In this article, we will discuss the 10 best stocks to buy according to John Paulson.
John Paulson is an American billionaire hedge fund manager who oversees Paulson & Co, a New York-based investment management fund. In 1980, Paulson received his Masters of Business Administration from Harvard Business School. Before forming Paulson & Co. in 1994, he worked at Boston Consulting Group, Odyssey Partners and Bear Stearns.
Paulson has been named as “one of the most eminent names in high finance.” He raked in tons of cash, adding up to $4 billion for himself and $15 billion for his fund, betting against the U.S. housing market in the global financial crisis more than a decade ago.
A notable company in John Paulson’s Q1 portfolio is Takeda Pharmaceutical Company Limited (NYSE: TAK). Takeda Pharmaceutical Company Limited currently has a $52.51 billion market capitalization. On July 20, Takeda Pharmaceutical Company Limited decided to provide an additional 50 million doses of Moderna, Inc. (NASDAQ: MRNA) COVID-19 vaccine to Japan. The extra doses will be supplied in the beginning of 2022. John Paulson’s Paulson & Co currently holds 4.73 million shares of Takeda Pharmaceutical Company Limited, which amounts to $86.32 million. Takeda occupies 1.98% of the hedge fund’s total portfolio.
The fund manager also has a significant stake in Exxon Mobil Corporation (NYSE: XOM), which explores and produces crude oil and natural gas. Exxon Mobil Corporation shares have returned 32.50% to investors over the course of the past 12 months. On July 23, Piper Sandler analyst Ryan Todd raised the price target on Exxon Mobil Corporation to $69 from $63 and maintained a “Neutral” rating.
Paulson & Co also has a stake in Barrick Gold Corporation (NYSE: GOLD), a mining company that delivers gold and copper with 16 operating sites in 13 countries. The company produced $1.04 million oz. of gold and 96 million pounds of copper in the second quarter. It is on path to achieve its FY 2021 production target.
At the end of the first quarter of 2021, Paulson & Co owned more than 3.55 million shares in Barrick Gold worth $70.23 million. This represented 1.61% of the investment portfolio of Paulson & Co. In addition, New York-based investment firm First Eagle Investment Management is a leading shareholder in Barrick Gold Corporation, with 27.01 million shares worth more than $534 million.
Why are we paying attention to Paulson’s stock picks? 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.
With this context in mind, here is our list of the 10 best stocks to buy according to John Paulson. We used Paulson’s 13F portfolio for the first quarter for this analysis.
Best Stocks to Buy According to John Paulson
10. Kirkland Lake Gold Ltd. (NYSE: KL)
Paulson’s Stake Value: $63,851,000
Percentage of John Paulson’s 13F Portfolio: 1.46%
Number of Hedge Fund Holders: 25
Kirkland Lake Gold Ltd. (NYSE: KL) is engaged in obtaining, manufacturing, and operating gold properties. It was founded in 1988 and is placed tenth on the list of 10 best stocks to buy according to John Paulson. Kirkland currently has a $10.61 billion market capitalization.
On June 17, Kirkland Lake Gold Ltd. declared a quarterly dividend of $0.1875 per share, in line with the previous. On May 20, National Bank analyst Mike Parkin raised the price target on Kirkland Lake Gold to C$57 from C$52 and maintained a “Sector Perform” rating on the shares.
At the end of the first quarter of 2021, Paulson & Co owned more than 1.50 million shares in Kirkland Lake Gold Ltd., worth $63.85 million. This represented 1.46% of the investment portfolio of Paulson & Co. In addition, as of the end of the first quarter of 2021, 25 hedge funds in Insider Monkey’s database held stakes in the company compared to 24 funds in the quarter earlier.
Just like Takeda Pharmaceutical Company Limited, Exxon Mobil Corporation, and Barrick Gold Corporation, Kirkland Lake Gold Ltd. is one of the best stocks to buy according to John Paulson.
9. Pacira BioSciences, Inc. (NASDAQ: PCRX)
Paulson’s Stake Value: $99,097,000
Percentage of John Paulson’s 13F Portfolio: 2.27%
Number of Hedge Fund Holders: 20
Pacira BioSciences, Inc. (NASDAQ: PCRX) is an American pharmaceutical company. It was incorporated in 2006 and ranks ninth on the list of 10 best stocks to buy according to John Paulson. Shares of the company rallied 11.66% in the last 12 months, resulting in a $2.59 billion market capitalization.
On July 26, JP Morgan analyst Christopher Neyor upgraded the stock to “Overweight” from “Neutral.” The firm raised the price target to $78 from $75.
At the end of the first quarter of 2021, Paulson & Co owned 1.41 million shares in Pacira BioSciences, Inc., worth over $99 million. This represented 2.27% of the investment portfolio of Paulson & Co. In addition, as of the end of the first quarter of 2021, 20 hedge funds in Insider Monkey’s database of 866 funds held stakes in Pacira, the same as in the previous quarter.
Just like Takeda Pharmaceutical Company Limited, Exxon Mobil Corporation, and Barrick Gold Corporation, Pacira BioSciences, Inc. is one of the best stocks to buy according to John Paulson.
8. DISH Network Corporation (NASDAQ: DISH)
Paulson’s Stake Value: $131,071,000
Percentage of John Paulson’s 13F Portfolio: 3.01%
Number of Hedge Fund Holders: 51
DISH Network Corporation (NASDAQ: DISH), with its subsidiaries, supplies pay-TV services in the United States. It was founded in 1980 and is placed eighth on the list of 10 best stocks to buy according to John Paulson. DISH shares have returned 28.89% to investors over the course of the past 12 months.
On July 19, DISH Network Corporation signed a long-term deal worth at least $5 billion to make AT&T Inc. the primary network services partner for its wireless customers. On July 7, HSBC analyst Sunil Rajgopal upgraded Dish to “Hold” from “Reduce” with a price target of $40.
The hedge fund managed by John Paulson owns 3.62 million shares in DISH Network Corporation worth over $131 million, representing 3.01% of their investment portfolio. Eagle Capital Management is the biggest stakeholder in the company, with 18.30 million shares worth $662.44 million.
Just like Takeda Pharmaceutical Company Limited, Exxon Mobil Corporation, and Barrick Gold Corporation, DISH Network Corporation is one of the best stocks to buy according to John Paulson.
In its second quarter 2021investor letter, ClearBridge Investments, an investment management firm, highlighted a few stocks, and DISH Network Corporation was one of them. Here is what the fund said:
“Portfolio holdings in the communication services and financials sectors also made strong contributions. Dish Network continues to make progress on the buildout of its greenfield 5G network, with Las Vegas slated to become the first market launched later this year. The company gained credibility, and its stock reacted favorably, after it announced a partnership with Amazon to deploy a 5G cloud-native network using AWS’s cloud infrastructure. While the stock has been volatile in recent quarters, we continue to feel confident in Dish’s long-term prospects, which include competing as a fourth U.S. wireless carrier. Charter Communications has been executing well and benefiting from the growth in residential broadband, which has been accelerated by COVID-19 and should see further support from the Biden Administration’s infrastructure bill, which earmarks $65 billion for broadband buildout. In addition, we expect the company to continue to grow its wireless business,
leveraging its mobile virtual network operator (MVNO) relationship with Verizon. The company continues to generate strong and growing free cash flow and deploys it toward consistent and material share buybacks.”
7. AngloGold Ashanti Limited (NYSE: AU)
Paulson’s Stake Value: $131,256,000
Percentage of John Paulson’s 13F Portfolio: 3.01%
Number of Hedge Fund Holders: 14
AngloGold Ashanti Limited (NYSE: AU) functions as a gold mining company. The company was founded in 1944 and stands seventh on the list of 10 best stocks to buy according to John Paulson. AngloGold currently has a market capitalization of $8 billion.
On July 13, AngloGold Ashanti Limited stated that it offered to acquire 80.5% of Corvus Gold Inc. (NASDAQ: KOR) shares for about $370 million. The combination will provide the company with a chance to establish a significant, low-priced, long-term production base in Nevada, a premier mining jurisdiction. On July 9, AU Investec analyst Herbert Kharivhe upgraded AngloGold Ashanti to “Hold” from “Sell” with a price target of ZAR 295.
Paulson & Co is a leading shareholder in AngloGold Ashanti Limited, with 5.97 million shares worth more than $131 million. Just like Takeda Pharmaceutical Company Limited, Exxon Mobil Corporation, and Barrick Gold Corporation, AngloGold Ashanti Limited is one of the best stocks to buy according to John Paulson.
6. Perpetua Resources Corp. (NASDAQ: PPTA)
Paulson’s Stake Value $159,949,000
Percentage of John Paulson’s 13F Portfolio: 3.67%
Number of Hedge Fund Holders: 3
Perpetua Resources Corp. (NASDAQ: PPTA) is an American mining company. The company was incorporated in 2011 and ranks sixth on the list of 10 best stocks to buy according to John Paulson. Perpetua has a market capitalization of $299 million.
On July 2, Wainwright analyst Heiko Ihle raised the firm’s price target on Perpetua Resources Corp. to $14.50 from $11.25 and reiterated a “Buy” rating on the shares after the company declared that the U.S. Forest Service is making progress with its reformed action in the National Environmental Policy Act process.
The stock is a new arrival on John Paulson’s portfolio, as his hedge fund bought about 20.94 million shares of Perpetua Resources Corp., worth $159.95 million. Just like Takeda Pharmaceutical Company Limited, Exxon Mobil Corporation, and Barrick Gold Corporation, Perpetua Resources Corp. is one of the best stocks to buy according to John Paulson.
5. Viatris Inc. (NASDAQ: VTRS)
Paulson’s Stake Value: $160,351,000
Percentage of John Paulson’s 13F Portfolio: 3.68%
Number of Hedge Fund Holders: 58
Viatris Inc. (NASDAQ: VTRS) is a global pharmaceutical company, which develops, licenses, produces, and trades brand and generic drugs. The company was founded in 1961 and is ranked fifth on the list of 10 best stocks to buy according to John Paulson. Viatris currently has a $16.82 billion market capitalization.
On June 15, Citi analyst Navann Ty initiated a coverage on Viatris Inc. with a “Neutral” rating and a price target of $16. On May 10, Viatris announced a quarterly dividend of $0.11 per share. The company also posted earnings for the first quarter of 2021. It reported earnings per share of $0.92, beating market predictions by $0.12. In addition, the revenue for the first three months of 2021 was $4.4 billion, up 69.9% YoY, beating the estimates by $200 million.
Paulson & Co holds 11.48 million shares in Viatris Inc., worth over $160 million, representing 3.68% of their portfolio.
Mittleman Brothers, in its first quarter 2021 investor letter, mentioned Viatris Inc.. Here is what the fund has to say about Viatris in its letter:
“Our other new position in Q1 (in addition to AMA Group) is Viatris (VTRS), which is the old stock of the generic drug manufacturer Mylan Labs after it merged with Pfizers’s Upjohn unit late last year, via a tax-efficient Reverse Morris Trust. VTRS’s current market capitalization of ~$17B is less than 6x its estimated FCF of $3B (before restructuring costs) estimated for 2022, and the current enterprise value of $40B is only 6.4x EBITDA of $6.25B. Consider that Mylan Labs stock (MYL, predecessor to VTRS) was nearly $67/share on a $40B buy-out offer from Teva in 2015. Mylan rejected that seemingly very reasonable bid. In merging with Pfizer’s spin-off of Upjohn, Viatris became an equal (in sales, about $17B for each company) to the largest player in generic pharmaceuticals globally, Teva, Mylan’s former suitor. Viatris is an orphan, but its pedigree is tarnished (the reputation of Mylan’s management in rejecting the Teva bid, and other mistakes, still lingers), even though the new CEO and CFO come from Pfizer, the Chairman and President from Mylan remain. Also, ETFs that owned Pfizer had to sell the VTRS shares that they received, which added considerable forced selling.”
4. Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN)
Paulson’s Stake Value: $214,074,000
Percentage of John Paulson’s 13F Portfolio: 4.91%
Number of Hedge Fund Holders: 77
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN), a subsidiary of AstraZeneca, is a pharmaceutical company. The company was incorporated in 1992 and stands fourth on the list of 10 best stocks to buy according to John Paulson. Alexion currently has a $40.34 billion market capitalization.
On July 6, AstraZeneca PLC (NASDAQ: AZN) obtained approval from the European Commission for its proposed acquisition of rare disease specialist Alexion Pharmaceuticals (NASDAQ: ALXN). The deal valued at $39 billion was previously cleared in the U.S., Japan, and several other countries. The main purpose of this acquisition is to create a pioneer in immunology and precision medicines. On May 5, AZN Oppenheimer analyst Hartaj Singh upgraded Alexion Pharmaceuticals to “Outperform” from “Perform” with a price target of $205.
Paulson & Co holds 1.4 million shares in Alexion Pharmaceuticals, Inc., worth over $214 million, representing 4.91% of their portfolio. In addition, there were 77 hedge funds in our database that held stakes in Alexion Pharmaceuticals at the end of the first quarter of 2021, the same as in the third quarter.
ClearBridge Investments, in their first quarter 2021 investor letter, mentioned Alexion Pharmaceuticals, Inc.. Here is what the fund said:
“We also sold biotechnology holding Alexion Pharmaceuticals ahead of its acquisition by AstraZeneca but expect to redouble our efforts in health care through the rest of the year. We see good growth potential in the sector and after full due diligence, have been busy populating our wish list with new names we would like to own.”
3. BrightSphere Investment Group Inc. (NYSE: BSIG)
Paulson’s Stake Value: $407,611,000
Percentage of John Paulson’s 13F Portfolio: 9.36%
Number of Hedge Fund Holders: 26
BrightSphere Investment Group Inc. (NYSE: BSIG) operates as an asset management firm. It was founded in 1980 and stands third on the list of 10 best stocks to buy according to John Paulson. John Paulson’s bet on BrightSphere is paying off. The company shares are up 74.15% over the last 12 months.
On June 10, BrightSphere published that it signed an agreement to sell its 75.1% ownership interest in Thompson, Siegel Walmsley, or TSW to Pendal Group for $240 million. On April 29, BrightSphere Investment Group Inc. declared a quarterly dividend of $0.01 per share, in line with the previous. On April 9, BofA analyst Michael Carrier upgraded BrightSphere Investment Group to “Buy” from “Neutral” with a price target of $27, up from $22. Paulson & Co owns more than 20 million shares of the company, worth $407.61 million.
Third Avenue Management, in its second quarter 2021 investor letter, mentioned BrightSphere Investment Group Inc.. Here is what Third Avenue Management has to say about BrightSphere in its letter:
“The time-arbitrage/special-situations bucket predominantly comprises other out-of-favor, misunderstood companies such as BrightSphere. This company is cyclical and currently out of favor, but given its strong financial positions, Fund Management believes they have the luxury of time and capital to invest and grow until the clouds dissipate.”
2. Horizon Therapeutics Public Limited Company (NASDAQ: HZNP)
Paulson’s Stake Value: $735,532,000
Percentage of John Paulson’s 13F Portfolio: 16.89%
Number of Hedge Fund Holders: 48
Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) is a biotechnology company that emphasizes the discovery, development, and commercialization of medicines to cure autoimmune and severe inflammatory diseases. The company was founded in 2005 and ranks second on the list of 10 best stocks to buy according to John Paulson. Shares of Horizon rallied 68.57% in the last 12 months.
On July 16, Piper Sandler analyst David Amsellem initiated a coverage on Horizon Therapeutics Public Limited Company with an “Overweight” rating and price target of $125.
Horizon Therapeutics Public Limited Company is another large-cap stock in Paulson & Co’s portfolio, in which the fund owns 7.99 million shares worth $735.53 million. Kurt Von Emster’s VenBio Select Advisor is the most significant stakeholder, with 9 million shares worth $828.36 million.
Carillon Tower Advisers, in their first quarter 2021 investor letter, mentioned Horizon Therapeutics Public Limited Company. Here is what the fund said:
“Horizon Therapeutics is a biopharmaceutical company whose primary focus is research, development, and marketing of late-stage pharmaceutical products. After experiencing some unfortunate manufacturing hiccups in the later stages of 2020 for its key product Tepezza, which is used in the treatment of thyroid eye disease, the company recently received positive news that should relieve their supply issues going forward. With manufacturing of Tepezza back online after being forced to halt due to Operation Warp Speed’s COVID-19 vaccine production orders, Horizon expects patient treatments to resume in mid-April.”
1. Bausch Health Companies Inc. (NYSE: BHC)
Paulson’s Stake Value: $820,131,000
Percentage of John Paulson’s 13F Portfolio: 18.83%
Number of Hedge Fund Holders: 42
Bausch Health Companies Inc. (NYSE: BHC) is a multinational specialty pharmaceutical company. The company was founded in 1959 and stands first on the list of 10 best stocks to buy according to John Paulson. Bausch shares have returned 52.13% to investors during the course of the past 12 months resulting in a $12.9 billion market capitalization.
On July 7, Bausch + Lomb, the global eye health business of Bausch Health, declared that it finished registration in its final study of NOV03 in treating patients with dry eye disease. On July 6, Spin-Off Research initiated a coverage on Bausch Health Companies Inc. with a “Buy” rating and price target of $35. On May 25, the company announced that it issued 4.875% senior secured notes due 2028, whose principal amount is $1.6 billion. The proceeds will be used for fund redemption of outstanding Notes due 2024.
The hedge fund chaired by John Paulson holds 25.84 million shares in the company worth over $820 million. Out of the hedge funds being tracked by Insider Monkey, Icahn Capital LP is a leading shareholder in Bausch Health Companies Inc., with 34.11 million shares worth more than $1billion. Paulson is the second largest stakeholder after Icahn.
Miller Value Partners, in their first quarter 2021 investor letter, mentioned Bausch Health Companies Inc.. Here is what the fund said:
“Bausch Health Companies (BHC) climbed 55% during the period. Glenview (6% owner) sent a letter to the company in early February arguing the company has not acted to unlock shareholder value and urging the company to sell its eye care business. Shortly after, activist investor Carl Icahn disclosing a 7.83% stake in the company. The company responded to the filing saying that they remain committed to splitting the business into two parts, but are open to pursuing all opportunities. The company reported strong 4Q results with better-than-expected 2021 guidance. 4Q revenue came in at $2,213M slightly ahead of consensus of $2,165M and EPS of $1.34 beat consensus of $1.12. The company guided for 2021 revenue of $8.6-8.8B coming in ahead of expectations of $8.55B with EBITDA of $3.4-3.55B ahead of $3.46B estimated. The company announced the transition of Paul Herendeen to an advisory role to be succeeded by Sam Eldessouky, previously senior vice president, controller and chief accounting officer. Finally, the company announced the sale of Amoun Pharmaceutical for $740M, which was relatively in line with estimates and should help support debt reduction targets ahead of the planned spin-off of Bausch + Lomb eye care business.”
You can also take a peek at 10 Best Stocks to Buy According to Chris James’ Engine No. 1 and 10 Best Stocks to Invest Your $1000
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originally published on Insider Monkey.
