10 New Stock Picks of Bruce Kovner’s Caxton Associates

In this article, we discuss 10 new stock picks of Bruce Kovner’s Caxton Associates. If you want to see more new holdings of Caxton Associates, check out 5 New Stock Picks of Bruce Kovner’s Caxton Associates

American billionaire Bruce Kovner founded Caxton Associates in 1983. It is a New York-based global macro hedge fund with offices in New York, Sydney, Australia, Princeton, and New Jersey. Bruce Kovner handed over the management of his fund to Andrew Lee in 2008, who is presently the chief executive officer and chairman of Caxton Associates. Kovner initiated CAM Capital in 2012, a hedge fund where he manages his personal trades and business activities. 

In February 2022, Caxton Associates announced that it is raising fees and closing off one of its funds to outside investors as it gains from its investment calls amid rising inflation and soaring interest rates. In the last two years, the hedge fund’s assets have more than doubled to over $11 billion. Caxton Associates was a gainer in 2020, and that winning streak has continued into 2022 as well. It is a macro hedge fund that invests in assets that are impacted by economic and political events, such as bonds and currencies. Caxton announced in February that it is elevating the management fee for its flagship Global fund from 2% to 2.25%, and the performance fee will be raised from 22.5% to 25%. Similarly, in order to preserve attractive returns, new money will not be accepted in its Macro fund. 

As of the first quarter of 2022, Caxton Associates invests in the materials, information technology, industrials, healthcare, finance, and consumer discretionary sectors. Some of the most notable stocks in the Q1 portfolio of Caxton Associates include Tesla, Inc. (NASDAQ:TSLA), Pfizer Inc. (NYSE:PFE), and Microsoft Corporation (NASDAQ:MSFT). 

10 New Stock Picks of Bruce Kovner's Caxton Associates

Bruce Kovner of Caxton Associates LP

Our Methodology

We used the Q1 2022 portfolio of Bruce Kovner’s Caxton Associates for this analysis, selecting the 10 new holdings of the hedge fund. 

10. The Bank of New York Mellon Corporation (NYSE:BK)

Caxton Associates’ Stake Value: $1,451,000

Percentage of Caxton Associates’ 13F Portfolio: 0.11%

Number of Hedge Fund Holders: 54

The Bank of New York Mellon Corporation (NYSE:BK) is an American provider of financial products and services, operating through Securities Services, Market and Wealth Services, Investment and Wealth Management, and Other segments. UBS analyst Brennan Hawken on July 11 reiterated a Buy rating on The Bank of New York Mellon Corporation (NYSE:BK) and lowered the price target on the stock to $52 from $56. In Q1 2022, Caxton Associates purchased 29,227 shares of The Bank of New York Mellon Corporation (NYSE:BK), worth $1.45 million, representing 0.11% of the total 13F holdings. 

On July 15, The Bank of New York Mellon Corporation (NYSE:BK) declared a $0.37 per share quarterly dividend, an 8.8% increase from its prior dividend of $0.34. The dividend is payable on August 5, to shareholders of record on July 25. The Bank of New York Mellon Corporation (NYSE:BK) delivers a dividend yield of 3.19% as of July 15. The company’s Q2 GAAP EPS of $1.03 missed estimates by $0.09 and its revenue for the June quarter stood at $4.3 billion, above consensus by $130 million. Revenue for the period climbed 8.6% year over year. 

According to Insider Monkey’s data, 54 hedge funds were bullish on The Bank of New York Mellon Corporation (NYSE:BK), up from 49 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the leading position holder in the company, with 72.3 million shares worth about $3.6 billion. 

In addition to Tesla, Inc. (NASDAQ:TSLA), Pfizer Inc. (NYSE:PFE), and Microsoft Corporation (NASDAQ:MSFT), elite hedge funds are pouring into The Bank of New York Mellon Corporation (NYSE:BK). 

Here is what Ariel Investments has to say about The Bank of New York Mellon Corporation (NYSE:BK) in its Q4 2021 investor letter:

“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.

This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. Smaller positions in The Bank of New York Mellon Corporation (BK) also benefited from higher rates, principally with their ability to invest customer cash.”

9. The Procter & Gamble Company (NYSE:PG)

Caxton Associates’ Stake Value: $1,526,000

Percentage of Caxton Associates’ 13F Portfolio: 0.12%

Number of Hedge Fund Holders: 72

The Procter & Gamble Company (NYSE:PG) is an American multinational company that provides branded consumer packaged goods, operating through Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care segments. On June 21, Deutsche Bank analyst Steve Powers reaffirmed a Buy recommendation on The Procter & Gamble Company (NYSE:PG) but lowered the firm’s price target on the stock to $157 from $171 after Deutsche’s consumer conference in Paris. Caxton Associates added The Procter & Gamble Company (NYSE:PG) to its portfolio by buying 9,985 shares, worth $1.5 million, representing 0.12% of the total 13F holdings. 

2022 marks the 66th consecutive year that The Procter & Gamble Company (NYSE:PG) has increased its annual dividends. On July 12, the company declared a quarterly dividend of $0.9133 per share, in line with previous. The dividend is distributable on August 15, to shareholders of record on July 22. 

According to Insider Monkey’s data, 72 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG) at the end of Q1 2022, up from 67 funds in the earlier quarter. Rajiv Jain’s GQG Partners is the leading shareholder of the company, with about 10 million shares worth $1.5 billion. 

8. IAC/InterActiveCorp (NASDAQ:IAC)

Caxton Associates’ Stake Value: $1,533,000

Percentage of Caxton Associates’ 13F Portfolio: 0.12%

Number of Hedge Fund Holders: 48

IAC/InterActiveCorp (NASDAQ:IAC) is a New York-based media and internet company that produces entertainment, food, home, beauty, travel, health, family, luxury, lifestyle, and fashion content. Caxton Associates added IAC/InterActiveCorp (NASDAQ:IAC) to its portfolio in the first quarter of 2022 by purchasing 15,292 shares, worth $1.53 million. 

On June 14, Cowen analyst John Blackledge maintained an Outperform rating on IAC/InterActiveCorp (NASDAQ:IAC) and lowered the price target on the shares to $130 from $150. The analyst reiterated that IAC/InterActiveCorp (NASDAQ:IAC) remains his best mid-cap idea for 2022, as the company’s businesses trade at a prominent conglomerate discount. With macro headwinds resulting in multiple compression industry wide, he cut his sum-of-the-parts target.

Among the hedge funds tracked by Insider Monkey, 48 funds reported long positions in IAC/InterActiveCorp (NASDAQ:IAC) at the end of Q1 2022, up from 47 funds in the preceding quarter. Dennis Hong’s ShawSpring Partners held the biggest stake in the company, with 3.3 million shares worth $332.5 million. 

Here is what Longleaf Partners Fund has to say about IAC/InterActiveCorp (NASDAQ:IAC) in its Q1 2022 investor letter:

“IAC – The conglomerate discount on this digital holding company grew wider in the quarter amidst a period of broad uncertainty and continued technology stock declines. Unlike most of its tech peers, IAC began the year already uniquely discounted and today trades at less than half of our appraisal value and less than 10x estimated free FCF per share power. Underlying holding Angi (previously Angie’s List) reported a disappointing quarter. Angi represents only 25% of value but swings the market perception and stock price since it is also publicly traded. The market is not yet giving credit to the Dotdash Meredith deal creating a digital publishing leader, given the lack of near-term reporting clarity since the deal just closed and 2022 is a transition year. Additionally, IAC’s underlying holdings in carsharing company Turo and casino and online gaming company MGM remain not properly recognized by the market. CEO Joey Levin and Chairman Barry Diller have a history of creating value-accretive catalysts to close the price to value gap.”

7. Monster Beverage Corporation (NASDAQ:MNST)

Caxton Associates’ Stake Value: $1,548,000

Percentage of Caxton Associates’ 13F Portfolio: 0.12%

Number of Hedge Fund Holders: 48

Monster Beverage Corporation (NASDAQ:MNST) is a California-based company that manufactures and markets energy drink beverages in the United States and internationally. Monster Beverage Corporation (NASDAQ:MNST) is a new arrival in Caxton Associates’ Q1 2022 portfolio, with the hedge fund buying 19,371 shares worth $1.54 million. 

On July 5, Roth Capital analyst Sean McGowan initiated coverage of Monster Beverage Corporation (NASDAQ:MNST) with a Neutral rating and a $100 price target. The company holds approximately 34% of the US market share for energy drinks and is the world’s largest energy drink manufacturer, behind only Red Bull, noted the analyst. Though Monster Beverage Corporation (NASDAQ:MNST) has been “a stellar performer over the past 20 years”, he thinks the stock’s valuation is fair in light of the company’s growth prospects, the analyst told investors.

According to Insider Monkey’s database, 48 hedge funds were bullish on Monster Beverage Corporation (NASDAQ:MNST) at the end of March 2022, up from 47 funds in the earlier quarter. Jim Simons’ Renaissance Technologies held the largest stake in the company, comprising more than 7 million shares worth $561.5 million. 

6. AT&T Inc. (NYSE:T)

Caxton Associates’ Stake Value: $1,585,000

Percentage of Caxton Associates’ 13F Portfolio: 0.12%

Number of Hedge Fund Holders: 74

AT&T Inc. (NYSE:T) is an American telecommunications, media, and technology company. On June 28, AT&T Inc. (NYSE:T) declared a $0.2775 per share quarterly dividend, in line with previous. The dividend is payable on August 1, to shareholders of record on July 11. The company delivers a dividend yield of 5.40% as of July 15. Bruce Kovner’s Caxton Associates added AT&T Inc. (NYSE:T) to its Q1 portfolio by acquiring 67,079 shares worth $1.58 million, representing 0.12% of the total 13F holdings. 

Scotiabank analyst Maher Yaghi on June 28 assumed coverage of AT&T Inc. (NYSE:T) with a Sector Perform rating and a $22.50 price target. The analyst expects low single digit growth in Canada in 2022 and 2023, but said companies with greater wireless exposure should perform better. He is bullish on the Canadian wireless market and he also sees attractive prospects for U.S. stocks in terms of pricing, even in wireless, “potentially offering growth after many years of being under pressure”.

According to Insider Monkey’s data, 74 hedge funds were bullish on AT&T Inc. (NYSE:T) at the end of Q1 2022, up from 70 funds in the preceding quarter. Arrowstreet Capital held the biggest position in the company, with 28.7 million shares worth $678.5 million. 

Like Tesla, Inc. (NASDAQ:TSLA), Pfizer Inc. (NYSE:PFE), and Microsoft Corporation (NASDAQ:MSFT), smart investors are piling into AT&T Inc. (NYSE:T). 

Here is what Weitz Investment Management Hickory Fund has to say about AT&T Inc. (NYSE:T) in its Q4 2021 investor letter:

“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”

 

 

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Disclosure: None. 10 New Stock Picks of Bruce Kovner’s Caxton Associates is originally published on Insider Monkey.