10 Best Stocks to Buy Now According to Billionaire Chris Rokos

Published on September 20, 2022 at 9:12 am by Umar Farooq in Hedge Fund Analysis, Hedge Funds, News

In this article, we will be taking a look at some of the top stocks in the portfolio of billionaire Chris Rokos.

Christopher Rokos, the CEO & founder of Rokos Capital Management, has a net worth of $1.5 billion as of September 2022, according to Forbes. Rokos is a macro investor who deals in commodities, currencies, interest rates, and equities. Rokos established his London-based firm Rokos Capital Management in 2015, which currently manages about $12 billion and has more than 200 employees. Rokos, a founding partner of Brevan Howard Asset Management, parted ways with his colleague Alan Howard after a disagreement. He was one of the most vocal participants in Brevan’s morning investment meetings. A January report from Financial Times cited an individual acquainted with his thinking, who said Rokos promoted a strict approach to fund management, claiming that unsuccessful traders should be promptly removed and that the first year of a trader’s employment should be treated as a job interview. According to the report, Rokos is one of the world’s most adept managers at managing very sizable debt and option holdings. The FT source said: “When he gets it right, he gets it really, really right”.

Rokos Capital’s Portfolio

Rokos Capital Management LLP manages $138.426 billion in discretionary assets. Their most recent 13F filing for Q2 2022 showed managed 13F securities valued at $3.413 billion with a top 10 holdings concentration of 60.71%. With 1.597 million shares held, Invesco QQQ Trust, Series 1 is the largest holding of Rokos Capital Management LLP. During Q2, 2022, the fund made a portfolio rebalance by selling 26 stocks and acquiring 30 new stocks. The fund also decreased its holdings in 11 equities while increasing its purchases in 16 of them. The information technology sector comprises 32.86% of the fund’s 13F portfolio.

Photo by Chris Liverani on Unsplash

Our Methodology

Below is a list of the 10 best stocks to buy according to billionaire Chris Rokos. The equities were chosen from the hedge fund’s second-quarter regulatory filings. To help our readers assess each stock’s appeal to seasoned hedge funds, we’ve supplied hedge fund sentiment using Insider Monkey’s database of 895 elite hedge funds.

These are the top ten stock picks from Rokos’s latest portfolio.

Best Stocks to Buy Now According to Billionaire Chris Rokos

10. salesforce.com, inc. (NYSE:CRM)

Rokos Capital Management’s Stake Value: $30.797 million

Rokos Capital Management’s 13F Portfolio: 0.9%

Number of Hedge Fund Holders: 116

On September 2, Salesforce, Inc. (NYSE:CRM) was upgraded by Guggenheim analyst John DiFucci from Sell to Neutral with a $150 price target, saying that the company has been down 20% since he started following it on August 11, while the S&P 500 has fallen 7% during that time.

In its Q1 2022 investor letter, Vulcan Value Partners mentioned Salesforce, Inc. (NYSE:CRM) and explained its insights for the company. Here is what the fund said:

“Salesforce.com Inc. is the dominant provider of customer relationship management software and technology. Salesforce has high retention rates, pricing power, high free cash flow, and a competitive moat. The company continues to execute well. Margins decreased slightly during the fourth quarter but continue to be on path for material expansion over the long term. Salesforce is seeing increased spending as employees are returning to the office, and we believe the global pandemic has only improved its prospects.”

09. ASML Holding N.V. (NASDAQ:ASML)

Rokos Capital Management’s Stake Value: $34.453 million

Rokos Capital Management’s 13F Portfolio: 1%

Number of Hedge Fund Holders: 47

ASML Holding N.V. (NASDAQ:ASML) was established in 1984 and has its headquarters located in Veldhoven, the Netherlands. For memory and logic chip manufacturers, ASML Holding N.V. develops, produces, promotes, sells, and services sophisticated semiconductor equipment solutions that include lithography, metrology, and inspection-related systems. Rokos Capital Management started investing in ASML during the previous quarter. It currently holds 72,783 shares of ASML worth roughly $34.453 million.

ASML Holding N.V. (NASDAQ:ASML) is one of the most competitive manufacturers of machinery and equipment for the semiconductor industry. The business is a market leader in photolithography equipment used to imprint circuitry layouts onto silicon wafers. ASML Holding N.V. (NASDAQ:ASML) has maintained a net profit margin of about 30% while growing revenues at a rate greater than 20% CAGR throughout the recent years. However, as the focus moved from growth to value, ASML is down more than 40% year to date.

Francois-Xavier Bouvignies, an analyst with UBS, is bullish on ASML. On August 31, the analyst raised his rating from Neutral to Buy and price target from EUR 630 to EUR 665 for ASML, respectively. In the current unsteady macro climate, ASML is one of the “most desirable names,” according to Bouvignies’ research letter to investors. Given the company’s great visibility and pricing power, the analyst thinks there is little room for the shares to fall.

08. Denbury Resources Inc. (NYSE:DEN)

Rokos Capital Management’s Stake Value: $35.619 million

Rokos Capital Management’s 13F Portfolio: 1.04%

Number of Hedge Fund Holders: 31

Founded in 2003, Denbury Resources Inc. (NYSE:DEN) has its corporate headquarters in Plano, Texas. Being an independent energy business, Denbury Inc. specializes in oil production from established oil fields in the Gulf Coast and Rocky Mountain regions.

According to the latest quarter’s earnings report released on August 4, Denbury Resources Inc. (NYSE:DEN) reported an EPS GAAP actual of $2.83 and revenue of $482.16 million, both above the market consensus. Considering the company’s Q2 earnings release “somewhat favorable,” Stifel analyst Michael Scialla increased his price target on Denbury Resources Inc. (NYSE:DEN) to $132 from $126 and maintained a Buy rating on the shares. Scialla informs investors that although he expects the capex projection increase to fully offset the Q2 beat and the favorable return of capital, he expects the stock to continue to rise if the Inflation Reduction Act is passed.

07. Alphabet Inc. (NASDAQ:GOOG)

Rokos Capital Management’s Stake Value: $39.582 million

Rokos Capital Management’s 13F Portfolio: 1.15%

Number of Hedge Fund Holders: 153

During Q2, Rokos Capital Management reduced its stake in Alphabet Inc. (NASDAQ:GOOG) by 21%, holding 18,127 of its shares, worth roughly $39.582 million. Google’s main advertising business gained just 11.6% year over year during the three months ended June 30, in contrast to the roughly 69% growth it reported during the same period last year. In July of this year, Alphabet Inc. (NASDAQ:GOOG) published its financial results for the second quarter of 2022. For the three months ending June 30, 2022, its sales climbed by 13% year over year to reach $69.7 billion, but its net income fell by 16% year over year to $16 billion. It announced EPS of $1.21, $0.08 below the expectations.

In an uncertain economic climate made worse by a slowdown in ad expenditure, Alphabet and Google CEO Sundar Pichai is hinting at potential job cuts.

In its Q2 2022 investor letter, Baron Durable Advantage Fund mentioned Alphabet Inc. (NASDAQ:GOOG) and explained its insights for the company. Here is what the fund said:

“Alphabet Inc. is the parent company of Google, the world’s largest search and online advertising company. Shares of Alphabet declined 21.6% in the quarter due to concerns about slower global growth impacting the company’s core advertising business. We retain conviction in Alphabet’s merits as it continues to benefit from growth in mobile and online video advertising, which accrues to its core assets of search, YouTube, and the Google ad network. We are further encouraged by Alphabet’s investments in Cloud, AI, and Autonomous Driving (through its Waymo subsidiary).”

06. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Rokos Capital Management’s Stake Value: $41.068 million

Rokos Capital Management’s 13F Portfolio: 1.2%

Number of Hedge Fund Holders: 87

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. Advanced Micro Devices, Inc. (NASDAQ:AMD) was incorporated in 1969 and is headquartered in Santa Clara, California. Although Advanced Micro Devices, Inc. (NASDAQ:AMD)’s Q2 2022 earnings and FY 2022 forecast were satisfactory, its recent share price performance has been negatively impacted by the sluggish semiconductor industry conditions. In July 2022, global semiconductor sales dropped by 2.3% MoM. Hedge funds are still bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD), as it has just touched the peak of its popularity during Q2 among the hedge funds tracked by Insider Monkey. A total of 87 hedge funds are holding a stake in Advanced Micro Devices, Inc. (NASDAQ:AMD) as compared to 83 in the previous quarter.

On September 7, with a Buy rating and a $122 price target, Stifel analyst Ruben Roy began covering Advanced Micro Devices, Inc. (NASDAQ:AMD), praising its “strong product roadmap” and ongoing advantage against Intel (INTC). According to Roy, the current value “appears acceptable,” especially in comparison to other product cycle businesses like Nvidia (NVDA).

05. Southwestern Energy Company (NYSE:SWN)

Rokos Capital Management’s Stake Value: $47.739 million

Rokos Capital Management’s 13F Portfolio: 1.39%

Number of Hedge Fund Holders: 47

The Southwestern Energy Company (NYSE:SWN) was established in 1929 and has its corporate headquarters in Spring, Texas. It is an independent energy company that operates in the United States and is involved in the exploration, development, and production of natural gas, oil, and natural gas liquids (NGLs).

For Q2, a total of 47 hedge funds are bullish on Southwestern Energy Company (NYSE:SWN) as compared to 35 in the previous quarter.

Rokos Capital Management initiated a stake in Southwestern Energy Company (NYSE:SWN) during the most recent quarter by acquiring 7.3 million of its shares, valued at $47.7 million. In its Q1 2022 investor letter, Greenlight Capital mentioned Southwestern Energy Company (NYSE:SWN) and explained its insights for the company. Here is what the fund said:

“SWN is the second largest producer of natural gas in the U.S. The company is well-situated to satisfy growing domestic and export demand. Over the short, medium and long term, Europe now intends to reduce its reliance on Russian energy and increase its use of U.S. LNG. Based on its 2021 year-end reserves – which assumed a $3.60/MMBtu long-term natural gas price – SWN has a PV-104 value of $13.83 per share. By the end of the first quarter, the U.S. natural gas 5-year forward curve averaged $4.28/MMBtu, while international seaborne LNG was close to $20/MMBtu. Over the intermediate term, with the benefit of substantial global investment in infrastructure, we expect prices for U.S. and international natural gas to converge. We acquired our shares at an average price of $6.58. SWN shares ended the quarter at $7.17.”

04. Microsoft Corporation (NASDAQ:MSFT)

Rokos Capital Management’s Stake Value: $68.183 million

Rokos Capital Management’s 13F Portfolio: 1.99%

Number of Hedge Fund Holders: 258

Founded in 1975, Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based multinational technology corporation with a $1.97 trillion market capitalization. During Q2, Rokos reduced his stake in MSFT by 34%, holding 265,534 of its shares worth roughly $68.183 million.

In its Q2 2022 investor letter, Baron Durable Advantage Fund mentioned Microsoft Corporation (NASDAQ:MSFT) and explained its insights for the company. Here is what the fund said:

“Shares of Microsoft Corporation, a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues.

As discussed above, we continue to believe Microsoft remains a durable and growing business as companies across all industries look to digitally transform, taking advantage of the continuously expanding solution set Microsoft has to offer.”

03. Apple Inc. (NASDAQ:AAPL)

Rokos Capital Management’s Stake Value: $69.381 million

Rokos Capital Management’s 13F Portfolio: 2.03%

Number of Hedge Fund Holders: 128

Warren Buffett’s Berkshire Hathaway is the largest shareholder of Apple Inc. (NASDAQ:AAPL), holding around 895 million of its shares worth roughly $122 billion. Rokos Capital is holding 512,103 shares of Apple Inc. (NASDAQ:AAPL), valued at $69 million.

On September 8, Morgan Stanley analyst Erik Woodring maintained an Overweight rating and a $180 price target on Apple Inc. (NASDAQ:AAPL) shares.

In the second quarter investor letter, Alger Capital discussed Apple Inc. (NASDAQ:AAPL). Here is what Alger Capital specifically said about Apple:

“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact production of apple products, however the manufacturing facilities have resumed activity.”

02. Bank of America Corporation (NYSE:BAC)

Rokos Capital Management’s Stake Value: $130.303 million

Rokos Capital Management’s 13F Portfolio: 3.81%

Number of Hedge Fund Holders: 99

Bank of America Corporation (NYSE:BAC), a financial services firm based in Charlotte, North Carolina, was established in 1998 and has a $283.4 billion market capitalization. It’s a new addition to the Rokos 13F portfolio as the fund has acquired 4.19 million shares of Bank of America Corporation (NYSE:BAC) during Q2, worth roughly $130.303 million.

On September 12, analyst Matt O’Connor with Deutsche Bank cut his price target for Bank of America Corporation (NYSE:BAC) from $51 to $45 while maintaining a Buy rating on the shares. O’Connor informs investors in a research note that although there has been some reprieve in recent weeks, the banks have underperformed this year mostly due to recession fears. According to the analyst, banks are down approximately 25% since their January highs and are pricing in a 55%–60% likelihood of a moderate–to–severe recession.

In its Q2 2022 investor letter, ClearBridge Dividend Strategy mentioned Bank of America Corporation (NYSE:BAC) and explained its insights for the company. Here is what ClearBridge Dividend Strategy has to say about Bank of America Corporation (NYSE:BAC):

“In the second quarter we made a sizable add to our position in Bank of America (NYSE:BAC) as our bank holdings have significant leverage to rising interest rates. The Fed, unfortunately, was late to realize inflation’s magnitude, maintaining for far too long that inflationary pressures were merely transitory. This mistake caused inflation to accelerate, necessitating a larger intervention than if the Fed had moved sooner.”

01. EQT Corporation (NYSE:EQT)

Rokos Capital Management’s Stake Value: $130.964 million

Rokos Capital Management’s 13F Portfolio: 3.83%

Number of Hedge Fund Holders: 52

EQT Corporation (NYSE:EQT) operates as a natural gas production company in the United States. The company was founded in 1878 and is headquartered in Pittsburgh, Pennsylvania. On July 27, EQT Corporation (NYSE:EQT) posted strong Q2 results, reporting an EPS GAAP actual of $0.83 and actual revenue of $2.53 billion, both above Wall Street expectations. The stock has gained 153% in value in the past twelve months.

The number of hedge funds holding a stake in EQT Corporation (NYSE:EQT) as of the end of the second quarter remained unchanged from the previous quarter as a total of 52 hedge funds have disclosed a stake in the company.

On August 18, EQT Corporation (NYSE:EQT) price target was increased from $55 to $59 by Mizuho analyst Vincent Lovaglio, who maintains a Buy rating on the stock.

In its Q2 2022 investor letter, ClearBridge Mid Cap Growth Strategy Fund mentioned EQT Corporation (NYSE:EQT) and explained its insights for the company. Here is what the fund said:

“We initiated a position in EQT (NYSE:EQT), the largest natural gas producer in the U.S., which possesses high-quality acreage within the Marcellus Shale basin. EQT has benefited from tight supply and demand dynamics as cleaner-burning natural gas takes global share from coal and exports to Europe and Asia provide an avenue of demand growth. Longer-term contracts enhance EQT’s earnings visibility as Europe eliminates its dependence on Russian gas.”

You can also take a peek at 10 Stocks to Buy According to Kevin McCarthy’s Breakline Capital and 10 Stocks to Buy According to Mark McMeans’ Brasada Capital Management.

Follow Insider Monkey on Twitter