In this piece, we will take a look at the top ten stocks to buy today according to billionaire Thomas Steyer.
Thomas Steyer is a former American hedge fund investor who helped set up the fund Farallon Capital. Farallon Capital is based in San Francisco, California and the fund has been operating for decades in the financial sector and has offices all over the globe.
Like most of his peers in the hedge fund world, Mr. Steyer also has significant industry experience – which he then capitalized to set up his own fund in 1986. The former executive belongs to a well off family, with his father having had the distinction of serving on the Nuremberg Trials as a prosecutor to bring Nazi Germany officials to justice.
Mr. Steyer’s educational background saw him study at some of the most prestigious schools in the U.S., as he is an alumnus of the Buckley School and the Exeter Academy, which are private schools available to only a select few in New York. After finishing his school level education, he would go on to attend Yale University for a degree in politics and economics, following which he would receive his Master of Business Administration degree from Stanford University, after starting his career at the investment bank Morgan Stanley and working there for two years.
After his MBA, Mr. Steyer would go on to work for another prestigious investment bank, Goldman Sachs, from 1983 to 1985, after which he would become a partner for a San Francisco based private equity firm. A year later he set up Farallon Capital, which would see him become a billionaire before retiring in 2012. After his retirement, the executive would focus his efforts on advocating for renewable energy, with him and his wife having donated hefty sums of money to alternative fuel research.
Farallon Capital had a $16 billion portfolio by the end of this year’s second quarter, making it one of the largest hedge funds in the world. As for Mr. Steyer, his latest net worth estimate by Forbes Magazine pegs his wealth at a cool $1.5 billion. In today’s piece we will talk about Farallon Capital’s top investments, with the top picks being Thermo Fisher Scientific Inc. (NYSE:TMO), IQVIA Holdings Inc. (NYSE:IQV), and TransUnion (NYSE:TRU).
Our Methodology
We took a look at Farallon Capital’s top investments for this year’s second quarter by scanning its filings with the U.S. government. A brief background and recent performance of the companies were then provided, after which they were listed according to hedge fund sentiment generated via Insider Monkey’s Q2 2022 survey of 895 hedge funds
Best Stocks to Buy Now According to Billionaire Thomas Steyer
10. Clarivate Plc (NYSE:CLVT)
Farallon Capital’s Stake Value: $340 million
Percentage of Farallon Capital’s 13F Portfolio: 2.09%
Number of Hedge Fund Holders: 31
Clarivate Plc (NYSE:CLVT) is a British information service and analytics company. The firm provides products that enable organizations to streamline their research, and it also supports the pharmaceutical industry in developing drugs. Clarivate Plc (NYSE:CLVT) is headquartered in London.
Clarivate Plc (NYSE:CLVT) expects to earn $2.84 billion in revenue by the end of this year, alongside posting $1.19 billion in operating income and adjusted earnings of $0.9 per share. All these imply growth over last year’s results, as they will be fueled by a massive acquisition spree that the firm was on in 2021.
Farallon Capital’s stake in Clarivate Plc (NYSE:CLVT) was worth $340 million as this year’s second quarter ended. This came in the form of 24 million shares and it represented 2.09% of its investment portfolio. Insider Monkey’s Q2 2022 survey of 895 hedge funds revealed that 31 had invested in the firm.
Clarivate Plc (NYSE:CLVT)’s largest investor is Leonard Green’s Leonard Green & Partners which owns 116 million shares that are worth $1.6 billion.
Baron Funds mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“We sold Clarivate Plc (NYSE:CLVT), an information services company focused primarily on the academic and legal end markets. We believed that the company’s well-regarded management team would be able to accelerate organic revenue growth, increase margins and cash flow, and acquire and integrate various complementary information services assets. We grew frustrated by the company’s continued inability to meet these goals.”
Alongside IQVIA Holdings Inc. (NYSE:IQV), Thermo Fisher Scientific Inc. (NYSE:TMO), and TransUnion (NYSE:TRU), Clarivate Plc (NYSE:CLVT) is a top Farallon Capital stock pick.
9. Full Truck Alliance Co. Ltd. (NYSE:YMM)
Farallon Capital’s Stake Value: $359 million
Percentage of Farallon Capital’s 13F Portfolio: 2.2%
Number of Hedge Fund Holders: 20
Full Truck Alliance Co. Ltd. (NYSE:YMM) is a Chinese company that provides a digital freight platform to connect shippers with their customers. The company is headquartered in Guiyang, China, and it also provides value added services such as insurance and credit.
Farallon Capital held a $359 million stake in Full Truck Alliance Co. Ltd. (NYSE:YMM) as part of its Q2 2022 holdings. This came through the fund owning 39 million shares of the company and it made up 2.2% of its investment portfolio. During the same time period, 20 of the 895 hedge funds polled by Insider Monkey had also invested in Full Truck Alliance Co. Ltd. (NYSE:YMM).
Full Truck Alliance Co. Ltd. (NYSE:YMM) has managed to substantially grow its revenues despite the persistent lockdowns in China, and the firm’s latest quarter saw it post $210 million in revenue for the first revenue drop in five quarters. However, this was still significantly higher than the $132 million in revenue that the firm had posted in last year’s March quarter. Full Truck Alliance Co. Ltd. (NYSE:YMM)’s trailing twelve month revenue growth is at an impressive 74%.
Full Truck Alliance Co. Ltd. (NYSE:YMM)’s largest investor after Farallon Capital in our database is Panayotis Takis Sparaggis’s Alkeon Capital Management which owns 14 million shares that are worth $128 million.
Baron Funds mentioned the company in its Q2 2022 investor letter and stated that:
“Full Truck Alliance Co. Ltd. (NYSE:YMM) is the largest digital freight platform in the world. Shares of the China-based company rallied after a cybersecurity review greenlighted the use of its Apps to add new user registrations. We remain investors. Digital platform penetration into China’s four trillion RMB full truck-load market is still just in the single digits. We see major upside based on the expected rollout of transaction commissions to truckers from the current 6% market penetration and less than 1% take rate, and we expect revenue to grow at 50% CAGR over the next five years.”
8. Mastercard Incorporated (NYSE:MA)
Farallon Capital’s Stake Value: $363 million
Percentage of Farallon Capital’s 13F Portfolio: 2.23%
Number of Hedge Fund Holders: 137
Mastercard Incorporated (NYSE:MA) is an American payments platform provider that is known for its debit and credit cards. The company also provides retailers with card reading machines, and it is headquartered in Purchase, New York.
Mastercard Incorporated (NYSE:MA)’s revenues grew by 21% annually during its second fiscal quarter, as the firm beat analyst estimates. For the same time period, its GAAP operating income grew by 29% and GAAP EPS grew by 13% – enabling it to show strong growth on all fronts as it benefited from strong consumer spending.
Mr. Steyer’s former investment firm owned 1.1 million Mastercard Incorporated (NYSE:MA) shares as part of its second quarter of 2022 portfolio. These enabled it to hold a $363 million stake in the company. Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that 137 had also invested in the payments platform provider.
Mastercard Incorporated (NYSE:MA)’s largest investor is Charles Akre’s Akre Capital Management which owns 5.8 million shares that are worth $1.8 billion.
L1 Capital International mentioned the company in its Q2 2022 investor letter and outlined that:
“Growth in electronic payments, the continued shift away from cash and cheques, and the provision of additional services such as fraud identification and prevention continue to power Mastercard Incorporated (NYSE:MA)’s growth (Figure 14). In person cross-border transactions are recovering alongside normalisation of travel.
Mastercard and Visa (we have invested in both) continue to dominate the electronic payments industry outside of China, utilising their own multi-faceted networks as well as Government and third-party payments infrastructure to facilitate transactions. Another perfect example of a ‘Noah’s Ark’ industry structure.
Regulation, technological disruption and disintermediation, and geopolitical constraints are perennial issues for consideration, but Mastercard (and Visa) management have repeatedly demonstrated their ability to manage these issues…” (Click here to read the full text)
7. Centene Corporation (NYSE:CNC)
Farallon Capital’s Stake Value: $367 million
Percentage of Farallon Capital’s 13F Portfolio: 2.26%
Number of Hedge Fund Holders: 58
Centene Corporation (NYSE:CNC) is a healthcare company that provides its services to under and uninsured individuals in America. The firm provides healthcare coverage plans funded by the government, home based care, pharmacy, and other services. It is headquartered in St. Louis, Missouri.
Farallon Capital’s stake in Centene Corporation (NYSE:CNC) by the end of this year’s June quarter stood at $367 million and it came through the firm owning 4.3 million shares of the company. Insider Monkey’s 895 hedge fund study for the same period revealed that 58 had held a stake in Centene Corporation (NYSE:CNC).
Centene Corporation (NYSE:CNC) is only one of nine publicly listed managed healthcare companies in America, which gives it a strong edge in a highly lucrative industry. The firm’s shares have dropped by only 4% this year, making it outperform the Standard and Poor 500 index, which has dropped by a painful 22%.
Andreas Halvorsen’s Viking Global is Centene Corporation (NYSE:CNC)’s largest investor. It owns 8.2 million shares that are worth $701 million.
6. Howmet Aerospace Inc. (NYSE:HWM)
Farallon Capital’s Stake Value: $435 million
Percentage of Farallon Capital’s 13F Portfolio: 2.67%
Number of Hedge Fund Holders: 39
Howmet Aerospace Inc. (NYSE:HWM) is an American company that provides aerospace firms with engineered products that are used in a variety of machines such as jet engines, gas turbines, and other transportation vehicles. The firm is headquartered in Pittsburg, Pennsylvania.
Howmet Aerospace Inc. (NYSE:HWM) is set to benefit from an uptick in global transportation in the aftermath of the devastation ushered in by the coronavirus pandemic. Passenger numbers are slated to grow a whopping 89% this year, and analysts expect $1.3 billion in operating income from the company this year for a 4.4% FCF yield. Morgan Stanley increased the company’s share price target to $45 from $43 in September 2022, calling it one of its top stock picks.
Mr. Steyer’s hedge fund held a $435 million stake in Howmet Aerospace Inc. (NYSE:HWM) for its Q2 2022 holdings, which came in the form of 13.8 million shares. For the same time period, 39 of the 895 hedge funds polled by Insider Monkey had held stakes in the company.
Paul Singer’s Elliott Management is Howmet Aerospace Inc. (NYSE:HWM)’s largest investor in our database through a $1.2 billion stake that comes via 41 million shares.
Howmet Aerospace Inc. (NYSE:HWM) joins the list of billionaire Thomas Steyer’s favorite stocks, with some others being Thermo Fisher Scientific Inc. (NYSE:TMO), IQVIA Holdings Inc. (NYSE:IQV), and TransUnion (NYSE:TRU).
5. Aramark (NYSE:ARMK)
Farallon Capital’s Stake Value: $490 million
Percentage of Farallon Capital’s 13F Portfolio: 3.01%
Number of Hedge Fund Holders: 27
Aramark (NYSE:ARMK) is an American company that offers food and uniform services to a wide variety of industries such as education, security, sports, and prisons. The firm is headquartered in Philadelphia, Pennsylvania.
Farallon Capital held a $490 million stake in Aramark (NYSE:ARMK) as part of its second quarter of 2022 investments. This came through the firm owning 16 million shares of the company and it represented 3% of its investment portfolio. For the same time period, 27 out of the 895 hedge funds polled by Insider Monkey had bought the company’s shares.
Aramark (NYSE:ARMK) reported a 38% revenue growth during its latest fiscal quarter, which beat analyst expectations. At the same time, it also upgraded its annual revenue growth estimate to sit at a high end of 32%, above the 27% forecast it had previously guided. The revenue growth now places the net sales at above pre COVID levels.
Aramark (NYSE:ARMK)’s largest investor after Farallon Capital is George Soros’s Soros Fund Management which owns 3.6 million shares that are worth $110 million.
4. Boston Scientific Corporation (NYSE:BSX)
Farallon Capital’s Stake Value: $560 million
Percentage of Farallon Capital’s 13F Portfolio: 3.45%
Number of Hedge Fund Holders: 56
Boston Scientific Corporation (NYSE:BSX) is a medical device manufacturer and seller that serves the needs of surgeons and neurological and cardiovascular patients. The company is headquartered in Marlborough, Massachusetts, the United States.
Boston Scientific Corporation (NYSE:BSX) has managed to consistently beat analyst EPS estimates for its previous four quarters, as hospitals and physicians shifted their attention from coronavirus patients to those with other diseases. Bank of America paints a bright future for the company’s earnings per share, as it expects it to grow the metric by 7.4%, 11.4%, and 12.3% from 2022 end to 2024 end.
Mr. Steyer’s former hedge fund owned 15 million Boston Scientific Corporation (NYSE:BSX) shares as part of its Q2 2022 holdings, allowing it to hold a $560 million stake in the company. Insider Monkey’s 895 hedge fund survey for this year’s June quarter revealed that 56 had bought Boston Scientific Corporation (NYSE:BSX)’s shares.
Out of these, Andreas Halvorsen’s Viking Global is Boston Scientific Corporation (NYSE:BSX)’s second largest investor as it owns a $546 million stake that comes through 14.6 million shares.
3. TransUnion (NYSE:TRU)
Farallon Capital’s Stake Value: $596 million
Percentage of Farallon Capital’s 13F Portfolio: 3.67%
Number of Hedge Fund Holders: 24
TransUnion (NYSE:TRU) is a risk and information solutions provider that offers a variety of products and services such as consumer reports, insights reports, and business analytics. The company is headquartered in Chicago, Illinois, the United States.
By the end of this year’s June quarter, Farallon Capital had owned 7.4 million TransUnion (NYSE:TRU) shares which were worth $596 million and represented 3.67% of its investment portfolio. During the same time period, 24 of the 895 hedge funds polled by Insider Monkey had also invested in the company.
TransUnion (NYSE:TRU) is one of the world’s largest credit reporting agencies, and it has data of more than 200 million Americans and over 1 billion people all over the globe. Its primary market, the big data segment, is estimated to be worth a whopping $103 billion by 2027, leaving the company with a large playing field – a fact that is compounded when we see that it is one of only three of the world’s largest credit rating agencies.
TransUnion (NYSE:TRU)’s largest investor after Farallon Capital is Tim Hurd and Ed Magnus’s BlueSpruce Investments which owns 5 million shares that are worth $400 million.
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Farallon Capital’s Stake Value: $675 million
Percentage of Farallon Capital’s 13F Portfolio: 4.15%
Number of Hedge Fund Holders: 93
Thermo Fisher Scientific Inc. (NYSE:TMO) is a life sciences services and analytical instruments provider that is based out of Waltham, Massachusetts, the United States. The firm provides products such as reagent kits, verification fluids, preparation and transportation systems, and cultured media to biotechnology and pharmaceutical companies.
Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the strongest dividend stocks in its industry and on the stock market. The company pays 30 cent dividend for a 0.23% yield. Over the past two decades, the firm has paid out 16.6% in dividends and its ten year average dividend growth rate sits at 16%.
Farallon Capital held a $675 million stake in Thermo Fisher Scientific Inc. (NYSE:TMO) during the second quarter of this year, which came in the form of 1.2 million shares and represented 4.15% of its investment portfolio. Insider Monkey’s Q2 2022 895 hedge fund survey saw 93 as having invested in the company.
Thermo Fisher Scientific Inc. (NYSE:TMO)’s largest investor in our database is Ken Fisher’s Fisher Asset Management which owns 2.3 million shares that are worth $1.2 billion.
Stewart Asset Management mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Recently we initiated two new investments. One in Thermo Fischer Scientific (NYSE:TMO), a supplier to the life sciences industry. We have followed the company for many years and the recent downturn in share price gave us a good entry price at which to invest. Thermo has had strong earnings growth for many years and is led by a superb team. The company’s recent acquisitions make it a full-service supplier to the biopharma and biotech industries.”
1. IQVIA Holdings Inc. (NYSE:IQV)
Farallon Capital’s Stake Value: $697 million
Percentage of Farallon Capital’s 13F Portfolio: 4.29%
Number of Hedge Fund Holders: 53
IQVIA Holdings Inc. (NYSE:IQV) is a data analytics and research solutions provider to the healthcare industry. The firm serves clients in North and South America, Europe, Africa, and the Asia Pacific region. It is headquartered in Durham, North Carolina, the United States.
Farallon Capital owned 3.2 million IQVIA Holdings Inc. (NYSE:IQV) shares as part of its Q2 2022 holdings. These allowed it to own a $697 million stake in the company. For the same time period, an Insider Monkey survey of 895 hedge funds showed that 53 had also bought IQVIA Holdings Inc. (NYSE:IQV)’s shares.
IQVIA Holdings Inc. (NYSE:IQV) posted a 7% annual revenue growth for its second fiscal quarter, which saw the company rake in $3.5 billion in revenue. This let the firm post $1.5 billion in free cash flow on a trailing twelve month basis, for a strong FCF return on equity of 29%.
IQVIA Holdings Inc. (NYSE:IQV)’s largest investor in our database after Farallon Capital is William Von Mueffling’s Cantillon Capital Management which owns 1.5 million shares that are worth $341 million.
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Disclosure: None. 10 Best Stocks to Buy Now According to Billionaire Thomas Steyer is originally published on Insider Monkey.
