In this article, we discuss 10 stocks to invest in today according to Orkun Kilic’s Berry Street Capital.
Orkun Kilic graduated from Harvard Business School with a master’s degree in business administration. He began his professional career with Fiba Capital as an Investment Analyst. He also worked as an associate at Morgan Stanley. Orkun Kilic was the managing partner of Paulson Europe LLP and the portfolio manager of the Paulson European Opportunities Fund before forming Berry Street Capital.
Orkun Kilic created Berry Street Capital, a London-based hedge fund, in 2019. Technology, healthcare, financial services, real estate, and essential materials are primary areas in which Berry Street Capital invests. As of the fourth quarter of 2021, the hedge fund’s 13F portfolio has about $970.45 million in managed securities.
Some of the essential holdings to analyze based on Orkun Kilic’s stock portfolio in the fourth quarter of 2021 are Twitter, Inc. (NYSE:TWTR), Discovery, Inc. (NASDAQ:DISCA), and Cerner Corporation (NASDAQ:CERN), among others.
Twitter, Inc. is a new arrival in Orkun Kilic’s portfolio, as his hedge fund bought about 37,500 shares of the company in Q4, worth $1.62 million. On March 10, Deutsche Bank analyst Benjamin Black initiated coverage of Twitter, Inc., rating the stock as a ‘Hold’ and giving a price target of $35.
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Another stock that was added to the Kilic’s portfolio in the fourth quarter is Discovery, Inc., in which he purchased 350,000 shares. Credit Suisse analyst Douglas Mitchelson decreased his price objective on Discovery, Inc. from $61 to $52 on February 14 and maintained an ‘Outperform’ rating on the stock.
Berry Street Capital holds 90,000 shares in Cerner Corporation, according to its 13F filing for the fourth quarter of 2021. On February 22, Cerner Corporation reported earnings per share of $0.93 for the fourth quarter, exceeding estimates by $0.05. In addition, the company’s quarterly revenue was up 3.6% from the prior-year quarter, amounting to $1.45 billion.
Our Methodology
With this background in mind, let’s start our list of 10 stocks to invest in today according to Orkun Kilic’s Berry Street Capital. For this list, we considered Kilic’s 13F portfolio as of the end of Q4 2021.
Note: All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
Stocks to Invest In Today According to Orkun Kilic’s Berry Street Capital
10. RR Donnelley & Sons Company (NYSE:RRD)
Berry Street Capital Stake Value: $14,808,000
Percentage of Berry Street Capital’s 13F Portfolio: 1.52%
Number of Hedge Fund Holders: 26
An integrated communications provider, RR Donnelley & Sons Company helps businesses design, manage, deliver, and optimize multichannel marketing and business communications. Chatham Asset Management and RR Donnelley & Sons Company announced on February 25 that they finalized a deal in which Chatham affiliates bought RRD for $10.85 per share in cash.
Carl Tiedemann and Michael Tiedemann’s TIG Advisors is the most significant stakeholder of RR Donnelley & Sons Company in our database, with 3.28 million shares worth $36.90 million. In the fourth quarter, Berry Street Capital added RR Donnelley & Sons Company to its portfolio, buying 1.32 million shares.
Hedge funds are loading up on RR Donnelley & Sons Company, as Insider Monkey’s data shows that 26 hedge funds held stakes in the company as of the end of the fourth quarter of 2021, compared to 14 funds in the preceding quarter.
Apart from Twitter, Inc., Discovery, Inc., and Cerner Corporation, RR Donnelley & Sons Company is also one of the favorite stocks of Berry Street Capital.
9. CyrusOne Inc. (NASDAQ:CONE)
Berry Street Capital Stake Value: $15,701,000
Percentage of Berry Street Capital’s 13F Portfolio: 1.61%
Number of Hedge Fund Holders: 43
CyrusOne Inc. (NASDAQ:CONE) is a real estate investment trust that owns and maintains enterprise-class, multi-tenant, carrier-neutral, and single-tenant data center buildings. Elite hedge funds held significant stakes in CyrusOne Inc. in Q4 2021. The fourth quarter database of Insider Monkey indicated that 43 hedge funds were bullish on CyrusOne Inc., up from 27 funds in the prior quarter.
Orkun Kilic loaded up on CyrusOne Inc. in the fourth quarter, increasing his holding in the company by a whopping 205%. Berry Street Capital owns 175,000 shares of the company, worth $15.70 million. On February 16, CyrusOne declared a quarterly dividend of $0.52 per share, in line with its previous payout.
On February 2, TD Securities analyst Jonathan Kelcher downgraded CyrusOne Inc. to ‘Tender’ from ‘Hold’, with a $90.50 price objective, after the approval of the REIT’s takeover by Global Infrastructure Partners and KKR & Co. Inc..
8. Pilgrim’s Pride Corporation (NASDAQ:PPC)
Berry Street Capital Stake Value: $16,215,000
Percentage of Berry Street Capital’s 13F Portfolio: 1.67%
Number of Hedge Fund Holders: 31
In the United States and Mexico, Pilgrim’s Pride Corporation makes prepared and fresh chicken products. BMO Capital analyst Kenneth Zaslow upgraded Pilgrim’s Pride Corporation to ‘Outperform’ from ‘Market Perform’ on March 10, with a $30 price objective, up from $28.
As of the end of the fourth quarter, 31 hedge funds in Insider Monkey’s database held stakes in Pilgrim’s Pride Corporation, an increase compared to 25 funds in the preceding quarter. In addition, Berry Street Capital also strengthened its position in Pilgrim’s Pride Corporation by buying an additional 125,000 shares. This makes their stake in Pilgrim’s Pride Corporation total 575,000 shares worth $16.22 million.
7. BHP Group Limited (NYSE:BHP)
Berry Street Capital Stake Value: $16,437,000
Percentage of Berry Street Capital’s 13F Portfolio: 1.69%
Number of Hedge Fund Holders: 21
BHP Group Limited (NYSE:BHP) is a mining firm that specializes in iron ore, metallurgical coal, and copper exploration, development, production, and processing. On March 10, Deutsche Bank analyst Liam Fitzpatrick raised his price target on BHP Group Limited to 2,300 GBp from 2,100 GBp and reiterated a ‘Hold’ rating on the shares.
BHP Group Limited issued a semi-annual dividend of $3.00 per share on February 23, a 25% drop from the previous payout of $4.00. Orkun Kilic initiated a new stake in BHP Group Limited in the fourth quarter of 2021, purchasing 275,000 shares of the mining company, worth $16.44 million.
As of the end of the fourth quarter, 21 hedge funds in the database of Insider Monkey reported owning stakes in BHP Group Limited, worth $1 billion. This is compared to 18 funds being bullish on the stock in Q3, with stakes amounting to $899.84 million.
Harding Loevner, in its first quarter 2021 investor letter, mentioned BHP Group. Here is what the fund said:
“Our purchase of Australian mining company BHP is an example of a quality company at a moderate valuation that should deliver attractive long-term returns. We believe the market has undervalued its enduring competitive advantage due to its low-cost iron and copper mining operations which has allowed the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle. While the variability of commodity prices prevents BHP from scoring in the top ranks of measured quality, we are willing to bear some of that uncertainty in return for a more attractive valuation given the company’s strong business fundamentals.”
6. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Berry Street Capital Stake Value: $23,007,000
Percentage of Berry Street Capital’s 13F Portfolio: 2.37%
Number of Hedge Fund Holders: 66
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is a multinational advising and solutions firm that helps clients convert risk into opportunity worldwide. Willis Towers Watson Public Limited Company changed its Nasdaq ticker symbol from WLTW to WTW on January 7.
Willis Towers Watson Public Limited Company recently saw a decrease in hedge fund sentiment. The number of long hedge fund positions declined to 66 at the end of the fourth quarter, compared to 75 positions in the previous quarter. First Eagle Investment Management is the most significant stakeholder of Willis Towers Watson Public Limited Company among that group, trimming its stake in the company by 1% during Q4 to 4.74 million shares worth almost $1.13 billion.
Willis Towers Watson Public Limited Company was downgraded to ‘Equal Weight’ from ‘Overweight’ by Wells Fargo analyst Elyse Greenspan on February 9, with a price objective of $240, down from $284. According to the analyst, the fourth quarter revealed that Willis Towers Watson Public Limited Company will need time to recover to a level of organic growth akin to its peers.
Watson Public Limited Company, like Twitter, Inc., Discovery, Inc., and Cerner Corporation, is gaining the attention of Orkun Kilic.
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)
5. Pershing Square Tontine Holdings, Ltd. (NYSE:PSTH)
Berry Street Capital Stake Value: $24,650,000
Percentage of Berry Street Capital’s 13F Portfolio: 2.54%
Number of Hedge Fund Holders: 55
Pershing Square Tontine Holdings, Ltd. (NYSE:PSTH) is a Bill Ackman-founded blank check firm that went public on July 22, 2020, with a market capitalization of $4 billion. Pershing Square Tontine Holdings, Ltd. is one of the latest acquisitions of Berry Street Capital. The hedge fund held shares worth over $24.65 million in Pershing Square Tontine Holdings, Ltd., representing 2.54% of its 13F portfolio.
At the end of the fourth quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $964.92 million in Pershing Square Tontine Holdings, Ltd., up from 49 positions in the previous quarter valued at $798.59 million.
In its fourth quarter 2021 investor letter, Pershing Square Capital Management, an investment management firm, mentioned Pershing Square Tontine Holdings, Ltd.. Here is what the fund said:
“While seeking a transaction for PSTH, we are simultaneously looking to improve its structure with the launch of SPARC.
SPARC seeks to improve upon PSTH’s structure:
✓ Investors opt-in to the initial business combination (“IBC”)
✓ Reduced opportunity cost with no investor funding until a target is identified
✓ Amount of capital raised can be precisely tailored to capital requirements of merger partner
✓ Up to 10 years to complete a transaction vs. 2 years for a typical SPAC
✓ No underwriting fees
✓ Pure common stock capital structure other than 20% out-of-the-money warrants on 5.21% of shares outstanding held by Pershing Square funds and SPARC directors
Timing of SPARC distribution assuming receipt of regulatory approval:
If PSTH executes an IBC before SPARC registration statement is declared effective, distribution of SPARs to PSTH shareholders and warrantholders would occur shortly prior to IBC closing.
If PSTH does not consummate an IBC, distribution would occur concurrently with return of PSTH capital in trust…” (Click here to see the full text)
4. Nuance Communications, Inc. (NASDAQ:NUAN)
Berry Street Capital Stake Value: $29,043,000
Percentage of Berry Street Capital’s 13F Portfolio: 2.99%
Number of Hedge Fund Holders: 55
Nuance Communications, Inc. (NASDAQ:NUAN) develops conversational and cognitive artificial intelligence (AI) solutions that help people make better decisions in their daily lives. Microsoft Corporation (NASDAQ:MSFT) announced the completion of its purchase of Nuance Communications, Inc. on March 4.
The hedge fund of Orkun Kilic entered the fourth quarter of 2021 with 525,000 shares of Nuance Communications, Inc. in its portfolio worth around $29.04 million. The company has featured in Kilic’s portfolio since the second quarter of 2021.
At the end of 2021, 55 hedge funds in Insider Monkey’s database owned holdings in Nuance Communications, Inc. worth $4.67 billion, down from 61 in the previous quarter with positions totaling $4.87 billion.
Rhizome Partners, in its third quarter 2021 investor letter, mentioned Nuance Communications Inc.. 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.”
3. Coherent, Inc. (NASDAQ:COHR)
Berry Street Capital Stake Value: $62,470,000
Percentage of Berry Street Capital’s 13F Portfolio: 6.43%
Number of Hedge Fund Holders: 38
Coherent, Inc. (NASDAQ:COHR) is a laser and optics company that serves the microelectronics, life sciences, industrial, scientific and aerospace, and defense industries. Simon Leopold of Raymond James upgraded II-VI Incorporated (NASDAQ:IIVI), which is set to acquire Coherent in the first-half of 2022, from ‘Market Perform’ to ‘Outperform’, with a $77 price objective on January 3. Hyperscale builders investing in 400G, 200G, and 100G fiber wireless connectivity, according to Leopold, are expected to fuel significant growth.
Coherent, Inc. is also getting the attention of the smart money. As of the end of the fourth quarter, 38 hedge funds tracked by Insider Monkey disclosed having long positions in the firm, up from 37 funds a quarter earlier..
According to Berry Street Capital’s 13F filing for the fourth quarter of 2021, the fund owns 234,375 shares of Coherent, Inc. worth $62.47 million, representing 6.43% of the fund’s portfolio value. In addition, the fund increased its stake in Coherent, Inc. by 71% during the fourth quarter.
Appleseed Fund mentioned Coherent, Inc. 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.”
2. IHS Markit Ltd. (NYSE:INFO)
Berry Street Capital Stake Value: $64,754,000
Percentage of Berry Street Capital’s 13F Portfolio: 6.67%
Number of Hedge Fund Holders: 69
IHS Markit Ltd. (NYSE:INFO) is a globally diversified information, analytics, and solutions company. Matthew Halbower’s Pentwater Capital Management is the biggest stakeholder of IHS Markit Ltd. in our database, owning 9.31 million shares worth $1.24 billion.
Out of the 924 hedge funds in our database that filed 13Fs for the December quarter, 69 of them were shareholders of IHS Markit Ltd. on December 31, with positions worth $8.55 billion, up from 64 funds holding stakes in IHS Markit Ltd. worth $6.72 billion a quarter earlier.
BMO Capital analyst Jeffrey Silber trimmed his price objective on IHS Markit Ltd. to $118 from $142 on January 24 and maintained a ‘Market Perform’ rating on the stock. Silber told investors that his lower target price reflected the projected takeover value of S&P Global Inc. (NYSE:SPGI), expected to be completed this quarter.
Artisan Partners, an investment management firm, mentioned IHS Markit Ltd. in its investor letter for the first quarter of 2021. Here is what it said:
“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.”
1. Xilinx, Inc. (NASDAQ:XLNX)
Berry Street Capital Stake Value: $100,714,000
Percentage of Berry Street Capital’s 13F Portfolio: 10.37%
Number of Hedge Fund Holders: 68
Xilinx, Inc. (NASDAQ:XLNX) is a technology business that creates processing systems that are both versatile and adaptable. Berry Street Capital increased its Xilinx, Inc. stake by 34% in the fourth quarter of 2021, holding 475,000 shares of the company worth $100.71 million.
On February 14, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced that it had completed its all-stock purchase of Xilinx, Inc.. AMD anticipates the acquisition to enhance non-GAAP margins, non-GAAP EPS, and free cash flow generation in the first year. On February 22, Bernstein analyst Stacy Rasgon upgraded Advanced Micro Devices, Inc. (NASDAQ:AMD) to ‘Outperform’ from ‘Market Perform’ and gave a price target of $150.
The number of hedge funds tracked by Insider Monkey having stakes in Xilinx, Inc. grew to 68 in Q4, up from 62 in the preceding quarter. Those stakes held a consolidated value of $5.91 billion, up from $4.54 billion at the end of Q3.
For more on the latest hedge fund moves, check out 9 Stocks to Buy According to Robert W. Koehn’s Ivy Lane Capital and 9 Stocks to Invest In According to Joshua Kushner’s Thrive Capital
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This article is originally published at Insider Monkey.
