In this article, we will take a look at billionaire Kerr Neilson’s investment strategy and portfolio performance. We also reviewed the 10 best stocks to buy according to billionaire Kerr Neilson.
Billionaire Kerr Neilson, the co-founder of $16 billion Platinum Asset Management, is regarded as one of the most successful investment managers and often compared to Warren Buffett due to his value-based contrarian stock-picking strategies. Johannesburg-born Australian billionaire bought his first stock at the age of 13. After earning a bachelor’s of commerce degree from the University of Cape Town, he moved to Australia and worked for Bankers Trust Australia Ltd. In 1994, with the financial backing of legendary George Soros, he founded Platinum Asset Management, an Australia-based hedge fund specializing in global equities. Kerr Neilson, 71, who is ranked among Australia’s 50 richest people since 2010, is now sitting on a net worth of $1.2 billion.
His top ten stocks holdings include Westinghouse Air Brake Technologies Corporation (NYSE:WAB), The Mosaic Company (NYSE:MOS), General Electric Company (NYSE:GE), Barrick Gold Corporation (NYSE:GOLD), and Louisiana-Pacific Corporation (NYSE:LPX).
Kerr Neilson of Platinum Asset Management
Why should we pay attention to Kerr Neilson’s stocks? 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 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s start digging into the 10 best stocks to buy according to billionaire Kerr Neilson. We made use of Platinum Asset Management’s 13F portfolio for the second quarter for this analysis.
10 Best Stocks to Buy According to Billionaire Kerr Neilson
10. Westinghouse Air Brake Technologies Corporation (NYSE:WAB)
Platinum Asset Management’s Stake Value: $105 million
Percentage of Platinum Asset Management’s 13F Portfolio: 2.45%
Number of Hedge Fund Holders:46
Billionaire Kerr Neilson’s hedge fund has been bullish over the future fundamentals of Westinghouse Air Brake Technologies Corporation (NYSE:WAB), which was formed after the merger of the MotivePower Industries Corporation and Westinghouse Air Brake Company in 1999. Platinum Asset Management first initiated a position in Westinghouse Air Brake Technologies Corporation (NYSE:WAB) in 2019 and raised its existing stake by 41% in the second quarter of 2021 to 1.2 million shares.
9. The Mosaic Company (NYSE:MOS)
Platinum Asset Management’s Stake Value: $110 million
Percentage of Platinum Asset Management’s 13F Portfolio: 2.55%
Number of Hedge Fund Holders:43
Platinum Asset Management first initiated a position in The Mosaic Company (NYSE:MOS) during the first quarter of 2020 and added to its existing position in the second quarter. The firm’s strategy of initiating a position in The Mosaic Company (NYSE:MOS) has been working so far this year. Shares of The Mosaic Company (NYSE:MOS), which is ranked ninth in the list of 10 best stocks to buy according to billionaire Kerr Neilson, are up more than 76% since the beginning of this year.
Out of 873 elite funds tracked by Insider Monkey, 43 were bullish on The Mosaic Company (NYSE:MOS) at the end of the second quarter of 2021. Aubrey Capital Management and Platinum Asset Management were the largest stakeholders.
8. General Electric Company (NYSE:GE)
Platinum Asset Management’s Stake Value: $126 million
Percentage of Platinum Asset Management’s 13F Portfolio: 2.91%
Number of Hedge Fund Holders:67
General Electric Company (NYSE:GE), which is ranked eighth in the list of 10 best stocks to buy according to billionaire Kerr Neilson, is a member of Platinum Asset Management’s 13F portfolio since 2018. At the end of the second quarter, the firm held 1.17 million shares of General Electric Company (NYSE:GE).
However, some hedge funds have slashed their positions in General Electric Company during the second quarter to capitalize on share price gains.
7. Barrick Gold Corporation (NYSE:GOLD)
Platinum Asset Management’s Stake Value: $197 million
Percentage of Platinum Asset Management’s 13F Portfolio: 4.57%
Number of Hedge Fund Holders:47
Kerr Neilson’s hedge fund lifted its stake in Barrick Gold Corporation (NYSE:GOLD) during the second quarter to 9.55 million shares. Canada-based Barrick Gold Corporation (NYSE:GOLD) is engaged in the exploration, production, mine development of gold and copper properties.
Ariel Investments, an investment management firm, initiated a position in Barrick Gold Corporation (NYSE:GOLD) during the second quarter. Here is what Ariel Investments stated about Barrick Gold Corporation (NYSE:GOLD) in the second quarter investor letter:
“We re-initiated a position in Barrick Gold Corp. (GOLD) in the quarter. Its shares fell -5.56% from our initiation to the end of the quarter as the price of gold trended lower. Gold exceeded $2,000 per ounce in 2020 but has since declined to approximately $1,812 per ounce. Barrick’s shares have often traded at elevated PE multiples. However, at the current reduced stock price, it is trading at a PE multiple of only 16 times next year’s earnings, an attractive opportunity in our opinion, given our expectation of higher inflation and gold’s historic role as an inflationary hedge.”
6. Louisiana-Pacific Corporation (NYSE:LPX)
Platinum Asset Management’s Stake Value: $202 million
Percentage of Platinum Asset Management’s 13F Portfolio: 4.68%
Number of Hedge Fund Holders:39
In 2021, Louisiana-Pacific Corporation (NYSE:LPX) contributed strongly to Platinum Asset Management returns. Louisiana-Pacific Corporation (NYSE:LPX) shares have surged 68% since the beginning of this year, extending the twelve-month gain to over 100%.
5. Ally Financial Inc. (NASDAQ:ALLY)
Platinum Asset Management’s Stake Value: $202million
Percentage of Platinum Asset Management’s 13F Portfolio: 4.68%
Number of Hedge Fund Holders:54
Billionaire Kerr Neilson’s hedge fund has been holding a position in Ally Financial since the third quarter of 2017. Recently, Moody’s Investors Service highlighted their confidence in Ally Financial’s outlook amid improving capital liquidity position and growing net income to tangible assets.
4. Trip.com Group Limited (NASDAQ:TCOM)
Platinum Asset Management’s Stake Value: $272
Percentage of Platinum Asset Management’s 13F Portfolio: 6.29%
Number of Hedge Fund Holders:41
A travel service provider, Trip.com Group Limited (NASDAQ:TCOM) is the fourth largest stock holding of billionaire Kerr Neilson’s portfolio, according to the latest filings. Trip.com stock price has been struggling to generate positive share price returns for investors since the beginning of this year amid travel-related restrictions. On a positive side, coronavirus vaccine rollout has helped its domestic revenue to cross pre-COVID levels, with bookings up at a double-digit rate compared to 2019.
3. Microchip Technology Incorporated (NASDAQ:MCHP)
Platinum Asset Management’s Stake Value: $279million
Percentage of Platinum Asset Management’s 13F Portfolio: 6.57%
Number of Hedge Fund Holders:50
Microchip Technology Incorporated (NASDAQ:MCHP) is the long-running stock holding of billionaire Kerr Neilson’s Platinum Asset Management. The firm first initiated a position in the semiconductor company at the end of 2017.
2. Micron Technology, Inc. (NASDAQ:MU)
Platinum Asset Management’s Stake Value: $296 million
Percentage of Platinum Asset Management’s 13F Portfolio: 6.87%
Number of Hedge Fund Holders:87
Micron Technology, Inc. (NASDAQ:MU) is the second-largest stock holding of Platinum Investment Management. Following a stunning rally during the pandemic year, Micron shares underperformed this year due to short-term headwinds.
1. ZTO Express (Cayman) Inc. (NYSE:ZTO)
Platinum Asset Management’s Stake Value: $512 million
Percentage of Platinum Asset Management’s 13F Portfolio: 11.86%
Number of Hedge Fund Holders:21
Platinum Asset Management appears bullish over the future fundamentals of China-based industrial company ZTO Express (Cayman) Inc. (NYSE:ZTO). The firm lifted its existing position in ZTO by 41% during the second quarter.
Serenity Capital and Millennium Management also significantly increased their existing positions in the company. Overall, ZTO was in 21 hedge funds’ portfolios at the end of the second quarter of 2021 compared to 15 positions in the prior quarter.
You can also take a look at 10 Tech Stocks to Invest in Today According to Thomas E. Claugus’ GMT Capital and Girish Kumar’s TenCore Partners is Investing in These 10 Technology Stocks.
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Disclosure: None. 10 Best Stocks to Buy According to Billionaire Kerr Neilson is originally published on Insider Monkey.
