In this article, we talk about the 10 best stocks to buy now according to billionaire Steve Cohen.
Steve Cohen is the man behind Point72 Asset Management, a Connecticut-based hedge fund with $25.18 billion of assets under management (AUM) as of March 2022. Worth nearly $12 billion, Cohen made most of his wealth as the founder and boss of now-closed SAC Capital, which averaged annual returns of 25% from 1993 to 2013. Prior to founding SAC Capital with $25 million of his own money in 1993, Cohen worked as a trader for boutique investment bank Gruntal & Co., where his stock market exploits earned him a glaring reputation and significant wealth. He would go on to head a trading group at the firm, manage a $75 million portfolio, and make his company around $100,000 a day.
Steve Cohen is the majority stakeholder of the New York Mets baseball team, and boasts one of the largest private art collections in the world, valued at roughly $1 billion. The New York resident attended University of Pennsylvania’s Wharton School of Business, graduating with a degree in Economics in 1978.
Cohen’s investing genius and wealth story has inspired the lead character of hit TV show Billions named Bobby Axelrod, a hot-shot money-manager stuck in a vicious legal battle with a ruthless and hardworking district attorney. This runs as a parallel to Cohen’s altercations with the SEC, where he eventually settled on a deal which saw him escape prosecution and earn a two-year ban from managing investors’ money.
In 2021, Steve Cohen invested $750 million into Gabe Plotkin’s Melvin Capital, after it lost nearly $7 billion during a tense stand-off with retail investors amid the GameStop short-squeeze frenzy. Plotkin was an employee of Cohen’s at SAC Capital, and the former had earned the latter’s praise on many occasions. In March, Bloomberg reported that Cohen was redeeming the $750 million it had invested to save Melvin Capital from bankruptcy.
As of the first quarter of 2022, Point72 Asset Management owned positions in leading stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Merck & Co., Inc. (NYSE:MRK) and Visa Inc. (NYSE:V), among others. The hedge fund initiated 440 new positions, made additional purchases in 301 stocks, sold out of 360 and reduced holdings in 321 stocks. The fund’s portfolio consists of stocks primarily from the Healthcare, Financials, Services, Technology, Basic Materials, and Others sectors. The top 10 holdings accounted for 11.42% of the overall portfolio.
Our Methodology
Best Stocks To Buy Now According To Billionaire Steve Cohen
10. Seagen Inc. (NASDAQ:SGEN)
Point72 Asset Management’s Stake Value: $200.69 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 49
Seagen Inc. (NASDAQ:SGEN) is an American biotechnology company which specializes in antibody-based drug therapies for the treatment of cancer. Among the hedge funds tracked by Insider Monkey at the end of March, 49 reported ownership of positions in SGEN with combined stakes worth $8.36 billion. This shows a positive trend from the previous quarter where 46 hedge funds were stakeholders in the company.
On July 5, Seagen Inc. (NASDAQ:SGEN) reported that its Tukysa (tucatinib) drug combo for metastatic colorectal cancer showed meaningful anti-tumor activity during a mid-stage trial. As of July 6, the company shares have recorded a 16.96% surge in the last 12 months, and 21.85% in the last 6 months.
At the end of June, Raymond James analyst Dane Leone initiated coverage of Seagen Inc. (NASDAQ:SGEN) with an ‘Outperform’ rating and a $220 price target, noting that the company could be a “high-interest candidate” for acquisition by a number of large biopharmaceutical firms, with Merck (NYSE:MRK) as a viable bidder. He cited the company’s growing commercial portfolio, general increased interest in the antibody drug conjugates (ADC) modality, and “significant optionality” of label expansion for its key programs.
Along with big-names such as Amazon.com, Inc. (NASDAQ:AMZN), Merck & Co., Inc. (NYSE:MRK) and Visa Inc. (NYSE:V), Seagen Inc. (NASDAQ:SGEN) is an exciting stock in billionaire Steve Cohen’s 2022 portfolio.
9. S&P Global Inc. (NYSE:SPGI)
Point72 Asset Management’s Stake Value: $201.44 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 97
S&P Global Inc. (NYSE:SPGI) is a credit ratings agency headquartered in New York. It recently declared a $0.85 per share quarterly dividend, with a yield of 0.97% as of July 6.
On June 3, Barclays analyst Manav Patnaik lowered the firm’s price target on S&P Global Inc. (NYSE:SPGI) to $385 from $450 and maintained an ‘Overweight’ rating on the company shares. The company suspended its FY22 guidance due to the broader market volatility and a weakness in global issuance, and the analyst has cut price targets for both S&P Global and peer Moody’s. However, Deutsche Bank analyst Faiza Alwy sees this period as “transitory and a unique buying opportunity” for long-term investors, and maintained a ‘Buy’ rating on S&P Global Inc. (NYSE:SPGI) shares with a $418 price target, down from $483.
Out of all the hedge funds tracked by Insider Monkey, 97 held stakes in S&P Global Inc. (NYSE:SPGI) at the end of the first quarter, showing vastly improving investor confidence over the previous quarter where 79 hedge funds were long on the company shares. TCI Fund Management held a massive $2.79 billion stake in S&P Global Inc. (NYSE:SPGI) at the end of Q1 2022, making it the firm’s largest shareholder.
Cooper Investors, an investment management firm, had this to say about S&P Global Inc. (NYSE:SPGI) in its Q1 2022 investor letter:
“This quarter, S&P Global announced the successful completion of its acquisition of IHS Markit. The deal makes S&P a global leader across the information services industry. The Fund has been long term shareholders of S&P, building a position back in 2015 when the organisation was still named McGraw-Hill Financial. We saw the initial opportunity as it refocused the business from a publishing and financial conglomerate towards its core data and financial assets. S&P’s credit ratings, benchmarks and analytics businesses in global capital and commodity markets carry leading positions, defensible offerings, consistent growth and high margins – as true today as it was seven years ago. With the increased focus management have applied over a lengthy period we see improved revenue growth, margins and cash flows…” (Click here to see the full text)
8. Visa Inc. (NYSE:V)
Point72 Asset Management’s Stake Value: $205.59 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.81%
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is a digital payments technology company. It was given an unchanged ‘Neutral’ rating by Mizuho analyst Dan Dolev on July 1, who noted that payment vendors such as Visa and Mastercard are “yet to meaningfully correct” after travel-related stocks and online visits to travel sites, both of which serve as benchmarks for booking strength, have weakened.
Point72 Asset Management owned 927,000 shares of Visa Inc. (NYSE:V) during the first quarter worth $205.6 million, representing a massive 296% hike from the quarter before where the fund owned 234,000 shares of the company
Overall, the company remained a popular stock among hedge funds, with a total of 159 bullish hedge fund bets reported at the end of the first quarter, up from 142 hedge funds in the preceding quarter. Chris Hohn’s TCI Fund Management was the top Q1 shareholder of Visa Inc. (NYSE:V) with a huge $4.41 billion stake. Fisher Asset Management and Berkshire Hathaway also held multi-billion dollar stakes in the firm.
In its Q1 2022 investor letter, investment firm Polen Capital talked about the market position and prospects of Visa Inc. (NYSE:V). Here is what was said:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
7. Arista Networks, Inc. (NYSE:ANET)
Point72 Asset Management’s Stake Value: $230.39 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.91%
Number of Hedge Fund Holders: 41
Arista Networks, Inc. (NYSE:ANET) is a California-based company which provides cloud networking solutions around the world. Steve Cohen’s portfolio for the first quarter contained 1.65 million ANET shares, priced at roughly $230 million and representing 0.91% of his overall holdings.
On May 3, Cowen analyst Paul Silverstein raised the firm’s price target on Arista Networks, Inc. (NYSE:ANET) to $154 from $151 and reiterated an ‘Outperform’ rating on the shares. The analyst noted that revenue and demand is tracking quite ahead of expectations even within an adverse supply chain environment, and earnings would be even higher if not for the cost impact of supply chain constraints.
Evercore ISI analyst Amit Daryanani also gave Arista Networks, Inc. (NYSE:ANET) an ‘Outperform’ rating, along with a $160 target and removed his ‘Tactical Outperform’ call on the shares. Daryanani sees ANET as well-positioned to sustain more than 30% growth in revenue on a multiyear basis, and notes that the company is better shielded from supply chain issues in comparison to peers.
41 hedge funds were long Arista Networks, Inc. (NYSE:ANET) at the end of the first quarter, up from 38 hedge funds a quarter earlier. The firm’s largest shareholder was Whale Rock Capital Management, which initiated a $317 million position in the company during the first quarter
Here is what Artisan Partners had to say about Arista Networks, Inc. (NYSE:ANET) in its Q4 2021 investor letter:
“Arista Networks is the market leader for cloud networking equipment used in data centers for public, private and hybrid cloud deployments. The company’s top line growth has recently been bolstered by 400G deployments—the next generation of tech powering data centers—and further enterprise network penetration as customers migrate away from Cisco (~80% market share vs. ~5% for Arista). While the profit cycle is nicely in motion, we pared our exposure as shares began to approach our PMV estimate.”
6. Analog Devices, Inc. (NASDAQ:ADI)
Point72 Asset Management’s Stake Value: $235.72 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.93%
Number of Hedge Fund Holders: 67
Analog Devices, Inc. (NASDAQ:ADI) is a Massachusetts-based semiconductor firm which serves clients in the industries of computers, consumer electronics, communications, military, aerospace, and automotive.
On June 5, Citi analyst Christopher Danely named Analog Devices, Inc. (NASDAQ:ADI) as his top semiconductor pick given the firm’s “defensive nature.” He expects downside to semiconductor consensus estimates for the remainder of 2022 due to lower PC and handset demand, as well as a slowing economy and buildup of inventory.
BofA analyst Vivek Arya was also bullish on Analog Devices, Inc. (NASDAQ:ADI) within the semi space, and gave the stock a ‘Buy’ rating, whilst lowering the price target to $190 from $220. The analyst sees chip demand taking a hit well into 2023 due to consumer weakness, geopolitical tensions and a tighter monetary policy around the globe. However, he notes that unit weakness “could be cushioned by richer non-consumer mix, robust pricing, expanding content, and constrained supply.”
As of the end of the first quarter of 2022, 67 hedge funds held stakes in Analog Devices, Inc. (NASDAQ:ADI) with a collective price tag of $4.81 billion. This is down from 72 hedge funds in the previous quarter with $4.71 billion worth of positions in the company. With a nearly $616 million stake, Egerton Capital Limited was the largest shareholder of Analog Devices, Inc. (NASDAQ:ADI) in the first quarter of 2022.
Madison Funds, an investment management firm, talked about the market position and prospects of Analog Devices, Inc. (NASDAQ:ADI) in its Q3 2021 investor letter. Here is what they said:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Merck & Co., Inc. (NYSE:MRK) and Visa Inc. (NYSE:V), Analog Devices, Inc. (NASDAQ:ADI) is on the radar of investors in 2022.
5. FedEx Corporation (NYSE:FDX)
Point72 Asset Management’s Stake Value: $240.35 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.95%
Number of Hedge Fund Holders: 52
FedEx Corporation (NYSE:FDX) provides transportation, e-commerce and logistics services to clients in the United States and internationally. FDX shares were reported in the portfolios of 52 hedge funds at the end of the first quarter, down from 64 hedge funds a quarter earlier.
On June 30, Citi analyst Christian Wetherbee reiterated a Buy rating on FedEx Corporation (NYSE:FDX) shares along with a $270 price target, after the firm hosted its first analyst day in 10 years. He noted that FedEx’s targets, efficiency initiatives and long-term network goals are “quite positive and represent a meaningful shift in its thinking and vision.” The analyst is positive on the company’s outlook for free cash flow growth, noting that it beat expectations and should provide a “stable floor” for the shares even if earnings fall below estimates.
Here is what investment firm Artisan Partners had to say about FedEx Corporation (NYSE:FDX) in its Q3 2021 investor letter:
“Our weakest Q3 performers included FedEx. Shares of FedEx, a global shipping and logistics firm, were held back by disappointing business results as labor cost headwinds and air network disruptions overshadowed solid top-line trends. We think the company should be able to overcome these near-term issues. Importantly, FedEx has strong pricing power as it operates in a consolidated global shipping industry. In September, the company announced it would increase its shipping rates by an average of 5.9% across most of its services, which is the first time in several years that its annual increase would exceed 5.0%. The industry’s renewed pricing discipline is a welcome change, reflecting a broader commitment to earn better returns on invested capital. FedEx is also closer to fully integrating TNT, a European-focused parcel company it acquired in 2016. The market is beginning to incorporate a higher probability FedEx will fully integrate TNT, which will provide a significant boost to profits. The stock now trades at a near-trough multiple of less than 12X 2022 earnings, so we added to our position on weakness.”
4. argenx SE (NASDAQ:ARGX)
Point72 Asset Management’s Stake Value: $249.54 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.99%
Number of Hedge Fund Holders: 31
argenx SE (NASDAQ:ARGX) is a Dutch biotechnology firm which develops therapies for the treatment of autoimmune diseases. As of July 6, shares of the company have risen 17.15% in the last 12 months, and 4.23% so far in 2022.
On June 27, Stifel analyst Alex Thompson resumed coverage of argenx SE (NASDAQ:ARGX) with a ‘Buy’ rating and a $460 price target. The analyst holds that the firm’s efgartigimod has a “reasonable shot” at becoming a “mega-blockbuster” drug across a broad range of autoimmune indications, and thus maintains a bullish view on the company’s future prospects.
Steve Cohen’s hedge fund disclosed ownership of roughly 791,000 shares of the company at the end of the first quarter, worth $249.5 million and amounting to a 0.99% slice of its overall portfolio.
A detailed examination of the 900+ hedge funds in the database of Insider Monkey showed that 31 hedge funds were long argenx SE (NASDAQ:ARGX) at the end of March, with aggregate stakes worth $1.95 billion. This is up from 30 hedge funds in the previous quarter with $1.58 billion worth of positions in the biotech firm. With 1.25 million shares worth $395.7 million, VenBio Select Advisor was the leading Q1 shareholder of argenx SE (NASDAQ:ARGX).
In its Q4 2021 investor letter, investment firm Artisan Partners discussed the prospects of argenx SE (NASDAQ:ARGX). Here is what it said:
“Argenx is a commercial stage biotechnology company with an approved, first and potentially best-in-class therapy (FcRn) for autoimmune diseases—a potential $10 billion+ opportunity. The company received positive news in December, winning its first FDA approval for efgartigimod, which treats myasthenia gravis—a chronic neuromuscular condition—which we believe could generate up to $3 billion in sales for Argenx. In addition to the myasthenia gravis treatment, efgartigimod is in development for several additional autoimmune diseases with possibility for more diseases to be announced over time. We believe several of these have been significantly de-risked, positioning the company to expand the revenue opportunities for the product. Finally, the company’s earlierstage pipeline product, ARGX-117 (C2), has shown promising data in several severe autoimmune diseases. Like efgartigimod, ARGX-117 (C2) has broad disease application potential. Biotech stocks’ performance is highly correlated with the commercial launch of new drugs or the release of data validating clinical trials, and we see a highconviction scenario where shares of Argenx could move higher in 2022—phase 3 ITP (IV delivery) data is expected in 1H (~$1 billion market opportunity), and a successful study would further validate the company’s approach to shift clinical risk to earlier phase 2 studies.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Point72 Asset Management’s Stake Value: $285.26 million
Percentage of Point72 Asset Management’s 13F Portfolio: 1.13%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) was the third largest holding of Steve Cohen’s Point72 Asset Management at the end of the first quarter, with a $285.3 million stake which represented 1.13% of the fund’s total holdings. This highlighted a 32% reduction in holding over the previous quarter. As part of the larger market sell-off in tech, shares of Amazon.com, Inc. (NASDAQ:AMZN) have plummeted more than 38% in the last 12 months as of July 6.
On July 6, Amazon.com, Inc. (NASDAQ:AMZN) announced a partnership with food delivery firm Grubhub, owned by Dutch company Just Eat Takeaway.com. Amazon Prime Members will now get a free one-year trial of Grubhub+ and receive free delivery for eligible orders from thousands of restaurants across the United States. This agreement will give Amazon the option to buy around 2% of Grubhub shares, with the option to buy a further 13% stake if certain performance targets are met.
Wolfe Research analyst Deepak Mathivanan on June 29 assessed that Amazon.com, Inc. (NASDAQ:AMZN) “remains a top-idea to navigate a volatile macro” in the second half of 2022, and gave the stock an ‘Outperform’ rating with a revised price target of $140, down from $145.
Out of the 912 hedge funds in the Q1 database of Insider Monkey, 271 hedge funds reported bullish bets on Amazon.com, Inc. (NASDAQ:AMZN) shares, making the most popular stock among hedge funds. In contrast, 279 hedge funds were stakeholders in Amazon a quarter earlier.
Here is what Weitz Investment Management had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon.com’s (NASDAQ:AMZN) stock was down modestly in the quarter, but opportunistic purchases helped the position contribute positively to the Fund. Our index short positions against ETFs tracking market indexes provided helpful ballast during the first quarter drawdown but were otherwise detractors for the fiscal year. During the quarter, we covered roughly 20% of our S&P 500 short and 50% of our Nasdaq 100 short at progressively lower prices. Among our long equities, we added materially to high-conviction holdings Amazon.com.”
2. Merck & Co., Inc. (NYSE:MRK)
Point72 Asset Management’s Stake Value: $293.90 million
Percentage of Point72 Asset Management’s 13F Portfolio: 1.16%
Number of Hedge Fund Holders: 84
Merck & Co., Inc. (NYSE:MRK) is one of the largest biopharmaceutical firms in the world. 84 hedge funds reported ownership of stakes in the company at the end of Q1 2022, with an aggregate value of $5.86 billion. This shows an upward trend from the previous quarter where 80 hedge funds held $3.78 billion worth of positions in the company.
The Wall Street Journal recently reported that the Covid-19 pill developed by Merck & Co., Inc. (NYSE:MRK) is more frequently prescribed by doctors in countries such as Italy, Japan and Australia, after reports highlighting safety concerns linked to rival Pfizer’s Paxlovid Covid-19 pill.
Cowen analyst Boris Peaker on June 27 maintained a ‘Market Perform’ rating on Merck & Co., Inc. (NYSE:MRK) shares and bumped the price target to $102 from $95. Addressing reports of Merck possibly acquiring Seagen (NASDAQ:SGEN), the analyst sees more cons than pros, and thinks the company should seek a less risky acquisition to achieve the diversification it needs.
Merck & Co., Inc. (NYSE:MRK) is also a prominent dividend stock, with 11 years of dividend increases and a $0.69 per share quarterly dividend, amounting to a 2.96% yield as of July 6.
ClearBridge Investments, an investment management firm, mentioned Merck & Co., Inc. (NYSE:MRK) in its Q4 2021 investor letter, stating:
“Other pharma companies are providing solutions as well. Merck’s antiviral pill molnupiravir is less effective than Pfizer’s, but it will be a helpful alternative for patients who cannot take Pfizer’s due to drug-drug interactions. Merck is also helping to manufacture Johnson & Johnson’s COVID-19 vaccine, which has less stringent storage requirements than the mRNA vaccines do.”
1. Booking Holdings Inc. (NASDAQ:BKNG)
Point72 Asset Management’s Stake Value: $355.32 million
Percentage of Point72 Asset Management’s 13F Portfolio: 1.41%
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) provides online travel, hotel reservation and other related services around the globe. Representing 1.41% of his total Q1 portfolio, Steve Cohen owned 151,000 shares of BKNG valued at more than $355 million.
On June 22, JMP Securities gave Booking Holdings Inc. (NASDAQ:BKNG) an unchanged ‘Outperform’ rating and a price target of $2,300, down from $2,750. Analyst Nicholas Jones sees the company as best positioned to benefit from a resurgence in demand, and notes that its geographical diversification and market share gains against rivals make it better positioned to navigate a tough financial climate.
Out of all the hedge funds tracked by Insider Monkey, 99 reported bullish bets on Booking Holdings Inc. (NASDAQ:BKNG) shares, up from 92 hedge funds in the previous quarter. Harris Associates, with a $1.56 billion position, was the most prominent shareholder of Booking Holdings Inc. (NASDAQ:BKNG) in the first quarter.
ClearBridge Investments discussed many stocks in its Q1 2022 investor letter, and Booking Holdings Inc. (NASDAQ:BKNG) happened to be one of them. The fund said:
“Other actions during the quarter included the sale of consumer name Booking Holdings (NASDAQ:BKNG). We sold Booking, the owner of online travel agencies Booking.com, Priceline and Kayak, due to its higher exposure to Europe where we believe a rebound in travel will be slowed by the spillover effects of the Ukraine invasion on consumer spending.”
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