In this article, we discuss the 10 stocks to buy according to Ian Simm’s Impax Management portfolio based on Q3 holdings of the fund.
Ian Simm is the founder and chief of Impax Management. He formerly worked at McKinsey & Company as an engagement manager, helping clients on environmental strategy. From 2013 to 2018, he served on the Natural Environment Research Council (NERC) board, the United Kingdom’s principal funding organization for ecological science. Simm is also a member of the Net Zero Innovation Board, managing public sector funding for energy innovation programs in the United Kingdom.
Impax Management invests in five types of funds and accounts: actively managed long-only equity, fixed income, systematic equities, multi-asset, and new energy infrastructure. In its 13F filing for the third quarter of 2021, Impax Management disclosed $24.35 billion in long stock positions, with a top 10 holdings concentration of 26.24%.
As of the third quarter of 2021, Impax Management has stakes in several big companies like Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), and Visa Inc. (NYSE:V).
Ian Simm is bullish on the tech giant Microsoft Corporation (NASDAQ:MSFT). He increased his stake in the company by 42% in the third quarter, ending the period with 2.53 million shares of the company, worth $711.92 million. In November, Wells Fargo analyst Michael Turrin initiated coverage of Microsoft with an “Overweight” rating and gave a price target of $400.
According to his hedge fund’s disclosed holdings data, Ian Simm’s Impax Management is also bullish on Mastercard Incorporated (NYSE:MA). The fund increased its holding in Mastercard by 22% in the third quarter, with 893,052 shares of the company. In November, UBS analyst Rayna Kumar initiated coverage of MasterCard with a “Buy” rating and a $448 price target.
Impax Management also owns 1.13 million shares in Visa Inc. (NYSE:V) after raising its stake in the company by 20%. On November 17, UBS analyst Rayna Kumar initiated coverage of Visa with a “Buy” rating and gave a price target of $275.
With this background in mind, let’s start our list of 10 stocks to buy according to Ian Simm’s Impax Management portfolio. We used Simm’s 13F portfolio for Q3 2021 for this analysis.
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Stocks to Buy According to Ian Simm’s Impax Management
10. Equinix, Inc. (REIT) (NASDAQ:EQIX)
Impax Management Stake Value: $503,299,000
Percentage of Impax Management’s 13F Portfolio: 2.06%
Number of Hedge Fund Holders: 31
Equinix, Inc. (NASDAQ:EQIX) is a provider of digital infrastructure. It connects industry-leading finance, manufacturing, mobility, transportation, government, healthcare, and education in a cloud-first world. In November, DISH Network Corporation (NASDAQ:DISH) announced that Equinix would supply digital infrastructure services to enable its cloud-native, open RAN-based 5G network in the United States.
In November, RBC Capital analyst Jonathan Atkin trimmed his price target on Equinix, Inc. (NASDAQ:EQIX) to $850 from $885 but kept an “Outperform” rating on the shares. In a research note, the analyst writes that while the company’s Q3 earnings were strong, his lower price estimate for Equinix reflects a more gradual increase in EBITDA margins.
Equinix, Inc. (NASDAQ:EQIX) saw a decrease in hedge fund sentiment recently. The number of long hedge fund positions declined to 31 in the third quarter of 2021 compared to 33 positions in the previous quarter.
Just like Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), and Visa Inc. (NYSE:V), Equinix, Inc. (NASDAQ:EQIX) is one of the stocks gaining the attention of Ian Simm’s Impax Management.
In its second-quarter 2021 investor letter, Baron Funds mentioned Equinix, Inc. (NASDAQ:EQIX). Here is what the fund said:
“The shares of Equinix, Inc. gained 18% in the most recent quarter. Equinix is the premier global data center company in the world. We believe the company is exceptionally well positioned to continue to benefit from powerful secular demand trends including strong growth in information technology outsourcing, increased cloud computing adoption, multi-year increases in mobile data traffic, global internet traffic, and the number of connected devices.”
9. Aptiv PLC (NYSE:APTV)
Impax Management Stake Value: $563,151,000
Percentage of Impax Management’s 13F Portfolio: 2.31%
Number of Hedge Fund Holders: 44
Aptiv PLC (NYSE:APTV) is an Irish auto components manufacturer with headquarters in Dublin. It creates and produces vehicle components for the worldwide automotive and commercial vehicle sectors, as well as providing electrical and electronic and active safety technology solutions. Shares of Aptiv PLC (NYSE:APTV) surged 34.87% in the past twelve months.
In November, Credit Suisse analyst Dan Levy raised his price target on Aptiv PLC (NYSE:APTV) to $200 from $185 and kept an “Outperform” rating on the shares. This month, the company announced that it issued 3.100% senior unsecured notes due 2051, whose principal amount is $1.5 billion.
In the third quarter of 2021, 44 hedge funds tracked by Insider Monkey held stakes in Aptiv PLC (NYSE:APTV) worth approximately $1.76 billion, up from 40 hedge funds in the preceding quarter with a total stake value of roughly $1.68 billion.
Oakmark Funds, an investment management firm, in its first-quarter 2021 investor letter, mentioned Aptiv PLC (NYSE:APTV). Here is what the fund said:
“Aptiv approached our estimates of intrinsic value and was, therefore, eliminated during the period. The company was longstanding investment of the Fund and produced successful outcomes. We continue to believe that Aptiv is a well-positioned auto supplier that is likely to continue outgrowing light vehicle production for the foreseeable future, but this dynamic is now more fully appreciated by the market.”
8. Xylem Inc. (NYSE:XYL)
Impax Management Stake Value: $618,853,000
Percentage of Impax Management’s 13F Portfolio: 2.54%
Number of Hedge Fund Holders: 22
Xylem Inc. (NYSE:XYL) is a prominent water technology firm in the United States that serves public utilities, residential, commercial, agricultural, and industrial clients. On November 22, Loop Capital analyst Scott Graham initiated coverage of Xylem Inc. (NYSE:XYL), rating the stock as “Hold” and gave a price target of $120.
On November 11, Xylem Inc. (NYSE:XYL) declared a quarterly dividend of $0.28 per share, in line with the previous. The company also reported third-quarter earnings per share of $0.63, beating analysts’ estimates by $0.03. The actual revenue for Xylem Inc. (NYSE:XYL) was $1.27 billion, missing the forecast by $20 million.
Ian Simm’s Impax Asset Management is the largest stakeholder in Xylem Inc. (NYSE:XYL), with 5.01 million shares valued at $618.85 million. Our database shows that 22 hedge funds held stakes in the company as of the third quarter of 2021 versus 23 funds in the previous quarter.
In its first-quarter 2021 investor letter, Nelson Capital Management mentioned Xylem Inc. (NYSE:XYL). Here is what the fund said:
“Xylem is one of the leading water technology companies in the world, with about half of its revenues derived from outside the U.S. Its portfolio spans a wide range of equipment and solutions for the water industry, including the transport, treatment, testing and efficient use of water for public utilities as well as industrial, commercial, and residential customers.”
7. Agilent Technologies, Inc. (NYSE:A)
Impax Management Stake Value: $629,525,000
Percentage of Impax Management’s 13F Portfolio: 2.58%
Number of Hedge Fund Holders: 46
In the communications, electronics, life sciences, and chemical analysis industries, Agilent Technologies, Inc. (NYSE:A) delivers essential bio-analytical and electronic measuring technologies. The firm issued a quarterly dividend of $0.21 per share in November, an increase of 8.2% over the previous payout of $0.194.
On November 23, SVB Leerink analyst Puneet Souda raised his price target on Agilent Technologies, Inc. (NYSE:A) to $175 from $170 and rated the stock as “Outperform” post its Q4 financial results. Agilent Technologies, Inc.’s (NYSE:A) fourth-quarter EPS came in at $1.21, beating the estimates by $0.03.
46 hedge funds in Insider Monkey’s database held stakes amounting to $3.14 billion in Agilent Technologies, Inc. (NYSE:A) in the third quarter of 2021. This is compared to 39 hedge funds in the previous quarter, with stakes worth $3.89 billion.
Pershing Square Holdings, Ltd., in its Q2 2021 investor letter, mentioned Agilent Technologies, Inc. (NYSE:A). Here is what the fund said:
“Our large commitment to UMG required that we raise cash from the sale of one of our other investments. In light of the high quality of companies in our portfolio, this was a difficult decision to make. Ultimately, we chose to sell Agilent, as its current share price approached our conservative estimate of intrinsic value. If we did not need the capital, we would not have sold the stock.
Agilent has been a highly successful investment since our original purchase nearly two years ago, compounded by our additional investment in the company in the Covid market decline last year. Agilent’s stock price has increased 2.2 times since our initial purchase as a result of the company’s acceleration in revenue growth and profi tability.10 Agilent has been a critical supplier of technology and services to labs around the world fighting the Covid pandemic. The company’s management team led by Mike McMullen deserves enormous credit for the company’s success and for its important contribution to science and the fight against Covid for which we all should be extremely grateful.”
6. Trimble Inc. (NASDAQ:TRMB)
Impax Management Stake Value: $653,430,000
Percentage of Impax Management’s 13F Portfolio: 2.68%
Number of Hedge Fund Holders: 34
Trimble Inc. (NASDAQ:TRMB) is a software, hardware, and services technology corporation located in Sunnyvale, California. It works with a variety of global industries, including building and construction, agriculture, GIS, natural resources and utilities, governments, transportation, and more. In October, Piper Sandler analyst Weston Twigg initiated coverage of Trimble Inc. (NASDAQ:TRMB), rating the stock as “Overweight,” and gave a price target of $101.
Trimble Ventures, Trimble Inc.’s (NASDAQ:TRMB) corporate venture capital arm, announced an investment in Monarch Tractor in November. Monarch is an agricultural technology firm established in the United States.
In the second quarter, hedge fund managers increased their net holdings in Trimble Inc. (NASDAQ:TRMB). As of Q3 2021, 34 hedge funds have positions in the company, compared with 27 in the previous quarter.
Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA), and Visa Inc. (NYSE:V) are some of the stocks to buy according to Ian Simm’s Impax Management just like Trimble Inc. (NASDAQ:TRMB).
5. Pentair plc (NYSE:PNR)
Impax Management Stake Value: $658,873,000
Percentage of Impax Management’s 13F Portfolio: 2.7%
Number of Hedge Fund Holders: 24
Pentair plc (NYSE:PNR) is a water treatment corporation in the United States that is incorporated in Ireland and has tax residence in the United Kingdom. Impax Management holds 9.09 million shares in Pentair plc (NYSE:PNR) worth $658.87 million, representing 2.7% of their portfolio. The hedge fund has decreased its stake in the firm by 6% in the third quarter of 2021.
On November 22, Loop Capital analyst Scott Graham initiated coverage of Pentair plc (NYSE:PNR) with a “Buy” rating and gave a price target of $105. In October, Pentair plc (NYSE:PNR) reported earnings for the third quarter, posting earnings per share of $0.89, beating market estimates by $0.05. The revenue over the period was $969.2 million, exceeding the analysts’ expectations by $28.44 million.
4. IDEX Corporation (NYSE:IEX)
Impax Management Stake Value: $669,555,000
Percentage of Impax Management’s 13F Portfolio: 2.74%
Number of Hedge Fund Holders: 18
IDEX Corporation (NYSE:IEX) is a publicly listed corporation situated in Northbrook, Illinois, that develops, designs, and manufactures fluidics systems and specialized manufactured products. In November, IDEX Corporation (NYSE:IEX) announced a quarterly dividend of $0.54 per share, in line with the previous.
On November 22, Loop Capital analyst Scott Graham initiated coverage of IDEX Corporation (NYSE:IEX) with a “Hold” rating and gave a price target of $234. In the third quarter financial results, IDEX Corporation (NYSE:IEX) beat market predictions on earnings per share by $0.04. Revenue for the quarter was $712.09 million, up 22.5% year over year and $14.65 million ahead of market expectations.
IDEX Corporation (NYSE:IEX) was in 18 hedge funds’ portfolios in the third quarter of 2021. There were 22 hedge funds in our database with IEX holdings in the previous quarter. Impax Asset Management, managed by Ian Simm, is the company’s largest stakeholder, with a $669.56 million holding.
3. Ecolab Inc. (NYSE:ECL)
Impax Management Stake Value: $708,604,000
Percentage of Impax Management’s 13F Portfolio: 2.91%
Number of Hedge Fund Holders: 39
Ecolab Inc. (NYSE:ECL) provides products and services connected to water, hygiene, and energy. In October, Ecolab Inc. (NYSE:ECL) agreed to purchase Purolite, a global provider of high-end ion exchange resins for solution separation and purification.
After Ecolab Inc.’s (NYSE:ECL) Q3 earnings beat, BMO Capital analyst John McNulty boosted his price target to $246 from $223 in October but kept a “Market Perform” rating on the stock. Ecolab Inc.’s (NYSE:ECL) third-quarter EPS was $1.38, beating consensus EPS of $0.08. The revenue was $3.32 billion, beating consensus estimates of $60 million.
Bill & Melinda Gates Foundation Trust has the highest investment in Ecolab Inc. (NYSE:ECL), valued close to $910.924 million and accounting for 3.92% of its overall 13F portfolio, according to Insider Monkey. Impax Asset Management is the second most bullish fund manager, with a $708.60 million stake and 2.91% of its 13F portfolio invested in the company.
2. Linde plc (NYSE:LIN)
Impax Management Stake Value: $862,602,000
Percentage of Impax Management’s 13F Portfolio: 3.54%
Number of Hedge Fund Holders: 46
Shares of industrial gases producer and trader Linde plc (NYSE:LIN) rallied 2.16% over the past twelve months. In October, Linde plc (NYSE:LIN) declared a quarterly dividend of $1.06 per share, in line with the previous.
In November, UBS analyst Andrew Stott raised his price target on Linde plc (NYSE:LIN) to EUR 350 from EUR 325 and maintained a “Buy” rating on the shares. In October, Linde plc (NYSE:LIN) reported earnings for the third quarter, posting earnings per share of $2.73, beating market estimates by $0.07. The revenue over the period was $7.7 billion, exceeding the analysts’ expectations by $170 million.
As of Q3 2021, 46 hedge funds tracked by Insider Monkey have positions in Linde plc (NYSE:LIN) worth $4.77 billion, down from 55 hedge funds in the previous quarter worth $5.92 billion.
1. American Water Works Company, Inc. (NYSE:AWK)
Impax Management Stake Value: $941,416,000
Percentage of Impax Management’s 13F Portfolio: 3.86%
Number of Hedge Fund Holders: 28
American Water Works Company, Inc. (NYSE:AWK) and its subsidiaries provide water and wastewater services in the United States. In October, American Water Works Company, Inc. (NYSE:AWK) agreed to sell its Homeowner Services Group to Apax Partners for $1.275 billion.
In November, Goldman Sachs analyst Insoo Kim lowered American Water Works Company, Inc. (NYSE:AWK) from “Buy” to “Neutral” with a $177 price target, down from $191. According to Kim, American Water Works Company, Inc. (NYSE:AWK) sees management’s revised five-year growth plan falls short of expectations.
Among the hedge funds being tracked by Insider Monkey, Impax Asset Management held the most valuable stake in American Water Works Company, Inc. (NYSE:AWK), worth $941.42 million in the third quarter of 2021.
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Disclosure: None. 10 Stocks to Buy According to Ian Simm’s Impax Management is originally published on Insider Monkey.
