a European economic slowdown, where Mettler has significant business. We continue to believe Mettler is an exceptionally well-managed business with competitive advantages and attractive long-term growth prospects.”
As of Q1 2022, 36 hedge funds held a stake in Mettler-Toledo International Inc. (NYSE:MTD).
8. Mastercard Incorporated (NYSE:MA)
Chilton Investment Company’s Stake Value: $145,022,000
Percentage of Chilton Investment Company’s 13F Portfolio: 3.48%
Number of Hedge Fund Holders: 136
Mastercard Incorporated (NYSE:MA) is a Missouri, America-based financial services company. It facilitates the processing of transactions and provides other payment-related services. Mastercard Incorporated (NYSE:MA) leverages technology to meet the changing needs of financial institutions and clients. The billionaire’s current investment in the company is valued at over $145 million.
Payment companies like Mastercard Incorporated (NYSE:MA) rely heavily on corporate activity and the level of consumer spending. Shareholders are concerned that the persistence of high inflation levels would result in the Fed continuing with its harsh monetary policy, which could lead to a recession and lower the spending levels.
However, analysts remain bullish on the stock’s long-term potential. Mastercard Incorporated (NYSE:MA) posted strong Q1 2022 results, with earnings and revenue surpassing the consensus estimates.
Mastercard Incorporated (NYSE:MA) was mentioned in the Q1 2022 investor letter of Polen Capital. Here’s what the investment management firm said:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
As of Q1 2022, 136 hedge funds held a stake in Mastercard Incorporated (NYSE:MA) as of Q1 2022, down from 144 in the preceding quarter.
7. Thermo Fisher Scientific Inc. (NYSE:TMO)
Chilton Investment Company’s Stake Value: $98,149,000
Percentage of Chilton Investment Company’s 13F Portfolio: 2.35%
Number of Hedge Fund Holders: 101
Thermo Fisher Scientific Inc. (NYSE:TMO) is a Massachusetts, America-based firm specializing in the production of technology-driven scientific instruments, laboratory equipment, and pharmaceutical services. The company generates over $40 billion in annual sales and is a driving force in the research, healthcare, industrial, and applied markets.
On April 25, Timothy Daley at Wells Fargo downgraded Thermo Fisher Scientific (NYSE:TMO) from Equal-Weight to Underweight. Moreover, the analyst decreased the price target on Thermo Fisher Scientific Inc. (NYSE:TMO) from $605 to $525, citing an expensive valuation and major headwinds for the stock ahead. Thermo Fisher Scientific Inc. (NYSE:TMO) stock is down 22% YTD as of June 17.
Here’s what ClearBridge Investments said about Thermo Fisher Scientific Inc. (NYSE:TMO) 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 Thermo Fisher Scientific, a leading health care tools company, a leading provider of fertility benefit management services to self-insured employers that offers a rare win-win-win for employers, employees, health systems, and doctors, with clear savings and quality improvements.”
As of Q1 2022, 101 hedge funds held a stake in Thermo Fisher Scientific Inc. (NYSE:TMO).
6. Comcast Corporation (NASDAQ:CMCSA)
Chilton Investment Company’s Stake Value: $617,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 78
Comcast Corporation (NASDAQ:CMCSA) is a Pennsylvania-based telecommunications company. The multinational conglomerate provides cloud-based connectivity solutions for small and large corporations.
On June 6, Comcast Corporation (NASDAQ:CMCSA) was downgraded from Outperform to Peer Perform by Peter Supino at Wolfe Research. The analyst also lowered the price target on the stock from $63 to $50. Supino shared that he thinks a greater risk is attached to the 2023 forecasts for advertising and broadband. The analyst expects the gains in Cable EBITDA margin to decline because of intense competition.
Comcast Corporation (NASDAQ:CMCSA) was discussed in the Q4 2021 investor letter of ClearBridge Investments. Here’s what the firm said about the company:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
Comcast Corporation (NASDAQ:CMCSA) was held by 78 hedge funds as of Q1 2022.
Some of the popular companies Richard Chilton has a stake in as of Q1 2022 include Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG).
5. CDW Corporation (NASDAQ:CDW)
Chilton Investment Company’s Stake Value: $266,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0%
Number of Hedge Fund Holders: 41
CDW Corporation (NASDAQ:CDW) is a Lincolnshire, Illinois-based firm that provides tech solutions to government institutions, enterprises, healthcare, and the education sector. The billionaire currently holds 1487 shares in the company at an average quarterly share price of $182.98.
In Q1 2022, CDW Corporation (NASDAQ:CDW) posted an EPS Normalized Actual of $2.20, beating the analysts’ estimates by $0.18. Moreover, the company surpassed the revenue estimates by $277.74 million.
There was a considerable increase in short interest in CDW Corporation (NASDAQ:CDW) during May. As of May 31, the short interest added up to 1,470,000 shares, reflecting an increase of 40% from the number of shares short on May 15.
CDW Corporation (NASDAQ:CDW) was mentioned in the Q1 2022 investor letter of Polen Capital. Here’s what the firm said:
“We sold CDW from the Portfolio to make room for companies we believed offer more attractive risk/reward profiles. CDW is a high-quality company that continues to execute well. It has exceeded the pace of U.S. information technology spending, gained market share globally, and further penetrated the higher-end services that its customers need. That said, the company is at the upper end of our market-cap range, and we believe it no longer offers the compelling return potential we look for, given its lower-growth profile, vulnerability to supply chain issues, tight margins, and premium multiple to peers.”
Of the 912 hedge funds in Insider Monkey’s database, 41 funds held a stake in CDW Corporation (NASDAQ:CDW) as of Q1 2022.
4. Visa Inc. (NYSE:V)
Chilton Investment Company’s Stake Value: $7,882,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0.18%
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is one of the leading digital payments technology companies in the world. The firm’s portfolio of financial services, such as mobile payments, allows consumers, retailers, financial institutions, and government bodies to transact conveniently.
On April 29, Chris Donat at Piper Sandler downgraded Visa Inc. (NYSE:V) from Overweight to Neutral. Moreover, the analyst lowered the price target on Visa Inc. (NYSE:V) from $283 to $239. The analyst expressed his concern over a possible recession in Europe in 2023, which would result in declining payments activity and lower revenue for Visa Inc. (NYSE:V). He credited the uncertain macro-environment as the primary reason for the downgrade.
Here’s what Polen Capital said about Visa Inc. (NYSE:V) in its Q1 2022 investor letter:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
At the end of Q1 2022, 159 hedge funds held a position in Visa Inc. (NYSE:V).
3. Honeywell International Inc. (NASDAQ:HON)
Chilton Investment Company’s Stake Value: $328,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0%
Number of Hedge Fund Holders: 50
Honeywell International Inc. (NASDAQ:HON) is a Charlotte, North Carolina-based technology company involved in the production of aerospace products and services. Chilton Investment Company currently has a stake worth $328,000 in Honeywell International Inc. (NASDAQ:HON).
On May 2, Joseph O’Dea at Wells Fargo reiterated an Equal Weight rating on Honeywell International Inc. (NASDAQ:HON) stock. The analyst raised the price target from $196 to $203, citing decent quarterly results. Honeywell International Inc. (NASDAQ:HON) posted revenue of $8.38 billion for Q1 2022, surpassing the consensus estimates by $86.41 million. However, the company recorded an EPS GAAP Actual of $1.64, missing the analysts’ estimates by $0.23.
As of Q1 2022, 50 hedge funds held a stake in Honeywell International Inc. (NASDAQ:HON), down from 51 in the preceding quarter.
2. Lockheed Martin Corporation (NYSE:LMT)
Chilton Investment Company’s Stake Value: $2,504,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 56
Lockheed Martin Corporation (NYSE:LMT) is an American information security and advanced-technology firm with over 114,000 employees globally.
In Q1 2022, Lockheed Martin Corporation (NYSE:LMT) posted an EPS Normalized Actual of $6.44, beating the consensus estimate by $0.26. However, the company missed the revenue estimates by $529.16 million.
Lockheed Martin Corporation (NYSE:LMT) has secured a contract valued at $578 million involving the F-35 Jet Program. The company would provide management and integration support to the program, which is expected to be completed by 2030.
Lockheed Martin Corporation (NYSE:LMT) was mentioned in the Q3 2021 investor letter of Ariel Investments. Here’s what the firm said:
“Conversely, leading global defense contractor Lockheed Martin Corporation (LMT) was the greatest detractor over the trailing one-year period due to pared back F-35 delivery plans and weaker than expected 2022 sales guidance. Nonetheless, we remain confident in LMT’s positioning as they continue to secure a steady stream of lucrative contracts and benefit from a sizeable backlog. Looking ahead, management is focused on driving innovation, underscored by the pending acquisition of Aerojet Rocketdyne enabling vertical integration in propulsion systems for space and missile defense. At today’s valuation, LMT is currently trading at a 32% discount to our estimate of private market value.”
Lockheed Martin Corporation (NYSE:LMT) was held by 56 hedge funds as of Q1 2022.
1. JPMorgan Chase & Co. (NYSE:JPM)
Chilton Investment Company’s Stake Value: $1,715,000
Percentage of Chilton Investment Company’s 13F Portfolio: 0.04%
Number of Hedge Fund Holders: 110
JPMorgan Chase & Co. (NYSE:JPM) is a global financial services firm providing services to the world’s most renowned enterprises and institutions. The company is one of the leading technology-driven corporations in the world, with an annual investment of $12 billion in technological solutions.
On May 24, James Fotheringham at BMO Capital increased the price target on JPMorgan Chase & Co. (NYSE:JPM) from $150 to $156. However, the analyst maintained a Market Perform rating on JPMorgan Chase & Co. (NYSE:JPM). According to Fotheringham, JPMorgan Chase & Co. (NYSE:JPM) could possibly gain a greater market share in the long-term, but the short-term benefit of increased net interest income is expected to be offset by several headwinds.
Here’s what Ariel Investments said about JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter:
“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.
“In our view, inflation will not just be a 2021 phenomenon.”
Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”
As of Q1 2022, 110 hedge funds held a stake in JPMorgan Chase & Co. (NYSE:JPM).
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Disclose. None. 10 Important Stocks in Billionaire Richard Chilton’s Latest Portfolio is originally published on Insider Monkey.
