In this article, we discuss 10 stocks to buy now according to Wayne Yu’s BCK Capital.
Wayne Yu is a Harvard College and University of Chicago Law School graduate. Before founding BCK Capital in 2015, he served as a managing director at Citadel and Societe Generale. Wayne Yu has over 15 years of strategy execution expertise and past legal knowledge. He presently works at BCK Capital as the chief executive officer and chief investment officer.
BCK Capital is situated in Stamford, Connecticut. The hedge fund maintains a global market-neutral exceptional circumstances strategy that aims to offer pure alpha to clients by adopting a robust risk management method to defend against market beta exposure effectively. In addition, BCK Capital monitors future revaluations regularly when stock ownership transfers between different investor groups with varied risk/reward expectations. In the fourth quarter of 2021, BCK Capital valued its 13F public stock portfolio at $148.48 million, with a 45.16% concentration of top ten holdings.
Some of the essential holdings to analyse based on Wayne Yu’s stock portfolio in the fourth quarter of 2021 are Walt Disney Company (NYSE:DIS), CyrusOne Inc. (NASDAQ:CONE), and NortonLifeLock Inc. (NASDAQ:NLOK), among others.
In Walt Disney Company (NYSE:DIS), Wayne Yu owns 3,826 shares. Evercore ISI analyst Vijay Jayant trimmed his price target on Walt Disney Company (NYSE:DIS) from $200 to $190 on February 10, but kept an Outperform rating on the company. He noticed a deflation of the streaming valuation multiple in his sum-of-the-parts approach.
BCK Capital added CyrusOne Inc. (NASDAQ:CONE) to its portfolio in the fourth quarter by buying 22,556 shares. Following the approval of CyrusOne Inc. (NASDAQ:CONE)’s purchase by KKR & Co. Inc. (NYSE:KKR) and Global Infrastructure Partners for $90.50 per share, TD Securities analyst Jonathan Kelcher downgraded CyrusOne Inc. (NASDAQ:CONE) to Tender from Hold with a $90.50 price objective on February 2.
Wayne Yu is bullish on NortonLifeLock Inc. (NASDAQ:NLOK). The fund increased its holding in NortonLifeLock Inc. (NASDAQ:NLOK) by 2% in the fourth quarter, ending the period with 103,119 shares of the company. On February 7, NortonLifeLock Inc. (NASDAQ:NLOK) announced a quarterly dividend of $0.125 per share, in line with the previous.
Our Methodology
Here is a list of 10 stocks to buy now according to Wayne Yu’s BCK Capital. We used Yu’s 13F portfolio for Q4 2021 for this analysis. Using Insider Monkey’s hedge fund data for the third quarter of 2021, we also highlighted the number of hedge funds holding interests in these stocks.
Stocks to Buy Now According to Wayne Yu’s BCK Capital
10. Coherent, Inc. (NASDAQ:COHR)
BCK Capital Stake Value: $3,375,000
Percentage of BCK Capital’s 13F Portfolio: 2.27%
Number of Hedge Fund Holders: 37
Coherent, Inc. (NASDAQ:COHR) is an optics and laser company that serves microelectronics, life sciences, industrial production, scientific, aerospace, and defence industries. Matthew Halbower’s Pentwater Capital Management is the leading stakeholder of Coherent, Inc. (NASDAQ:COHR), with a $373.69 million stake in the firm.
Coherent, Inc. (NASDAQ:COHR) reported financial results for the fourth quarter of 2021 on February 9, with earnings per share of $2.32, crossing estimates by $0.56. In addition, the company declared a revenue of $384.5 million, missing market predictions by $7.75 million.
By the end of the third quarter of 2021, 37 hedge funds held stakes in Coherent, Inc. (NASDAQ:COHR), worth roughly $1.46 billion. This is compared to 43 hedge fund holders in the previous quarter, with a total stake value of approximately $1.53 billion.
Just like Walt Disney Company (NYSE:DIS), CyrusOne Inc. (NASDAQ:CONE), and NortonLifeLock Inc. (NASDAQ:NLOK), Coherent, Inc. (NASDAQ:COHR) is a noteworthy stock in Wayne Yu’s BCK Capital portfolio.
Appleseed Fund mentioned Coherent, Inc. (NASDAQ:COHR) in its first-quarter 2021 investor letter. Here is what the fund said:
“Our most significant contributors to the Fund’s equity performance during the quarter (includes) Coherent (COHR). During the quarter, Coherent announced that it was being acquired, after which several other bidders emerged. Between the takeover announcement and the bidding war among Coherent suitors, the shares rallied strongly during the quarter.”
9. Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD)
BCK Capital Stake Value: $3,385,000
Percentage of BCK Capital’s 13F Portfolio: 2.27%
Number of Hedge Fund Holders: 33
Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) is a company that provides solutions in the aerospace and military industries, in addition to real estate expertise. Jefferies analyst Greg Konrad raised Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) to Buy from Hold on February 8, with a price target of $47, down from $49.
Lockheed Martin Corporation (NYSE:LMT) of the United States cancelled plans to buy Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) for $4.4 billion on February 13 due to antitrust concerns in the United States.
Wayne Yu’s BCK Capital holds a total of 72,391 shares in Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) worth $3.39 million, making up 2.27% of the total holdings. Out of the hedge funds being tracked by Insider Monkey, 33 funds held stakes in Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) in Q3, up from 29 in Q2 2021.
8. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
BCK Capital Stake Value: $3,443,000
Percentage of BCK Capital’s 13F Portfolio: 2.31%
Number of Hedge Fund Holders: 75
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is a multinational advising and solutions firm that helps clients convert risk into opportunity worldwide. On January 7, Willis Towers Watson Public Limited Company (NASDAQ:WTW) stated that its Nasdaq stock ticker sign would change to “WTW” from “WLTW.”
David Motemaden of Evercore ISI initiated coverage of Willis Towers Watson Public Limited Company (NASDAQ:WTW) with an In-Line rating and a $240 price target on December 16. Willis Towers Watson Public Limited Company (NASDAQ:WTW), on February 8, posted earnings for the fourth quarter. The reported EPS came in at $5.67, in line with consensus estimates. Revenue over the period gained 1.5% compared to the previous-year quarter, reaching $2.71 billion, below estimates by $80 million.
According to the data of Insider Monkey, the number of hedge funds that owned shares of Willis Towers Watson Public Limited Company (NASDAQ:WTW) as of Q3 increased to 75 from 70 as compared to the previous quarter.
In its third-quarter 2021 investor letter, Vltava Fund mentioned Willis Towers Watson Public Limited Company (NASDAQ:WLTW). Here is what the fund said:
“The second position is much larger and was thrown into our hands by an unexpected turn of events. It is the stock of Willis Towers Watson. This is a British company with roots dating back to 1828. WLTW is the third-largest insurance broker in the world. This is a sector with which we are very familiar, as some time ago we held in our portfolio shares of its slightly larger competitor AON.
It was AON in fact that announced last spring it had agreed to merge with WLTW. In the merger, WLTW shareholders would have received AON shares. As is usually the case with such announcements, investors stepped in to conduct what is known as merger arbitrage. In this particular case, they bought WLTW shares and sold short AON shares in order to profit from the fact that the prices of the two stocks did not yet fully reflect the exchange ratio in the merger. Moreover, merger arbitrage commonly makes extensive use of leverage in order to increase profits…” (Click here to see the full text)
7. SciPlay Corporation (NASDAQ:SCPL)
BCK Capital Stake Value: $3,735,000
Percentage of BCK Capital’s 13F Portfolio: 2.51%
Number of Hedge Fund Holders: 23
SciPlay Corporation (NASDAQ:SCPL) is a company that creates and publishes mobile and web-based digital games. As of the third quarter of 2021, 23 hedge funds out of the 867 tracked by Insider Monkey held stakes in SciPlay Corporation (NASDAQ:SCPL), compared to 17 in the previous quarter.
On January 26, Macquarie analyst Aaron Lee cut his price objective on SciPlay Corporation (NASDAQ:SCPL) from $24 to $20 and kept an Outperform rating, citing that the stock does not correctly reflect the company’s value.
BCK Capital owns about 271,072 shares in SciPlay Corporation (NASDAQ:SCPL), which accounts for 2.51% of its total portfolio. Engine Capital is the leading shareholder of SciPlay Corporation (NASDAQ:SCPL), with 1.81 million shares worth $24.94 million.
6. Pilgrim’s Pride Corporation (NASDAQ:PPC)
BCK Capital Stake Value: $4,083,000
Percentage of BCK Capital’s 13F Portfolio: 2.74%
Number of Hedge Fund Holders: 25
Pilgrim’s Pride Corporation (NASDAQ:PPC) is a multinational food corporation based in the United States. On February 9, Pilgrim’s Pride Corporation (NASDAQ:PPC) published earnings for the fourth quarter, announcing an EPS of $0.56, beating estimates by $0.03. In addition, the $4.04 billion revenue for the period was up 29.5% year-over-year, exceeding estimates by $230 million.
BCK Capital started building its position in Pilgrim’s Pride Corporation (NASDAQ:PPC) in the fourth quarter of 2020. In Q4 2021, the hedge fund held 144,782 shares of the company, valued at $4.08 million. The company represents 2.74% of the fund’s 13F portfolio.
Pilgrim’s Pride Corporation (NASDAQ:PPC) is getting the attention of the smart money, as 25 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the third quarter, up from 18 funds a quarter earlier.
Like Pilgrim’s Pride Corporation (NASDAQ:PPC), Wayne Yu’s BCK Capital holds significant stakes in Walt Disney Company (NYSE:DIS), CyrusOne Inc. (NASDAQ:CONE), and NortonLifeLock Inc. (NASDAQ:NLOK).
5. SPX FLOW, Inc. (NYSE:FLOW)
BCK Capital Stake Value: $5,475,000
Percentage of BCK Capital’s 13F Portfolio: 3.68%
Number of Hedge Fund Holders: 27
SPX FLOW, Inc. (NYSE:FLOW) provides process solutions for the nutrition, health, and industrial industries. Julian Mitchell, a Barclays analyst, boosted his price objective on SPX FLOW, Inc. (NYSE:FLOW) to $86 from $75 on January 4 and maintained an Equal Weight rating on the stock, citing his expectation that inflation will improve sales for multi-industry firms in Q4.
On February 10, SPX FLOW, Inc. (NYSE:FLOW) reported an EPS of $0.20 for the fiscal fourth quarter of 2021, falling short of estimates by $0.02. On the other hand, the company’s revenue for the quarter came in at $983.49 million, missing market estimates by $7.63 million.
BCK Capital holds 63,312 shares in SPX FLOW, Inc. (NYSE:FLOW) as of Q4 2021, valued at $5.48 million. The company accounts for 3.68% of the hedge fund’s 13F portfolio. Of the 27 hedge funds that were bullish on SPX FLOW, Inc. (NYSE:FLOW), Ian Simm’s Impax Asset Management is the leading stakeholder of the company, holding 1.61 million shares worth over $139.62 million.
Diamond Hill Capital, an investment management firm, in its third-quarter 2021 investor letter mentioned SPX FLOW, Inc. (NYSE:FLOW). Here is what the fund said:
“On an individual holdings’ basis, top contributors to return included SPX Flow. SPX Flow, a manufacturer of industrial flow control systems such as pumps, valves and mixers, benefited from news it had been approached by Ingersoll Rand about a possible acquisition. SPX rejected the proposal but is reviewing its strategic options, including interest from two other potential buyers. To us, this is a sign the market still undervalues this quality business but other strategic buyers see the value we do. We are confident management will either hold out for a price reflective of long-term intrinsic value or continue to execute as a standalone company, growing intrinsic value at an attractive rate for years to come.”
4. Cerner Corporation (NASDAQ:CERN)
BCK Capital Stake Value: $6,723,000
Percentage of BCK Capital’s 13F Portfolio: 4.52%
Number of Hedge Fund Holders: 36
Cerner Corporation (NASDAQ:CERN) provides health information technology services, systems, and hardware in the United States. Following reports of Oracle Corporation (NYSE:ORCL)’s plans to acquire Cerner Corporation (NASDAQ:CERN), KeyBanc analyst Donald Hooker downgraded the stock to Sector Weight from Overweight on December 21.
Wayne Yu’s BCK Capital added Cerner Corporation (NASDAQ:CERN) to its portfolio in the fourth quarter of 2021, buying 72,391 shares. At the end of the third quarter of 2021, 36 hedge funds in the database of Insider Monkey held stakes valued at $1.28 billion in Cerner Corporation (NASDAQ:CERN), down from 38 the preceding quarter totaling $1.39 billion.
Cooper Investors, in its first-quarter 2021 investor letter, discussed its stance on Cerner Corporation (NASDAQ:CERN). Here is what the fund said:
“The investment in Cerner, made just over a year ago, was based on what we perceived to be a Low-Risk Turnaround opportunity as a refreshed management team sought to increase margins, reduce capex and utilise balance sheet latency with buybacks and acquisitions. Taking account of the tough 2020 for Cerner’s hospital client base the company did a reasonable job executing on these initiatives. However, moving into 2021 more recent observations around intentionality and focus led to a reassessment of the investment proposition, particularly relative to the portfolio’s other technology and software investments.”
3. Xilinx, Inc. (NASDAQ:XLNX)
BCK Capital Stake Value: $9,977,000
Percentage of BCK Capital’s 13F Portfolio: 6.71%
Number of Hedge Fund Holders: 62
Xilinx, Inc. (NASDAQ:XLNX) is a company that designs and develops programmable logic semiconductor devices, as well as the software design tools that go with them. On February 14, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced that it had completed its all-stock acquisition of Xilinx, Inc. (NASDAQ:XLNX).
Truist analyst William Stein boosted his price objective for Xilinx, Inc. (NASDAQ:XLNX) to $190 from $180 on January 27, but maintained a Hold recommendation on the stock. On January 26, Xilinx, Inc. (NASDAQ:XLNX) issued a quarterly dividend of $0.37 per share, in line with the previous.
As of the end of the third quarter, 62 hedge funds in Insider Monkey’s database of 867 funds held stakes in Xilinx, Inc. (NASDAQ:XLNX), up from 59 funds in the second quarter.
2. Nuance Communications, Inc. (NASDAQ:NUAN)
BCK Capital Stake Value: $10,011,000
Percentage of BCK Capital’s 13F Portfolio: 6.74%
Number of Hedge Fund Holders: 61
Nuance Communications, Inc. (NASDAQ:NUAN) provides conversational artificial intelligence and ambient clinical intelligence services. Nuance Communications, Inc. (NASDAQ:NUAN), on February 7, posted earnings for the fourth quarter of 2021, reporting a revenue of $321.4 million, down 7.1% YoY.
Matthew Halbower’s Pentwater Capital Management is one of the leading Nuance Communications, Inc. (NASDAQ:NUAN) stakeholders as of Q4 2021, with 17.34 million shares worth $959.25 million. BCK Capital holds 180,973 shares in Nuance Communications, Inc. (NASDAQ:NUAN), worth over $10 million, representing 6.74% of its investment portfolio. The hedge fund has increased its Nuance Communications, Inc. (NASDAQ:NUAN) stake by 23% in the fourth quarter.
Overall, at the end of Q3, 61 hedge funds tracked by Insider Monkey held stakes in Nuance Communications, Inc. (NASDAQ:NUAN) valued at $4.87 billion, down from 72 funds in Q2.
Rhizome Partners mentioned Nuance Communications Inc. (NASDAQ: NUAN) in its third-quarter 2021 investor letter. Here is what the firm said:
“We also exited our small position in Nuance upon Microsoft’s acquisition. Nuance is a leader in voice recognition software, with dominant market share, and its speech-to-text product is the gold standard in radiology. In addition, by eliminating the need for note taking and allowing doctors to focus on patient care, Nuance could transform the way doctors treat patients. We built a 1% position in Nuance after attending its comprehensive investor day. Our view is that if Nuance can successfully grow its voice-recognition software in doctor’s offices, it could be worth multiples of our cost basis. Microsoft’s acquisition eliminated the multi-bagger upside but also partially validates the belief that Nuance is a high-quality technology company. We exited Nuance with a 62% gain in less than a year. This example is representative of the slight adjustments we made to our portfolio construction. We will allocate to small bets on technology and high-growth companies that could increase our exposure to “right tail” upside. Rest assured that our focus is still roughly 50% real estate, 30% high-quality companies trading at cheap multiples of free cash flow, and the rest in investments with the potential for growth and higher upside.”
1. IHS Markit Ltd. (NYSE:INFO)
BCK Capital Stake Value: $16,839,000
Percentage of BCK Capital’s 13F Portfolio: 11.34%
Number of Hedge Fund Holders: 64
IHS Markit Ltd. (NYSE:INFO) is a globally diversified information, analytics, and solutions company. Based on its 13F holdings for the fourth quarter of 2021, BCK Capital owns 126,686 shares in IHS Markit Ltd. (NYSE:INFO), a position valued at $16.84 million.
On January 24, BMO Capital analyst Jeffrey Silber lowered his price target on IHS Markit Ltd. (NYSE:INFO) to $118 from $142 and kept a Market Perform rating on the shares. Silber told investors that his lower target price reflected S&P Global Inc. (NYSE:SPGI)’s estimated takeover value, which is likely to conclude this quarter.
Overall, hedge funds are loading up on IHS Markit Ltd. (NYSE:INFO), as 64 out of the 867 funds tracked by Insider Monkey held stakes in the company, up from 61 funds a quarter earlier.
In their first quarter investor letter, Artisan Partners mentioned IHS Markit Ltd. (NYSE:INFO) in their first-quarter investor letter. Here is what Artisan Partners stated about IHS Markit Ltd. (NYSE:INFO):
“We ended our campaign in IHS Markit. IHS Markit is a global provider of information services to the financial services, automotive and energy sectors. Since beginning our investment campaign in 2009, we have been attracted to the company’s position relative to the meaningful secular tailwind driving demand for data and analytics to help guide business decisions. The company announced in Q4 it is merging with S&P Global, one of the largest credit ratings agencies globally and a provider of benchmarks, data and analytics to the global capital and commodities markets. We believe the combination provides a good level of cost and revenue synergies which will help drive profit growth, and S&P Global has a solid track record of acquiring and integrating new businesses. However, we exited our position as the combined entity will be well beyond our mid-cap market cap mandate.”
You can also take a peek at Top 10 Stocks to Buy According to John Orrico’s Water Island Capital and Top 10 Stock Picks of Samuel Isaly’s OrbiMed Advisors.
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Disclosure: None. 10 Stocks to Buy Now According to Wayne Yu’s BCK Capital is originally published on Insider Monkey.
