10 Stocks to Buy Now According to Jeffrey Gates’ Gates Capital

Published March 4, 2022 at 9:21 am EST Updated August 19, 2026 at 7:40 am EDT

In this article, we discuss 10 stocks to buy now according to Jeffrey Gates’ Gates Capital.

Jeffrey Gates earned a bachelor’s degree in finance from Kansas State University and an MBA degree from the University of Pennsylvania’s Wharton School. He worked as a high-yield bond research analyst at Kidder, Peabody & Company. Between 1990 and 1995, Jeffrey Gates worked for Schroder & Co. as a high yield salesperson, and from 1995 to 1996, as a director. He focused on high yield bond research for most of his career, which dates back to 25 years. Jeffrey Gates is an event-driven financier who focuses on cash flow and long-term value generation at publicly listed companies. Jeffrey Gates founded Gates Capital in 1996. Presently, he is the president and portfolio manager of the hedge fund.

Gates Capital, a New-York based hedge fund, uses an event-driven investment approach, implying it tries to profit from short-term stock price mispricings that happen before or after a business event. Within a company’s capital structure, the hedge fund aims to locate the best risk/reward connections for long holdings and the worst risk/reward ties for short positions. It invests throughout the capital structure using a disciplined, cash-flow-oriented, and credit-focused strategy to maximize risk-adjusted returns. The hedge fund has $3.62 billion in managed 13F securities and a top 10 concentration of 53.63%, according to the 13F filing for the fourth quarter of 2021.

The hedge fund made significant investments in the fields of services, technology, finance, and healthcare. International Flavors & Fragrances Inc. (NYSE:IFF), Caesars Entertainment, Inc. (NASDAQ:CZR), and Bath & Body Works, Inc. (NYSE:BBWI) are among the hedge fund’s most prominent positions.

Jeffrey Gates’ Gates Capital fund owns 607,328 shares of International Flavors & Fragrances Inc. worth over $91.49 million, despite selling 366,053 shares in the fourth quarter. Lauren Lieberman, an analyst at Barclays, reduced her price objective on Flavors & Fragrances Inc. to $121 from $127 on February 14 and maintained an Underweight rating on the stock. The analyst expected IFF to be more flexible in its 2022 projection but warned that delivering EBITDA would be challenging in an already difficult market.

Jeffrey Gates is also bullish on Caesars Entertainment, Inc.. Even though his hedge fund slashed its stake in the company by 2% in the fourth quarter of 2021, it still owns 1.06 million shares of the company, worth $99.39 million. On February 28, Loop Capital analyst Daniel Adam boosted his price target on Caesars Entertainment, Inc. to $109 from $99 and reiterated a Buy rating on the shares.

10 Stocks to Buy Now According to Jeffrey Gates' Gates Capital

Bath & Body Works, Inc. is another large-cap stock in Gates Capital’s portfolio, in which the fund has reduced its stake by 23% in the fourth quarter of 2021. Following the Q4 results, B. Riley analyst Susan Anderson cut her price target on Bath & Body Works, Inc. to $76 from $91 and reiterated a Buy rating. The analyst said that the business provided guidance a little below the market estimates.

Our Methodology

With this economic outlook in mind, let’s start our list of the 10 stocks to buy now according to Jeffrey Gates’ Gates Capital. We picked these stocks from the Q4 portfolio of Gates’ hedge fund.

Stocks to Buy Now According to Jeffrey Gates’ Gates Capital

10. VICI Properties Inc. (NYSE:VICI)

Gates Capital Stake Value: $155,903,000

Percentage of Gates Capital’s 13F Portfolio: 4.31%

Number of Hedge Fund Holders: 37

VICI Properties Inc. (NYSE:VICI) is a casino, hospitality, and entertainment real estate investment trust that owns, buys, and develops properties. Following a limitation period, Citi analyst Smedes Rose initiated coverage of VICI Properties Inc. with a Buy rating and a $32 price target on February 7.

In the fourth quarter, Jeffrey Gates cut his stake in VICI Properties Inc. by more than 1.82 million shares, reducing his total stake by 27%. However, he still holds more than 5.18 million shares of VICI Properties Inc., worth more than $155.90 million. He first invested in VICI Properties Inc. in the first quarter of 2018.

At the end of the fourth quarter of 2021, 37 hedge funds were bullish on VICI Properties Inc., according to Insider Monkey’s exclusive database, down from 47 in Q3. Ken Griffin’s Citadel Investment Group is the most significant stakeholder in VICI Properties Inc., with 6.91 million shares worth $208.16 million.

In addition to International Flavors & Fragrances Inc., Caesars Entertainment, Inc., and Bath & Body Works, Inc., VICI Properties Inc. is a top stock pick of Jeffrey Gates’ Gates Capital.

9. Wyndham Hotels & Resorts, Inc. (NYSE:WH)

Gates Capital Stake Value: $156,394,000

Percentage of Gates Capital’s 13F Portfolio: 4.32%

Number of Hedge Fund Holders: 33

Wyndham Hotels & Resorts, Inc. is a company that operates and franchises hotels under the Wyndham name. After taking up coverage of Wyndham Hotels & Resorts, Inc. on December 2, Loop Capital analyst Daniel Adam reiterated a Buy rating on the stock with a $99 price objective.

Jeffrey Gates’ Gates Capital is one of Wyndham Hotels & Resorts, Inc.’s most prominent investors. Even after selling 220,328 shares of Wyndham Hotels & Resorts, Inc. in the fourth quarter, Jeffrey Gates’ Gates Capital still holds more than 1.74 million shares of the company, worth about $156.39 million.

According to our database, the number of Wyndham Hotels & Resorts, Inc.’s long hedge funds positions increased at the end of the fourth quarter of 2021. There were 33 hedge funds that hold a position in Wyndham Hotels & Resorts, Inc. in Q4, up from 26 funds in the third quarter.

8. Carrier Global Corporation (NYSE:CARR)

Gates Capital Stake Value: $164,738,000

Percentage of Gates Capital’s 13F Portfolio: 4.55%

Number of Hedge Fund Holders: 45

Carrier Global Corporation (NYSE:CARR) is a company that sells HVAC, security, and building automation systems. The number of hedge funds tracked by Insider Monkey having stakes in Carrier Global Corporation went down to 45 in Q4, from 46 in the preceding quarter. These stakes hold a consolidated value of $1.25 billion, down from $1.32 billion.

On February 16, Carrier Global Corporation and Marriott International announced a multi-year partnership to research and develop innovative technologies to improve in-room services and hotel construction.

Mizuho analyst Brett Linzey cut his price objective on Carrier Global Corporation to $50 from $57 on February 9 and maintained a Neutral rating on the stock. Linzey warned investors in a research note that Carrier Global Corporation’s fourth quarter was overshadowed by supply chain challenges and inflation.

Davis Funds, in its third quarter 2021 investor letter, mentioned Carrier Global Corporation. Here is what Davis Funds said about Carrier Global Corporation:

“In the industrial space, we own a select list of well-entrenched market leaders, such as Carrier Global, a global leader in heating, ventilation and air conditioning (HVAC) solutions.. These have recovered this year from their lulls in 2020, yet continue to trade at reasonable multiples of subdued earnings, creating a potential setup for the double play of recovering multiples on recovering earnings.”

7. GXO Logistics, Inc. (NYSE:GXO)

Gates Capital Stake Value: $166,223,000

Percentage of Gates Capital’s 13F Portfolio: 4.59%

Number of Hedge Fund Holders: 37

GXO Logistics, Inc. (NYSE:GXO) is a North American and European logistics company. It provides order fulfillment, warehousing and distribution, e-commerce, reverse logistics, and other supply chain services. Of the 37 hedge funds that were bullish on GXO Logistics, Inc. according to the fourth quarter database of Insider Monkey, Orbis Investment Management is the leading stakeholder of the company, holding 9.56 million shares worth $868.35 million.

On March 1, Stifel analyst J. Bruce Chan initiated coverage of GXO Logistics, Inc. with a Buy rating and setting a price target of $94. According to the analyst, supply chain instability has fueled the secular outsourcing trend, with GXO currently being the world’s largest pure-play logistics services provider.

Gates Capital owns over 1.83 million GXO Logistics, Inc. shares according to his Q4 13F filings, worth $166.22 million, representing 4.59% of the fund’s total investments for the fourth quarter of 2021. In the fourth quarter, Gates Capital boosted its stake in GXO Logistics, Inc. by 6%.

ClearBridge Investments, an investment management firm, in its third quarter 2021 investor letter mentioned GXO Logistics, Inc.. Here is what the fund said:

“GXO Logistics was recently spun off from its parent company, XPO Logistics, to become the world’s second-largest contract logistics provider. The quality of this business is underappreciated by the market because it had been embedded within XPO and lacked visibility. We believe the stock will receive a higher valuation as its attributes become more widely recognized, including revenue growth of high single to low double digits, +90% retention rate, business visibility from multiyear contracts, and +20% return on invested capital. GXO’s superior business makeup also adds to its appeal, with 30% of sales coming from automation and robotics, compared to the industry average of 5%. E-commerce and technology drive 50% of total revenue.”

6. DaVita Inc. (NYSE:DVA)

Gates Capital Stake Value: $182,181,000

Percentage of Gates Capital’s 13F Portfolio: 5.03%

Number of Hedge Fund Holders: 32

DaVita Inc. (NYSE:DVA) is a medical care company that offers various services. Legendary investor and billionaire Warren Buffett’s Berkshire Hathaway is the most significant stakeholder of DaVita Inc. out of the 924 hedge funds tracked by Insider Monkey as of the end of the fourth quarter. The Oracle of Omaha owns 36.10 million shares of the company worth $4.11 billion.

On January 18, DaVita Inc. announced the purchase of transplant software firm MedSleuth. MedSleuth is a transplant software firm that helps improve kidney and liver transplant results by linking transplant candidates, transplant facilities, physicians, and care teams. DaVita Inc. shares have returned 7.24% to investors over the last 12 months as of March 2.

At the end of the fourth quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $4.74 billion in DaVita Inc., down from 39 the preceding quarter worth $4.81 billion.

DaVita Inc. is a notable stock pick of Jeffrey Gates, just like International Flavors & Fragrances Inc., Caesars Entertainment, Inc., and Bath & Body Works, Inc..

5. S&P Global Inc. (NYSE:SPGI)

Gates Capital Stake Value: $186,694,000
Percentage of Gates Capital’s 13F Portfolio: 5.16%
Number of Hedge Fund Holders: 79

S&P Global Inc. provides the capital and commodities markets worldwide with transparent and unbiased ratings, benchmarks, analytics, and data. On March 2, JPMorgan analyst Andrew Steinerman initiated coverage on S&P Global Inc. with an Overweight rating and a price objective of $480.

S&P Global Inc. and IHS Markit Ltd. (NYSE:INFO) announced on February 25 that they intended to finalize their merger on February 28 after the Competition and Markets Authority of the United Kingdom and the European Commission awarded the deal’s final regulatory clearances. After receiving antitrust permission in the United States, the two markets and industrial information businesses agreed to a $44 billion all-stock merger in November 2020.

A total of 79 hedge funds reported owning stakes worth $7.83 billion in S&P Global Inc. during Q4 2021, compared to 78 funds in the preceding quarter, holding stakes in the company amounting to $7.04 billion.

Baron Funds, in its first-quarter 2021 investor letter, mentioned S&P Global Inc.. Here is what the fund said:

“S&P Global Inc. provides credit ratings, indexes, data, and analytics to the financial and commodities markets. Shares increased on strong fourth quarter results and 2021 guidance that exceeded Street expectations. Although bond issuance is expected to moderate after two years of exceptional growth, management still expects revenue to grow mid-single-digits this year. Also, shareholders overwhelmingly voted to approve the merger with IHS Markit. We continue to own the stock as we see a long runway for growth and significant competitive advantages for the company.”

4. Otis Worldwide Corporation (NYSE:OTIS)

Gates Capital Stake Value: $212,931,000
Percentage of Gates Capital’s 13F Portfolio: 5.88%
Number of Hedge Fund Holders: 38

Otis Worldwide Corporation (NYSE:OTIS) is a company that makes, installs, and provides escalators and escalator services. On February 3, Otis Worldwide Corporation declared a $0.24 per share quarterly dividend, in line with the previous.

Gates Capital first bought a stake in Otis Worldwide Corporation in the first quarter of 2020. In the fourth quarter of 2021, the investment fund strengthened its position in Otis Worldwide Corporation by buying 4,067 additional shares. This makes their stake in Otis Worldwide Corporation total 2.46 million shares worth $212.93 million.

Vinit Bodas’ Deccan Value Advisors is the most prominent Otis Worldwide Corporation stakeholder as of the fourth quarter, with 4.40 million shares worth $383.51 million. Overall, the Q4 database of Insider Monkey suggests that 38 hedge funds were bullish on Otis Worldwide Corporation.

In its fourth quarter 2021 investor letter, VGI Partners mentioned Otis Worldwide Corporation. Here is what the fund said:

“We also exited some core holdings during the year. We sold our OTIS position, which has been a strong performer but decided to exit based on valuation coupled with a deteriorating outlook for construction in China. China represents almost 20% of OTIS revenue but an even higher proportion of future growth; in recent months we have started to see some of these concerns play out with multiple signs pointing to a prolonged slowdown in China property construction.”

3. Element Solutions Inc (NYSE:ESI)

Gates Capital Stake Value: $233,862,000
Percentage of Gates Capital’s 13F Portfolio: 6.46%
Number of Hedge Fund Holders: 31

Element Solutions Inc (NYSE:ESI) develops chemical solutions to improve the performance of items that people use daily. Overall, 31 hedge funds in Insider Monkey’s database were bullish on Element Solutions Inc in Q4, up from 28 in the previous quarter.

On January 24, CL King analyst David Silver initiated coverage of Element Solutions Inc, giving the stock a Buy rating and setting a price target of $28. On February 15, Element Solutions Inc declared a quarterly dividend of $0.08 per share, in line with the previous.

As of the fourth quarter of 2021, Gates Capital Management is the leading shareholder of Element Solutions Inc, holding over 9.63 million shares, valued at $233.86 million. The hedge fund has reduced its stake in the firm by 5% in the fourth quarter.

2. Terminix Global Holdings, Inc. (NYSE:TMX)

Gates Capital Stake Value: $234,384,000
Percentage of Gates Capital’s 13F Portfolio: 6.48%
Number of Hedge Fund Holders: 32

Terminix Global Holdings, Inc. (NYSE:TMX) is a residential and commercial services provider. It provides termite and pest control services for both residential and commercial properties, as well as national pest control services, restoration, commercial and residential cleaning, furniture repair, and house inspections. On December 14, William Blair analyst Tim Mulrooney initiated coverage of Terminix Global Holdings, Inc., rating the stock as Outperform and giving a price objective of $55.

Terminix Global Holdings, Inc., on March 1, posted its Q4 results. The company announced earnings per share of $0.20, below estimates by $0.02. Revenue over the period totaled $484 million, up 5.2% year-over-year. Higher pricing realization and improved trailing 12-month client retention rates drove revenue growth.

By the end of the fourth quarter, Insider Monkey found Terminix Global Holdings, Inc. to be a part of 32 hedge fund portfolios. The total stakes that these funds had in the company are worth $696.02 million, up from $380.52 million the prior quarter with 20 positions.

In its fourth quarter 2021 investor letter, Cooper Investors discussed its stance on Terminix Global Holdings, Inc.. Here is what the fund said:

“In mid-December portfolio holding Rentokil Initial announced its intention to acquire US-listed Terminix Global Holdings for around US$6bn. As a reminder Rentokil is the world’s largest Pest Control business, providing annual contract-based prevention and extermination services to residential, commercial and government customers in over 80 countries across the globe.

Terminix is the largest provider of home termite services in the US and a top three player in residential and commercial pest. This deal will roughly double the size of Rentokil’s Pest Control business in North America and take them to number one in terms of market share. While we are typically wary of large acquisitions that attract the label of ‘transformational’ we feel positive about this transaction for several reasons.…” (Click here to see the full text)

1. Vista Outdoor Inc. (NYSE:VSTO)

Gates Capital Stake Value: $246,218,000
Percentage of Gates Capital’s 13F Portfolio: 6.8%
Number of Hedge Fund Holders: 25

Vista Outdoor Inc. (NYSE:VSTO) is a consumer goods company that designs, manufactures, and markets outdoor sports and entertainment equipment. According to the 13F filings for the fourth quarter of 2021, Gates Capital holds over 5.34 million Vista Outdoor Inc. shares, amounting to more than $246.22 million and representing 6.8% of the fund’s portfolio value. Gates Capital is the leading stakeholder of Vista Outdoor Inc..

On February 4, Roth Capital analyst Matt Koranda trimmed his price target on Vista Outdoor Inc. from $61 to $57 and maintained a Buy rating. According to the analyst, a continuing ammunition up-cycle would benefit Vista Outdoor Inc. over the following three quarters, albeit he saw evidence that a peak is nearing.

A total of 25 hedge funds reported owning stakes worth $460.48 million in Vista Outdoor Inc. during Q4 2021, compared to 23 funds in the preceding quarter, holding stakes in the company amounting to $407.07 million.

ClearBridge Investments, in its second quarter 2021 investor letter, mentioned Vista Outdoor Inc.. Here is what the fund said:

“Our Strategy outperformed with strong results from consumer discretionary stocks like Vista Outdoor. Vista Outdoor, a manufacturer of a wide range of products serving the outdoor sports and recreation markets, also performed well in the period on continued demand and growing margins.”

You can also take a peek at 10 Stocks to Invest in Now According to Anthony Bozza’s Lakewood Capital and 10 Stocks to Buy Now According to Wayne Yu’s BCK Capital.

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