In this article, we are going to take a look at the 10 stocks to buy now according to billionaire Howard Marks.
An admired icon in the investor community, Howard Marks is an American billionaire who is the co-chairman and co-organizer at Oaktree Capital Management. Having started his career at Citicorp’s in 1969, Howard Marks rose through the ranks to become Vice President, before joining TCW Group in 1985 as their fund manager. Ultimately, Mr. Marks founded Oaktree Capital Management with several TCW colleagues in 1995.
Based in Los Angeles, Oaktree is the biggest financier of distressed securities worldwide. Investing primarily in corporate debt, distressed debt, and convertible bonds, Oaktree Capital Management has continuously posted excellent returns for its investors, which are mainly pension funds and sovereign funds. The fund went public through an IPO in 2012 and is currently trading as Oaktree Capital Group LLC (NYSE-OAK-A) (NYSE:OAK-B).
At the same time, Oaktree is reporting quarterly 13F filings with the Securities and Exchange Commission. As of the end of the second quarter of 2021, the fund’s 13F portfolio is valued at approximately $7.45 billion.
Among Howard Marks’ and Oaktree’s highest positions are companies like PG&E Corporation (NYSE: PCG), Vistra Corporation (NYSE: VST), and Chesapeake Energy Corporation (NASDAQ: CHK).
Howard Marks of Oaktree Capital Management
But why should you pay attention to what billionaire investors are buying and selling? The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices.
On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market.
We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a useful indicator that investors should pay special attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context and industry outlook in mind, we picked the top 10 stock picks of American billionaire Howard Marks, according to Oaktree’s latest 13F filing. In addition, we are going to take a look at the overall hedge fund sentiment towards the companies that Howard Marks is bullish on.
10 Best Stocks to Buy Now According to Billionaire Howard Marks
10. Cemex S.A.B. de C.V. (NYSE:CX)
Holding Value: $200.54 million
Percentage of 13F portfolio: 2.69%
Total Number of Hedge Fund Holders: 23
Cemex S.A.B. de C.V. (NYSE:CX) kicks off our list of best stocks to buy now according to billionaire Howard Marks. The Mexico-based company deals in the provision of cement, ready-mix concrete, and other related products through its geographical segments around the globe. According to its latest 13F, Oaktree Capital Management holds 23.87 million shares of Cemex S.A.B de C.V (NYSE:CX) worth $200.54 million.
On 11th October, research firm Berenberg maintained its ‘Buy’ rating on Cemex S.A.B. de C.V. (NYSE:CX) stock, setting a price target of $10.5.
In the second quarter of 2021, Cemex S.A.B. de C.V. (NYSE: CX) posted EPS of $0.06, missing estimates by $0.11. The company’s revenue for stood at $3.86 billion, beating analysts’ forecasts by $263.99 million.
As of the end of June, 23 hedge funds out of the 873 tracked by Insider Monkey held stakes in Cemex S.A.B. de C.V. (NYSE: CX) worth $601.77 million in aggregate, compared to 24 hedge funds holding $471.44 million worth of positions in the company in the previous quarter.
9. SunOpta Inc. (NASDAQ:STKL)
Holding Value: $218.87 million
Percentage of 13F portfolio: 2.93%
Number of Hedge Fund Holders: 26
Then there’s SunOpta Inc. (NASDAQ:STKL), in which Oaktree holds a $218.87 million stake containing 20.73 million shares. SunOpta sells food and beverage products to retail customers, food manufacturers, and branded food companies around the world through its two segments: Plant-Based Foods and Beverages, and Fruit-Based Foods and Beverages.
SunOpta Inc. (NASDAQ:STKL) reported EPS of $0.01 and revenue of $202.27 million for the second quarter, beating the estimates by $0.01 and $3.99 million, respectively. The company’s stock has appreciated by 11.84% in the last year.
There were 26 funds tracked by Insider Monkey bullish on SunOpta Inc. (NASDAQ:STKL) at the end of June, up by five over the quarter. At the same time, the total value of these funds’ holdings declined to $514.67 million from $633.04 million.
8. Infinera Corp. (NASDAQ:INFN)
Holding Value: $256.79 million
Percentage of 13F portfolio: 3.44%
Number of Hedge Fund Holders: 21
On the eighth spot among best stocks to buy now according to billionaire Howard Marks is Infinera Corp (NASDAQ:INFN), provider of optical networking equipment, software and related services. In its latest 13F, Oaktree Capital Management disclosed ownership of 25.18 million shares of Infinera Corp (NASDAQ:INFN).
Overall, there were 21 funds in our database long Infinera Corp (NASDAQ:INFN) at the end of second quarter, holding $428.24 million worth of stock. This represents an increase from 20 funds with $372.72 million in shares a quarter earlier. .
The company missed the second-quarter estimates of a loss of $0.01 per share by reporting a loss of $0.03. At the same time, its revenue of $338.23 million was $6.65 million lower than expected.
7. PG&E Corporation. (NYSE:PCG)
Holding Value: $305.10 million
Percentage of 13F portfolio: 4.09%
Number of Hedge Fund Holders: 64
In PG&E Corporation (NYSE:PCG), Oaktree reported a $305.10 million position that included 30.0 million shares at the end of June. During the second quarter, the fund added 7.50 million shares to its holding, becoming one of the top shareholders among Institutional Investors. Aside from Marks, there were 63 other funds tracked by Insider Monkey bullish on PG&E Corporation (NYSE:PCG), down by one over the quarter. In aggregate, these investors own $4.66 billion worth of shares as of the end of June.
PG&E Corporation (NYSE:PCG) was founded in 1905 and is focused on the generation, storage and transmission of electricity and natural gas to consumers across California. For the second quarter of 2021, PG&E Corporation (NYSE: PCG) reported EPS of $0.27, missing the consensus estimate by $0.01. The firm raked in $5.21 billion in quarterly revenue, beating analysts’ forecasts by $407.98 million.
6. Ally Financial Inc. (NYSE:ALLY)
Holding Value: $342.63 million
Percentage of 13F portfolio: 4.6%
Number of Hedge Fund Holders: 54
Next in line in the list of the best stocks to buy now according to billionaire Howard Marks is Detroit-based financial company Ally Financial Inc (NYSE:ALLY). In its latest 13F filing, Marks’ Oaktree included a $342.63 million position in the company that contained 6.87 million shares, down by 4.30 million shares compared to the end of March.
Ally Financial Inc. (NYSE:ALLY) provides digital financial services and products to corporate, consumer, and commercial customers through its four segments: Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations.
Earlier this month Stephens & Co. downgraded its rating on Ally Financial Inc. (NYSE:ALLY)’s stock to ‘Equal-Weight’, with a price target of $67. In the second quarter, Ally Financial Inc (NYSE:ALLY)’s EPS of $2.33 topped the consensus by $0.83, while its revenue of $2.08 billion was $213.29 million higher than expected.
As of the end of the second quarter, 54 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ally Financial Inc (NYSE: ALLY) worth $2.43 billion in aggregate, compared to 51 hedge funds holding $2.80 billion a quarter earlier.
5. Americold Realty Trust (NYSE:COLD)
Holding Value: $445.56 million
Percentage of 13F portfolio: 5.98%
Number of Hedge Fund Holders: 16
Starting off our list of top 5 stocks to buy now according to Billionaire Howard Marks is Americold Realty Trust (NYSE:COLD), a Real Estate Investment Trust that develops and operates temperature-controlled warehouses. According to its latest 13F filing, Oaktree Capital Management owns 11.77 million shares of the company, valued at $445.56 million.
As of the end of the second quarter, 16 hedge funds from our database held positions in the Americold Realty Trust (NYSE:COLD) worth $530.32 million, compared to the same number of funds holding $804.69 million worth of stock a quarter earlier.
In the second quarter of 2021, Americold Realty Trust (NYSE:COLD) posted funds from operations of $0.15, missing estimates by $0.14. The company garnered $654.71 million in quarterly revenue, beating analysts’ forecasts by $4.92 million. In addition, it lowered its Adjusted Funds From Operations projection for fiscal 2021 to between $1.15 and $1.20 from the previous range of $1.34 to $1.40.
4. Torm PLC (NASDAQ:TRMD)
Holding Value: $ 476.29 million
Percentage of 13F portfolio: 6.39%
Number of Hedge Fund Holders: 6
At the end of June, Oaktree Capital Management reported a position worth $476.29 million consisting of 53.81 million shares of Torm PLC (NASDAQ:TRMD). Apart from Marks, five other hedge funds tracked by Insider Monkey were bullish on Torm PLC (NASDAQ:TRMD) at the end of June, up from four over the last quarter.
Headquartered in London, Torm PLC (NASDAQ:TRMD) deals in the ownership and operation of product tankers, transporting refined and crude oil products around the world. In the second quarter, Torm PLC (NASDAQ: TRMD) posted EPS of $0.04, beating estimates by $0.11, while its revenue of $150.80 million was $57.80 million higher than anticipated.
3. Vistra Corporation (NYSE:VST)
Holding Value: $ 555.32 million
Percentage of 13F portfolio: 7.45%
Number of Hedge Fund Holders: 32
On the third spot among the best stocks to buy now according to billionaire Howard Marks is Vistra Corporation (NYSE:VST), in which the investor holds 29.94 million shares worth $555.32 million. Founded in 1882 and headquartered in Texas, the company deals in electricity supply and power generation and serves approximately 4.5 million commercial, residential and industrial customers.
Vistra Corporation (NYSE: VST) was at the forefront of providing power to its Texas customers during the winter storm Uri in February 2021 and continues its recovery from the huge emergency costs incurred during the storm.
Earlier this month, the company has announced a new $2.0 billion stock buyback program expected to run from November until the end of 2022. To finance the program, Vistra Corporation has announced a private offering of a total of 1.0 million shares of preferred stock at a price of $1,000 per share.
There were a total of 32 hedge funds that held stakes in the Vistra Corporation (NYSE:VST) worth $1.32 billion in aggregate at the end of June, compared to 46 hedge funds holding $1.25 billion worth of shares a quarter earlier.
2. Star Bulk Carriers Corporation (NASDAQ:SBLK)
Holding Value: $ 596.54 million
Percentage of 13F portfolio: 8.01%
Number of Hedge Fund Holders: 24
Then there’s Star Bulk Carriers Corporation (NASDAQ:SBLK), a Greece-base provider of seaborne transportation solutions to the dry bulk cargo sector through its fleet of 128 vessels. According to the latest 13F, Oaktree Capital Management owns 25.99 million shares in the company, valued at $596.54 million.
Star Bulk Carriers Corporation (NASDAQ:SBLK) recorded earnings of $1.26 per share in the second quarter, missing estimates by $0.17. At the same time its revenue of $258.42 inched $1.62 million higher than the consensus. Year-to-date Star Bulk Carriers Corporation (NASDAQ: SBLK)’s stock has surged by 155.38%.
There were 24 funds among those we follow that were bullish on Star Bulk Carriers Corporation (NASDAQ: SBLK) at the end of June, up by eleven over the quarter. Additionally, the total value of these funds’ holdings increased from $692.20 million to $862.82 million.
Investment management firm Massif Capital mentioned Star Bulk Carriers Corporation (NASDAQ: SBLK) in its third-quarter investor letter:
“We initiated one long position, one short position and exited one position during the third quarter. Our new long position was in Star Bulk Carriers (SBLK), a pure-play dry bulk operator with roughly 120 controlled vessels and 14 million tons of combined cargo capacity globally.
SBLK has one of the better management teams in the maritime shipping industry and the lowest cost structure among all dry bulk names. After announcing their new dividend policy in May, SBLK now has one of the best payout structures in shipping. The firm has paid out $0.3 and $0.7 per share in dividends for the first and second quarters of 2021. SBLK will most likely announce a dividend for the third quarter somewhere in the $1.15-$1.25 per
share range, depending on movement in net working capital…” (Click here to see the full text)
1. Chesapeake Energy Corporation (NASDAQ:CHK)
Holding Value: $ 619.88 million
Percentage of 13F portfolio: 8.32%
Number of Hedge Fund Holders: 43
Last but not least, Chesapeake Energy Corporation (NASDAQ:CHK) ranks on the top spot in our list of best stocks to buy now according to billionaire Howard Marks. As of the end of June, Oaktree Capital Management owns 11.94 million shares of the company worth $619.87 million.
Including Howard Marks, 43 hedge funds in our database reported ownership of Chesapeake Energy Corporation (NASDAQ CHK) in the latest round of 13F filings, up from 42 in the previous quarter. The total holdings of these funds are worth $1.91 billion as of the end of June.
In the second quarter of 2021, Chesapeake Energy Corporation (NASDAQ: CHK) posted EPS of $1.64, beating estimates by $0.46. Revenue for the quarter stood at $892.00 million, topping analysts’ forecasts by $150.53 million. The company has recently appointed its CFO Domenic Dell’Osso as its CEO.
You can also take a peek at the 10 High Yield Dividend Champions and 10 Reddit’s WallStreetBets Stocks Under $5.
Follow Insider Monkey on Twitter
Suggested articles:
- Billionaire Lee Cooperman’s Top 10 Stocks
- 10 Best Stocks To Buy and Hold For 5 Years
- 10 Best Large-Cap Stocks to Buy Now
Disclosure: None. 10 Stocks to Buy Now According to Billionaire Howard Marks is originally published on Insider Monkey.
