In this article, we will discuss the 10 best stocks to buy according to billionaire Steve Cohen.
Steven A. Cohen, born on June 11, 1956, is an American financier and hedge fund manager. Cohen is the founder and CEO of Point72 Asset Management.
According to Bloomberg, Cohen’s fund has failed to perform in 2021 so far partially because of his support and bet on Gabe Plotkin’s Melvin Capital, which suffered huge losses amid the meme stock saga and needed to be rescued by other funds, including Cohen’s. According to Bloomberg, Point72, whose 13F portfolio as of the first quarter of 2021 has a total value of $21.4 billion, returned just 1.2% in the first six months of 2021.
The 65-year-old billionaire’s stock picks still worth a look as Cohen has consistently outperformed the market for years and is known for his high-risk, high-reward bets. In 2020, Cohen’s Point72 Asset Management posted a 16% gain in 2020.
As of the end of the first quarter, Point72 Asset Management holds significant stakes in top tech companies, including Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Baidu, Inc. (NASDAQ: BIDU).
In Microsoft Corporation (NASDAQ: MSFT), Steve Cohen owns 596,055 shares. The investment covers 0.65% of the fund’s portfolio. Microsoft Corporation (NASDAQ: MSFT) currently has a $2.12 trillion market capitalization and was able to deliver a 38.54% return in the past 12 months. On June 2, KGI Securities initiated a coverage on Microsoft Corporation (NASDAQ: MSFT) with an “Outperform” rating and a price target of $300. Based on our calculations, Microsoft Corporation (NASDAQ: MSFT) ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds.
Another notable stock in Steve Cohen’s portfolio is Amazon.com, Inc. (NASDAQ: AMZN). The investor owns 79,978 shares in the company. Amazon is up 21.18% over the last 12 months. On April 5, Evercore ISI analyst Mark Mahaney initiated a coverage on Amazon with an “Outperform” rating and a price target of $4,000. In April Amazon.com, Inc. (NASDAQ: AMZN) posted earnings for the first quarter of 2021. It reported earnings per share of $15.79, beating market predictions by $6.18. The revenue for the first three months of 2021 was over $108.52 billion, beating the estimates by $3.89 billion. Amazon.com, Inc. (NASDAQ: AMZN) currently has a $1.86 trillion market capitalization.
Point72 Asset Management also holds 1.60 million shares in Baidu, Inc. (NASDAQ: BIDU) worth over $348 million. This represents 1.62% of their portfolio. Shares of the company rallied 49.16% in the last 12 months, resulting in a $65.65 billion market capitalization. The hedge fund’s stake in Baidu, Inc. (NASDAQ: BIDU) stock increased by 603% in the past few months, the latest data reveals. On July 13, KeyBanc analyst Hans Chung reiterated an “Overweight” rating and $332 price target on Baidu, Inc. (NASDAQ: BIDU). On June 17, Baidu (NASDAQ: BIDU) partnered with BAIC Group’s EV brand ARCFOX to jointly release Apollo Moon, a new generation of driverless cars that are to be priced at RMB 480,000 per unit.
While choosing stocks to invest in, you should perform detailed research amid the increasing volatility in the financial markets, which is making it harder for even the smart money to sustain profits. The hedge fund industry that once used to post sterling gains is also feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, 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 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s start our list of 10 best stocks to buy according to billionaire Steve Cohen. We used Cohen’s 13F portfolio for the first quarter for this analysis.
Best Stocks to Buy According to Billionaire Steve Cohen
10. Align Technology, Inc. (NASDAQ: ALGN)
Cohen’s Stake Value: $142,152,000
Percentage of Steve Cohen’s 13F Portfolio: 0.66%
Number of Hedge Fund Holders: 49
Align Technology, Inc. (NASDAQ: ALGN) is a manufacturer of 3D digital tracers and the Invisalign clear aligners used in orthodontics. It was founded in 1997 and ranks tenth on the list of 10 best stocks to buy according to billionaire Steve Cohen. Align Technology, Inc. (NASDAQ: ALGN) shares have gained about 92.89% over the last 12 months.
On July 9, Stephens analyst Chris Cooley upgraded Align Technology (NASDAQ: ALGN) from “Equal Weight” to “Overweight” with a price target of $700 from $600. On April 28, Align Technology, Inc. (NASDAQ: ALGN) posted earnings for the first quarter of 2021. It reported earnings per share of $2.49, beating market predictions by $0.48. The revenue for the first three months of 2021 was over $894.8 million, up 62.4% YoY, beating the estimates by $77.17 million.
Just like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Baidu, Inc. (NASDAQ: BIDU), Align Technology, Inc. (NASDAQ: ALGN) is one of the best stocks to buy according to billionaire Steve Cohen.
Point72 Asset Management holds 262,500 shares in Align Technology, Inc. (NASDAQ: ALGN) worth $142.15 million, representing 0.66% of its portfolio. Bares Capital Management, with 769,911 shares, is the biggest stakeholder in the company.
In its fourth quarter 2020 investor letter, Harding Loevner, an investment management firm, highlighted a few stocks, and Align Technology, Inc. (NASDAQ: ALGN) was one of them. Here is what the fund said:
“If you must head to one of the economy’s hot spots, perhaps look for soft wear rather than software. Align Technology was founded in 1997 in a Silicon Valley duplex with a singular vision: use technology to straighten teeth. Align pioneered computer-aided invisible orthodontics as an alternative to metal braces, and has now treated over 9 million patients with its Invisalign clear aligners. Align utilizes direct-to-consumer advertising to pull patients into participating dentists’ offices, equipping practitioners with real-time visualization and algorithm-assisted treatment planning to create and fit bespoke flexible plastic aligners. The company has been expanding its acceptance among practitioners for decades, but during the pandemic the numbers of those seeing the benefits of being able to treat patients with less chair time and fewer visits seems to have reached a tipping point. Like Disney, Align has also used the crisis to expand its digital marketing, reaching stay-at home teens and adults spending hours on Zoom, increasingly focused on how their teeth look on camera. As dental offices have reopened, Align’s earnings have benefitted from pent-up demand. It is emerging from the pandemic with a larger market share in orthodontics and a larger mind share with consumers.”
9. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX)
Cohen’s Stake Value: $142,681,000
Percentage of Steve Cohen’s 13F Portfolio: 0.66%
Number of Hedge Fund Holders: 68
Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) is an American biopharmaceutical company. It was founded in 1989, and the company stands ninth on the list of 10 best stocks to buy according to billionaire Steve Cohen. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) currently has a $51.23 billion market capitalization.
On June 18, Vertex Pharmaceuticals (NASDAQ: VRTX) declared that Health Canada has permitted Marketing Authorization for TRIKAFTA for the medication of certain patients with cystic fibrosis. On June 30, Raymond James analyst Danielle Brill initiated a coverage on Vertex (NASDAQ: VRTX) with a “Market Perform” rating.
Just like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Baidu, Inc. (NASDAQ: BIDU), Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) is one of the best stocks to buy according to billionaire Steve Cohen.
The hedge fund run by Steve Cohen owns 663,973 shares in the Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), worth $142.68 million, representing 0.66% of his investment portfolio. There were 68 hedge funds in our database that held stakes in Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) in the first quarter of 2021, compared to 53 funds a quarter earlier.
ClearBridge Investments, in their first quarter 2021 investor letter, mentioned Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX). Here is what the fund said:
“While equity participation has been broadening, not all sectors and industries have benefited. Health care, which represents the Strategy’s second largest overweight, has lagged in recent months but we believe positive vaccine development and upcoming clinical news for other therapeutics will eventually lead to greater recognition by investors. Vertex Pharmaceuticals, continues to expand its cystic fibrosis franchise globally while advancing multiple underappreciated pipeline assets.”
8. AstraZeneca PLC (NASDAQ: AZN)
Cohen’s Stake Value: $176,648,000
Percentage of Steve Cohen’s 13F Portfolio: 0.82%
Number of Hedge Fund Holders: 34
AstraZeneca PLC (NASDAQ: AZN) is a multinational pharmaceutical and biotechnology company. The company was founded in 1992, and it ranks eighth on the list of 10 best stocks to buy according to billionaire Steve Cohen. AstraZeneca PLC (NASDAQ: AZN) has returned 12.26% to investors in the last 3 months.
On July 14, AstraZeneca PLC’s (NASDAQ: AZN) scheduled $39 billion buyout of Alexion Pharmaceuticals (NASDAQ: ALXN) was approved by the U.K.’s Competition and Markets Authority. This merger will help boost AstraZeneca PLC (NASDAQ: AZN)’s line of rare disease drugs. On June 17, UBS analyst Michael Leuchten raised the firm’s price target on AstraZeneca to 9,200 GBp from 8,000 GBp and maintained a “Buy” rating on the shares.
Just like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Baidu, Inc. (NASDAQ: BIDU), AstraZeneca PLC (NASDAQ: AZN) is one of the best stocks to buy according to billionaire Steve Cohen. Point72 Asset Management holds 3.55 million shares in the firm worth over 176 million. This represents 0.82% of its portfolio.
Baron Health Care Fund, in their fourth-quarter 2020 investor letter, mentioned AstraZeneca PLC (NASDAQ: AZN). Here is what the fund said:
“AstraZeneca PLC is a multinational pharmaceutical company developing drugs across multiple therapeutic areas such as oncology and respiratory diseases. Shares were impacted by news of AstraZeneca’s joint development with Oxford University of a viral-based COVID-19 vaccine. Given a mixed data set due to an unforeseen error in dosing that occurred in the Brazilian market, the vaccine timelines slipped, hurting share performance. Our investment thesis on AstraZeneca is not dependent on COVID-19 but rather its best-in-class large-cap growth profile, and we retain conviction.”
7. Micron Technology, Inc. (NASDAQ: MU)
Cohen’s Stake Value: $185,318,000
Percentage of Steve Cohen’s 13F Portfolio: 0.86%
Number of Hedge Fund Holders: 100
Micron Technology, Inc. (NASDAQ: MU) is an American computer memory and computer data storage producer. Micron Technology, Inc. (NASDAQ: MU) was founded in 1978 and is placed seventh on the list of 10 best stocks to buy according to billionaire Steve Cohen. Micron Technology, Inc. (NASDAQ: MU) shares have gained about 55.49% in value over the last 12 months.
On June 30, Micron Technology, Inc. (NASDAQ: MU) posted earnings results for the third quarter of 2021. The earnings per share was $1.88, beating market predictions by $0.17. The revenue over the period was $7.42 billion, up 36.4% YoY, beating the estimates by $160 million. On June 30, BMO Capital analyst Ambrish Srivastava upgraded Micron Technology, Inc. (NASDAQ: MU) from “Market Perform” to “Outperform” with a price target of $110.00 from $90.
Just like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Baidu, Inc. (NASDAQ: BIDU), Micron Technology, Inc. (NASDAQ: MU) is one of the best stocks to buy according to billionaire Steve Cohen. The hedge fund managed by Steve Cohen owns more than 2 million shares in the company worth $185.32 million, representing 0.86% of their portfolio. In addition, Arrowstreet Capital owns 14.71 million shares of Micron Technology, Inc. (NASDAQ: MU), worth over $1 billion, topping the list of over 866 hedge funds tracked by Insider Monkey.
Bonsai Partners, in their first quarter 2021 investor letter, mentioned Micron Technology, Inc. (NASDAQ: MU). Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.
With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins…” (Click here to see the full text)
6. Twitter, Inc. (NYSE: TWTR)
Cohen’s Stake Value: $226,653,000
Percentage of Steve Cohen’s 13F Portfolio: 1.05%
Number of Hedge Fund Holders: 107
Twitter, Inc. (NYSE: TWTR) is an American microblogging and social networking service. The company was incorporated in 2006 and is ranked sixth on the list of 10 best stocks to buy according to billionaire Steve Cohen. The company’s shares have offered investors returns of 92.94% over the course of the past 12 months.
On June 9, Vertical Group analyst Phil Leggiere upgraded Twitter, Inc. (NYSE: TWTR) from “Positive” to “Very Positive.” On June 3, Twitter, Inc. (NYSE: TWTR) introduced ‘Blue’ subscription service at $2.99/month.
Just like Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Baidu, Inc. (NASDAQ: BIDU), Twitter, Inc. (NYSE: TWTR) is one of the best stocks to buy according to billionaire Steve Cohen. The hedge fund run by Steve Cohen owns 30,636 shares in the company. Point72 Asset Management increased its stake in the company by 7% in the first quarter, ending the period with $226.65 million shares of the company stock. Hedge fund sentiment increased for Twitter, Inc. (NYSE: TWTR). (NASDAQ: VIAC) at the end of the first quarter of 2021. Insider Monkey’s data shows that 107 elite hedge funds held stakes in the company at the end of the first quarter, up from 78 funds a quarter earlier.
ClearBridge Investments, in its first quarter 2021 investor letter, mentioned Twitter, Inc. (NYSE: TWTR). Here is what the fund has to say about Twitter in its letter:
“Media has been another bright spot for the Strategy, boosted by the return of live events and subsequent rebound in advertising as well as good initial traction for several of our companies new streaming services. Twitter was also a solid contributor on strong results and better-than-expected projections for future user and revenue growth.”
5. DXC Technology Company (NYSE: DXC)
Cohen’s Stake Value: $241,598,000
Percentage of Steve Cohen’s 13F Portfolio: 1.12%
Number of Hedge Fund Holders: 28
DXC Technology Company (NYSE: DXC) is an American multinational corporation that supplies business-to-business (B2B) information technology services. The company was founded in 1959 and stands fifth on the list of 10 best stocks to buy according to billionaire Steve Cohen. DXC shares have gained a whopping 135.95% over the last 12 months.
On June 2, Wells Fargo upgraded DXC Technology Company (NYSE: DXC) from “Equal Weight” to “Overweight” with a price target of $48.00 from $25. On May 26, DXC Technology Company (NYSE: DXC) posted earnings for the fourth quarter of 2021. It reported earnings per share of $0.74, beating market predictions by $0.04. In addition, the revenue for the fourth quarter of 2021 was $4.39 billion, beating the estimates by $100 million.
DXC Technology Company (NYSE: DXC) accounts for about 1.09% of Point72 Asset Management‘s portfolio, as the hedge fund owns a $235 million stake in the company. Steve Cohen’s hedge fund increased its stake in the DXC Technology Company (NYSE: DXC) by 148% in the first quarter. Chicago-based investment firm Harris Associates is a leading shareholder in DXC, with 10.81 million shares worth more than $337 million.
4. Facebook, Inc. (NASDAQ: FB)
Cohen’s Stake Value: $241,598,000
Percentage of Steve Cohen’s 13F Portfolio: 1.12%
Number of Hedge Fund Holders: 257
Facebook, Inc. (NASDAQ: FB) is an American multinational social-media company connecting people via mobile devices, personal computers, virtual reality headsets, and in-home devices. It was founded in 2004 and is ranked fourth on the list of 10 best stocks to buy according to billionaire Steve Cohen. Facebook currently has a $985.69 billion market capitalization and was able to deliver a 42.97% return in the past 12 months.
On July 15, Facebook, Inc. (NASDAQ: FB) announced plans to pay content creators a whopping $1 billion through 2022. This is part of the company’s plan to woo influencers and creators amid tough competition with TikTok, Snapchat and other social media platforms. On June 2, KGI Securities initiated a coverage on Facebook, Inc. (NASDAQ: FB) with an “Outperform” rating and a price target of $420.
At the end of the first quarter of 2021, Point72 Asset Management owned 820,283 shares in Facebook, Inc. (NASDAQ: FB) worth over $241 million. This represented 1.12% of the investment portfolio of Point72 Asset Management. There were 257 hedge funds in our database that held stakes in Facebook, Inc. (NASDAQ: FB) at the end of the first quarter of 2021, compared to 242 funds in the quarter earlier.
ClearBridge Investments, in their second quarter 2021 investor letter, mentioned Facebook, Inc. (NASDAQ: FB). Here is what the fund said:
“Facebook saw its antitrust case dismissed by the FTC in late June, an outcome that highlights the challenges regulators face in pursuing these cases. Investors are acutely aware of all the calls for change among the mega caps, but the legal framework around antitrust and privacy laws makes these difficult cases to win. For Facebook, we believe regulatory risk had been overpriced in the stock, while the potential probe into Apple and calls to open up its App Store to outside sellers could be a more material risk.”
3. Applied Materials, Inc. (NASDAQ: AMAT)
Cohen’s Stake Value: $255,171,000
Percentage of Steve Cohen’s 13F Portfolio: 1.19%
Number of Hedge Fund Holders: 78
Applied Materials, Inc. (NASDAQ: AMAT) provides manufacturing devices, services, and software to semiconductors and related industries. The company was founded in 1967, and it stands third on the list of 10 best stocks to buy according to billionaire Steve Cohen. Applied Materials shares have shown an impressive performance over the last 12 months, gaining 113.67% in value.
On June 10, Applied Materials, Inc. (NASDAQ: AMAT) announced a dividend of $0.24 per share, in line with the previous. On May 21, AMAT Susquehanna analyst Mehdi Hosseini raised the firm’s price target on Applied Materials, Inc. (NASDAQ: AMAT) to $170 from $155 and kept a “Positive” rating on the shares.
The hedge fund chaired by Steve Cohen holds 1.91 million shares in Applied Materials, Inc. (NASDAQ: AMAT) worth 255.17 million. The company is also getting the attention of the smart money, as 78 hedge funds tracked by Insider Monkey reported owning stakes in the company in the first quarter of 2021, up from 61 funds a quarter earlier.
2. Visa Inc. (NYSE: V)
Cohen’s Stake Value: $306,247,000
Percentage of Steve Cohen’s 13F Portfolio: 1.43%
Number of Hedge Fund Holders: 164
Visa Inc. (NYSE: V) is an American multinational financial services corporation. It was incorporated in 1958 and is ranked second on the list of 10 best stocks to buy according to billionaire Steve Cohen. Visa currently has a $524.65 billion market capitalization and was able to deliver a 27.75% return in the past 12 months.
On June 22, Visa Inc. (NYSE: V) and PayPal Holdings, Inc. (NASDAQ: PYPL) invested in Blockchain Capital’s $300 million fundraising. Visa Inc. stated that the association with Blockchain Capital will support Visa’s efforts to strengthen digital currencies’ role in the future. The company also announced that consumers spent above $1 billion of cryptocurrency internationally on goods and services via crypto-linked cards in the first half of 2021. On July 15, Evercore ISI analyst David Togut initiated a coverage on Visa Inc. (NYSE: V) with an “Outperform” rating and a price target of $286.
Point72 Asset Management holds more than 1.45 million shares in the firm worth over 306 million. This represents 1.42% of their portfolio.
ClearBridge Investments, in their first quarter 2021 investor letter, mentioned Visa Inc. (NYSE: V). Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
1. Western Digital Corporation (NASDAQ: WDC)
Cohen’s Stake Value: $360,964,000
Percentage of Steve Cohen’s 13F Portfolio: 1.68%
Number of Hedge Fund Holders: 58
Western Digital Corporation (NASDAQ: WDC) is a computer hard disk drive producer and data storage company. It was founded in 1970 and ranks first on the list of 10 best stocks to buy according to billionaire Steve Cohen. Western Digital shares have returned 52.60% to investors over the course of the past 12 months.
On June 14, Stifel analyst Patrick Ho raised the firm’s price target to $110 from $98 and kept a “Buy” rating on the shares. On April 29, Western Digital Corporation (NASDAQ: WDC) posted earnings for the third quarter of 2021. It reported earnings per share of $1.02, beating market predictions by $0.34. The revenue for the third quarter of 2021 was $4.14 billion, beating the estimates by $170 million.
As of the end of the first quarter, 58 hedge funds in Insider Monkey’s database of 866 funds held stakes in Western Digital Corporation (NASDAQ: WDC) compared to 44 funds in the quarter earlier. Cohen’s Point72 Asset Management is the company’s most significant stakeholder, with 5.41 million shares worth $360.96 million. The hedge fund increased its stake in the company by 1933% in the first quarter.
ClearBridge Investments, in its first quarter 2021 investor letter, mentioned Western Digital Corporation (NASDAQ: WDC). Here is what the fund has to say about Western Digital in its letter:
“Our high active share approach made the most difference in IT, where the portfolio’s holdings gained 4.5% compared to a loss for the benchmark. Results were led by our more cyclical positions in digital storage provider Western Digital.”
You can also take a peek at 10 Best Stocks to Buy According to Billionaire Brian Higgins and 10 Best Dividend Stocks to Buy According to Billionaire Michael Hintze
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Disclosure: None. 10 Best Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.
