In this article, we will take a look at 10 stocks under $50 billionaires are loading up on.
The global economy has taken massive hits in the recent past starting with the covid-19 pandemic which was followed by the Russia – Ukraine conflict. These major global catastrophes led to supply constraints and other issues which ultimately led to inflationary pressures almost all across the world. The response across the board was an increase in interest rates by the central banks.
The U.S. Federal Reserve delivered 10 consecutive interest rate hikes starting from March 2022. These hikes added full 5 percentage points to the interest rate prior to March 2022 and included four interest rate hikes of 75 basis points. In its latest meeting concluded on June 14, the Fed decided to hold off hikes for the time being with the possibility of two 25 bps increases by the end of the year.
The increase in interest rates has had a significant impact on equity valuations and there has been significant pressure on stock prices in the past year or so. In times of adversity, it pays to look up to others that have historically performed well in similar circumstances. This is the rationale behind emulating the strategies of billionaires and prominent hedge funds. You can read more about it here.
The Insider Monkey team earlier covered 10 stocks under $50 to buy according to hedge funds. The article can be found here.
Our list of 10 stocks under $50 billionaires are loading up on includes leading companies across multiple sectors, including Chinese ecommerce giant JD.Com, Inc. (NASDAQ:JD), South Korean ecommerce company Coupang, Inc. (NYSE:CPNG), global ride hailing leader Uber Technologies, Inc. (NYSE:UBER), and Pinterest, Inc. (NYSE:PINS), among others.
Photo by Karolina Grabowska from Pexels
Methodology
We used stock screeners to shortlist stocks that were trading at a share price of less than $50. We then corroborated the list with our database of stock ownership by billionaires. The final step involved the ranking of the identified list of stocks based on their popularity among the billionaires tracked by Insider Monkey.
10 Stocks Under $50 Billionaires Are Loading Up On
10. PG&E Corporation (NYSE:PCG)
Number of Billionaire Holders: 14
PG&E Corporation, based in Oakland, California, is an energy company that provides natural gas and electricity to nearly 16 million people throughout northern and central California. Its network is spread across 70,000 square miles and includes more than 100,000 circuit miles of electric distribution lines.
On May 4, PG&E Corporation released its financial results for Q1 2023. Its operating revenues increased by 7% y-o-y to $6.2 billion, while a net income of $572 million was generated during the period.
On June 6, RBC Capital analyst Shelby Tucker raised the price target on PG&E Corporation shares to $21 from $20 and maintained an ‘Outperform’ rating for the shares. The company is working on improvement in its safety processes which, combined with advanced technologies deployed by the company, should reduce risks from wildfires in the future.
As of Q1 2023, PG&E Corporation shares were held by 52 hedge funds with the total shares held by them valued at $2.9 billion. Dan Loeb’s Third Point was its largest hedge fund shareholder with ownership of 59.3 million shares valued at $958 million.
9. The Kroger Co. (NYSE:KR)
Number of Billionaire Holders: 14
Cincinnati, Ohio-based The Kroger Co. (NYSE:KR) is one of the world’s largest food retailers with more than 2,700 supermarkets and multi-department stores spread across 35 states in the United States. Its network also includes over 1,600 supermarket fuel centers, 2,200 pharmacies, 33 food production plants, and 44 distribution centers.
In October 2022, The Kroger Co. announced that it had entered into a definitive agreement to acquire Boise, Idaho-based grocery company, Albertsons Companies, Inc. (NYSE:ACI) that values the company at $24.6 billion. The transaction is expected to close in H1 2024 and may require both companies to make store divestitures to obtain requisite regulatory clearance.
The Kroger Co. has paid regular dividends since the payouts were reinstated in 2006. The dividends have grown at double-digit CAGR since that time and the company currently pays a quarterly dividend of $0.26 per share.
The Kroger Co. shares were owned by 43 hedge funds with a total value of $4.0 billion, as of March 31, 2023. Warren Buffett’s Berkshire Hathaway was its largest hedge fund shareholder with ownership of 50 million shares valued at $2.5 billion.
Oakmark Funds, advised by Harris Associates, made the following comment about The Kroger Co. in its Q1 2023 investor letter:
“Although the grocery industry is highly competitive, Kroger’s scale advantages allow it to offer a more compelling value proposition than smaller peers and earn higher returns on capital. In recent years, the market has assigned Kroger a lower multiple due to concerns that e-commerce would disrupt traditional brick-and mortar grocery businesses. However, we believe Kroger’s performance through the pandemic highlighted that its store footprint, distribution infrastructure, technology investments and strong brand all position the company well for a world with higher online grocery adoption.”
8. The Kraft Heinz Company (NASDAQ:KHC)
Number of Billionaire Holders: 14
Chicago, Illinois-based The Kraft Heinz Company (NASDAQ:KHC) is one of the largest food and beverage companies in the world. Its portfolio includes iconic brands, including Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid, Jell-O, Primal Kitchen, and Classico, among others.
The Kraft Heinz Company delivered strong results in Q1 2023 with both revenue and net income up more than 7% on a year-on-year basis. It generated $6.5 billion in net sales and $836 million in net income for the quarter. Following a strong performance in the quarter, the company also raised its adjusted EPS guidance for 2023 from an upper limit of $2.75 to $2.91.
On June 14, Morgan Stanley analyst Pamela Kaufman lowered the price target on The Kraft Heinz Company shares to $39 from $44 and maintained an ‘Equal weight’ rating for the shares.
As of Q1 2023, The Kraft Heinz Company shares were held by 34 of the 943 hedge funds tracked by Insider Monkey, with a total value of $13.1 billion. Warren Buffett’s Berkshire Hathaway was its largest hedge fund shareholder with ownership of 326 million shares valued at $12.6 billion.
7. CSX Corporation (NYSE:CSX)
Number of Billionaire Holders: 15
Based in Jacksonville, Florida, CSX Corporation (NYSE:CSX) is a leading transportation services provider with a railroad network extending to 20,000 route miles, connecting customers to major ports, distribution centers, and every major metropolitan area in the eastern United States.
On June 1, UBS analyst Thomas Wadewitz upgraded the rating for CSX Corporation shares to ‘Buy’ from ‘Neutral’, with the price target raised to $37 from $33.
As of Q1 2023, CSX Corporation was among the favorite freight stocks of hedge funds, with 61 of the 943 hedge funds tracked by Insider Monkey holding its shares valued at $4.0 billion. Soroban Capital Partners was its biggest shareholder with ownership of 52.6 million shares valued at $1.6 billion.
6. Coupang, Inc. (NYSE:CPNG)
Number of Billionaire Holders: 15
Coupang, Inc. is a leading ecommerce company based in Seoul, South Korea. It offers a variety of ecommerce related services including same-day and next-morning delivery of groceries and general merchandise, delivery of prepared foods through Coupang Eats, and video streaming through Coupang Play.
On May 9, Coupang, Inc. released its financial results for Q1 2023. Its net revenues increased by 13% y-o-y to $5.8 billion, while it generated a net income of $91 million. Following the earnings release, Citi analyst John Yu raised the price target on Coupang, Inc. shares to $21 from $19.50.
According to Insider Monkey data on 943 hedge funds, 47 hedge funds held shares of Coupang, Inc., valued at $3.3 billion, as of Q1 2023. The largest shareholder was Maverick Capital holding 74 million shares valued at $1.2 billion.
Like other stocks under $50 such as CSX Corporation, The Kraft Heinz Company, and Uber Technologies, Inc., billionaires are also loading up on Coupang, Inc. shares.
5. Match Group, Inc. (NASDAQ:MTCH)
Number of Billionaire Holders: 16
Dallas, Texas-based Match Group, Inc. (NASDAQ:MTCH) is an internet and technology company operating a portfolio of more than 40 leading dating services apps including Match, OkCupid, Tinder, and Hinge, among others.
On May 2, Match Group, Inc. reported the financial results for Q1 2023. It generated total revenues of $787 million and a net income of $121 million. Following the earnings release, TD Cowen lowered the price target on Match Group, Inc. shares to $66 from $70 but maintained an ‘Outperform’ rating for the shares.
On April 28, the board of directors of Match Group, Inc. approved a new share repurchase program for repurchase of up to $1.0 billion in its common stock. Under the previous program, the company repurchased $113 million worth of its shares during the first quarter.
According to the Insider Monkey data on 943 leading hedge funds, 52 hedge funds were long Match Group, Inc. shares as of Q1 2023, with the total shares held by hedge funds valued at $602 million.
4. JD.Com, Inc. (NASDAQ:JD)
Number of Billionaire Holders: 17
JD.Com, Inc. is the largest online retailer in China as well as the biggest internet company in the country by revenue. Its online retail platform offers products ranging from fresh food and apparel to electronics and cosmetics.
On May 18, JD.Com, Inc. released its financial and operational results for Q1 2023. It generated a revenue of $35.4 billion and a net income of $0.9 billion. It recorded a normalized EPS of $0.69 which exceeded consensus estimates by $0.18.
As of March 31, JD.Com, Inc. shares were owned by 59 of the 943 hedge funds tracked by Insider Monkey, with a total value of the share owned by these hedge funds valued at $2.5 billion. Tiger Global Management LLC was the largest hedge fund shareholder with ownership of 24 million shares valued at $1.1 billion.
3. Pinterest, Inc. (NYSE:PINS)
Number of Billionaire Holders: 17
San Francisco, California-based Pinterest, Inc. is a leading social media platform which allows users, creators, publishers, and businesses to save and publish images and videos which allow other users to discover and visualize activities. The platform boasts more than 450 million monthly active users.
On April 27, Pinterest, Inc. announced a partnership with online retail giant, Amazon.com, Inc. (NASDAQ:AMZN) which would provide users access to on-Amazon buying experience. The partnership is part of the company’s efforts to make the content available on the platform shoppable.
Pinterest, Inc. ranks 3rd on our list of stocks under $50 billionaires are loading up on. The shares of the company were owned by 17 billionaires with a total value of $1.6 billion according to the Insider Monkey database.
2. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Billionaire Holders: 18
Freeport-McMoRan Inc. (NYSE:FCX), is a leading international mining company based in Phoenix, Arizona. It operates mining operations focused on copper, gold, and molybdenum. Its portfolio of assets includes Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and mining operations in North America and South America including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.
Freeport-McMoRan Inc. sold 832 million pounds of copper, 270 thousand ounces of gold, and 19 million pounds of molybdenum during Q1 2023. The company expects a significant uptick in the sales in the upcoming quarter with copper guidance set at 1.1 billion pounds, gold at 500 thousand ounces, and molybdenum at 20 million pounds.
On April 23, Raymond James lowered the price target on Freeport-McMoRan Inc. shares to $47 and maintained an ‘Outperform’ rating on the shares.
The only mining company on our list of 10 stocks under $50 billionaires are loading up on, Freeport-McMoRan Inc. shares were held by 77 hedge funds as of Q1 2023. Ken Fisher’s Fisher Asset Management was the largest hedge fund shareholder with ownership of 54 million shares valued at $2.2 billion.
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Billionaire Holders: 21
San Francisco, California-based, Uber Technologies, Inc. provides technology platforms matching consumers looking for rides and independent ride services providers. It also offers other forms of transportation including public transit, bikes, and scooters. Other offerings include food delivery on demand, freight services, business fleet services, and same day delivery options.
On June 12, Truist Securities analyst Youssef Squali raised the price target on Uber Technologies, Inc. shares to $63 from $60 and maintained a ‘Buy’ for the shares.
As of Q1 2023, Uber Technologies, Inc. was ranked highest on our list of stocks under $50 that billionaires are loading up on. The stock was held by 21 billionaires with the total amount of billionaire investment valued at $1.1 billion. The stock was also a favorite among hedge funds as 144 hedge funds held shares of the company valued at $5.7 billion.
RiverPark Advisors, an investment advisory firm, made the following comment about Uber Technologies, Inc. in its Q1 2023 investor letter:
“UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now solidly profitable with the potential for substantial margin expansion and free cash flow generation to come.”
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This article is originally published at Insider Monkey.
