In this article, we will be taking a look at the 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen.
With a net worth estimated at $17.5 billion, Steve Cohen is the founder and CEO of Point72 Asset Management LP, a global investment firm based in Stamford, Connecticut with $26.1 billion in assets under management as of July 1, 2022. Point72 is a research-driven investment management firm built around a core position in discretionary long/short equities, as well as systematic, global macro and other strategies.
Cohen received his bachelor’s degree in Economics from The Wharton School at the University of Pennsylvania and started his investing career at Gruntal & Co. Cohen managed proprietary capital for 14 years at Gruntal & Co. before starting his own hedge fund, SAC Capital Advisors in 1992. Cohen managed significant success with his hedge fund and generated 25% of annual returns on average from 1992 to 2013. Point72 is following in its predecessor’s footsteps and generated a 9.2% return in 2021.
As of Q2 2022, Steve Cohen’s Point72 Asset Management’s 13F portfolio is valued at $23.7 billion. During the second quarter, the hedge fund added 614 new positions to the portfolio, extended exposure to 356 existing positions, reduced exposure to 292 positions, and closed out 374 positions. Amazon.com, Inc. (NASDAQ:AMZN), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD) received the biggest additional investment from Point72 Asset Management during the second quarter with the number of shares increasing by 1401%, 735%, and 603%, respectively, as compared to the previous quarter.
The list of 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen cumulatively accounted for 5.31% of the portfolio weight with the highest concentration in Visa Inc. (NYSE:V) accounting for 1.15% of the portfolio weight.
Large, well-established companies with an excellent reputation and a track record of operational and financial excellence are typically classified as ‘Blue Chip’ companies or stocks. Blue chip stocks typically have high market capitalizations, market leadership positions and high brand value, such as Visa Inc. (NYSE:V), The Coca-Cola Company (NYSE:KO), and Microsoft Corporation (NASDAQ:MSFT), among others. The market leadership, reputation and historic performance suggests that blue chip stocks generally fare better fundamentally than the rest of the market even through market challenges.
The turmoil in macroeconomic conditions caused by massive inflationary pressures is having its impact on the equity markets. Central banks across the globe are hiking benchmark interest rates to control inflation, with the US Fed expected to announce at least a 75-bps hike in its upcoming policy announcement. If economic data continues to miss expectations, stocks could continue to fall.
Nevertheless, fundamentals-based investments in quality stocks have the potential to do well in the long-term as stocks are currently trading at significantly lower multiples.
Steven Cohen of Point72 Asset Management
Methodology
For our list of 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen, we took 10 leading companies from Steve Cohen’s Point72 Asset Management 13F portfolio at the end of Q2 2022 that had a mixture of growth potential, sector leadership, and defensive qualities and ranked them from #10 to #1. We also provided the number of hedge fund holders in our database that held shares in the same stocks at the end of Q2 2022.
10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen
10. Starbucks Corporation (NASDAQ:SBUX)
Point72 Asset Management’s Stake Value: $71,160,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.30%
Number of Hedge Fund Holders: 55
Seattle, Washington-based Starbucks Corporation (NASDAQ:SBUX) is a multinational chain of coffeehouses and roastery reserves with more than 34,000 stores in 84 markets across the world. With a history dating back to 1971, Starbucks Corporation (NASDAQ:SBUX) caters to millions of customers every day.
Steve Cohen’s Point72 Asset Management owns 931,537 shares of Starbucks Corporation (NASDAQ:SBUX), accounting for 0.30% of its 13F portfolio. The stock was a new addition to the hedge fund’s 13F portfolio, in Q2 2022.
Earlier this year in August, Starbucks Corporation (NASDAQ:SBUX) released the financial results for the quarter ended July 3, 2022. Its revenue increased by 9% y-o-y to $8.2 billion, while it reported a net profit of $914 million, for the three months. It reported a normalized EPS of $0.84, beating the consensus by $0.08, and declared a cash dividend of $0.49 per share for the quarter.
In September, Starbucks Corporation (NASDAQ:SBUX) announced a 3-year ‘Reinvention Plan’ to deliver 10-12% annual revenue growth and 15-20% EPS growth. Afterwards, several analysts raised their price targets for the coffeemaker’s stock including JPMorgan analyst raising the target to $100 from $92 per share, among others.
As of Q2 2022, 55 of the 895 hedge funds tracked by Insider Monkey owned shares of Starbucks Corporation (NASDAQ:SBUX), valued at $1.4 billion. Its largest shareholder was Viking Global with ownership of 9.2 million shares valued at $1.2 billion.
Alongside The Coca-Cola Company (NYSE:KO), Meta Platforms, Inc. (NASDAQ:META), and Visa Inc. (NYSE:V), Starbucks Corporation (NASDAQ:SBUX) is a blue chip stock owned by billionaire Steve Cohen’s Point72 Asset Management at the end of Q2 2022.
9. The Home Depot, Inc. (NYSE:HD)
Point72 Asset Management’s Stake Value: $71,336,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.30%
Number of Hedge Fund Holders: 80
Based in Atlanta, Georgia, The Home Depot, Inc. (NYSE:HD), is the world’s largest home improvement retailer with more than 2,300 stores in the United States, Mexico, and Canada. In addition to the physical stores, the company also operates its ecommerce platform and offers more than a million products focused on home improvement for professional contractors as well as individuals undertaking DIY projects.
Steve Cohen’s Point72 Asset Management owns 260,095 shares of The Home Depot, Inc. (NYSE:HD), accounting for 0.30% of its 13F portfolio. The stock was a new addition to the hedge fund’s 13F portfolio, in Q2 2022.
In August, The Home Depot, Inc. (NYSE:HD) released its financial results for the second quarter of 2022. Its net sales increased by 7% y-o-y to $43.7 billion, while its net earnings increased by 8% y-o-y to $5.2 billion, for the three months ended July 31, 2022. The normalized EPS was recorded at $5.05 per share, beating the consensus by $0.12.
The Home Depot, Inc. (NYSE:HD) declared a cash dividend of $1.90 per share for the second quarter and announced a $15 billion share repurchase program. Following the earnings release, Truist analyst Scot Ciccarelli raised the price target on its shares to $399 from $375.
As of Q2 2022, 80 of the 895 hedge funds tracked by Insider Monkey have positions in The Home Depot, Inc. (NYSE:HD), worth $5.4 billion.
Diamond Hill Capital mentioned The Home Depot, Inc. (NYSE:HD) in its Q1 2022 investor letter. Here is what the firm has to say:
“Home Depot shares underperformed as continued solid fundamental results were outweighed by concerns about the impact rising mortgage rates may have on the housing market and general inflationary pressures potentially leading to a consumer spending slowdown. We view the long-term prospects and multi-year fundamental outlook as unchanged.”
8. NIKE, Inc. (NYSE:NKE)
Point72 Asset Management’s Stake Value: $74,606,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 72
NIKE, Inc. (NYSE:NKE), based in Beaverton, Oregon, is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities.
As of Q2 2022, Steve Cohen’s Point72 Asset Management holds 729,999 shares of NIKE, Inc. (NYSE:NKE), accounting for 0.31% of the 13F portfolio of the hedge fund. The hedge fund increased its stake by 120% in Q2 2022, as compared to the previous quarter.
In June, NIKE, Inc. (NYSE:NKE) released the financial results for the quarter ended May 31, 2022. Its revenue decreased by 1% y-o-y to $12.2 billion, while its net income decreased by 5% y-o-y to $1.4 billion, for the three months. It reported a normalized EPS of $1.00, beating the consensus by $0.19, and declared a quarterly cash dividend of $0.305 per share.
In September, UBS analyst Jay Sole affirmed his bullish sentiment for NIKE, Inc. (NYSE:NKE) shares despite the possibility of macro issues impacting the stock in the near term. The analyst maintains a target price of $156 for its NIKE, Inc. (NYSE:NKE) shares with a ‘Buy’ rating.
As of Q2 2022, 72 of the 895 hedge funds tracked by Insider Monkey owned shares of NIKE, Inc. (NYSE:NKE), valued at $3.3 billion.
7. Oracle Corporation (NASDAQ:ORCL)
Point72 Asset Management’s Stake Value: $93,479,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.39%
Number of Hedge Fund Holders: 69
Austin, Texas-based Oracle Corporation (NASDAQ:ORCL) is a leading software technology company with a focus on providing products and services to address enterprise information technology environments. Its portfolio of products and services includes Oracle Cloud Infrastructure, Oracle Cloud Applications, and hardware and software solutions.
Steve Cohen’s Point72 Asset Management owns 1,337,900 shares of Oracle Corporation (NASDAQ:ORCL), accounting for 0.39% of its 13F portfolio, as of Q2 2022. The hedge fund increased its stake by 1% in Q2 2022, as compared to the previous quarter.
Earlier this month in September, Oracle Corporation (NASDAQ:ORCL) released its financial results for the quarter ended August 31, 2022. Its total revenues increased by 18% y-o-y to $11.4 billion, while its net income shrunk by 37% y-o-y to $1.5 billion, for the three months. The normalized EPS was recorded at $1.03 for the quarter, missing the consensus by $0.04, and declared a quarterly cash dividend of $0.32 per share.
Following the earnings release, analysts at Evercore ISI, and BMO Capital raised price targets on Oracle Corporation (NASDAQ:ORCL) shares to $87 from $78, and $90 from $86, respectively.
As of Q2 2022, 69 hedge funds tracked by Insider Monkey held shares of Oracle Corporation (NASDAQ:ORCL), worth $4.2 billion.
6. Microsoft Corporation (NASDAQ:MSFT)
Point72 Asset Management’s Stake Value: $99,152,000
Percentage of Point72 Asset Management’s 13F Portfolio:
Number of Hedge Fund Holders: 0.41%
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft Corporation (NASDAQ:MSFT) boasts over 1.4 billion monthly active devices running its flagship operating system, Windows 10 or 11.
Steve Cohen’s Point72 Asset Management owns 386,060 shares of Microsoft Corporation (NASDAQ:MSFT), accounting for 0.41% of its 13F portfolio. The hedge fund increased its stake by 283% in Q2 2022, as compared to the previous quarter.
Earlier this year, Microsoft agreed to acquire Activision Blizzard, Inc. (NASDAQ:ATVI) in an all-cash transaction valued at $68.7 billion. The proposed acquisition is expected to accelerate growth in Microsoft’s Gaming business across mobile, PC, console, and cloud although it hasn’t closed yet.
As of Q2 2022, Microsoft Corporation (NASDAQ:MSFT) is the most sought-after stock among the 895 hedge funds tracked by Insider Monkey as 258 of these hedge funds held shares in the software giant, valued at $56 billion. Fisher Asset Management was the largest shareholder in the company owning 28.7 million shares valued at $7.4 billion.
Like Microsoft Corporation (NASDAQ:MSFT), The Coca-Cola Company (NYSE:KO), Meta Platforms, Inc. (NASDAQ:META), and Visa Inc. (NYSE:V) are also blue chip stocks owned by billionaire Steve Cohen’s Point72 Asset Management at the end of Q2 2022.
5. Yum! Brands, Inc. (NYSE:YUM)
Point72 Asset Management’s Stake Value: $137,485,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 40
Louisville, Kentucky-based Yum! Brands, Inc. (NYSE:YUM) is a leading global restaurant company operating or franchising a network of more than 53,000 restaurants in 155 countries and territories under the brand names of KFC, Taco Bell, Pizza Hut, and the Habit Burger Grill.
Steve Cohen’s Point72 Asset Management owns 1,211,214 shares of Yum! Brands, Inc. (NYSE:YUM), accounting for 0.58% of its 13F portfolio. The hedge fund increased its stake by 82% in Q2 2022, as compared to the previous quarter.
Earlier this year in August, Yum! Brands, Inc. (NYSE:YUM) released its financial results for the quarter ended June 30, 2022. Its total revenue increased by 2% y-o-y to $1.6 billion, while its net income declined by 43% y-o-y to $422 million, for the three months. The normalized EPS was recorded at $1.05 for the quarter, missing the consensus by $0.04, and declared a quarterly dividend of $0.57 per share.
In September, Bernstein analyst Danilo Gargiulo initiated coverage of Yum! Brands, Inc. (NYSE:YUM) with an ‘Outperform’ rating and $144 price target.
As of Q2 2022, 40 of the 895 hedge funds tracked by Insider Monkey were long Yum! Brands, Inc. (NYSE:YUM), holding shares worth $1.8 billion.
4. Amazon.com, Inc. (NASDAQ:AMZN)
Point72 Asset Management’s Stake Value: $139,432,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 252
Amazon.com Inc (NASDAQ: AMZN), is a multinational technology company operating online and physical stores where it sells its own products as well as allows third-party sellers to sell their products to consumers. It manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, and Ring, and develops and produces media content; and provides cloud computing services through Amazon Web Services platform. Its ecommerce platform is home to more than 1.7 million small and medium businesses.
Steve Cohen’s Point72 Asset Management’s holds 1,312,791 shares of Amazon.com Inc (NASDAQ: AMZN), accounting for 0.58% of its 13F portfolio, as of Q2 2022. The hedge fund increased its stake by 1,401% during the latest quarter, as compared to the previous one. As a result, the ecommerce giant ranks #4 on the list of 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen.
Amazon.com Inc (NASDAQ: AMZN) is also highly sought after by hedge funds with the second highest number of hedge funds as 252 out of the 895 tracked by Insider Monkey hold its shares with a total value of $30.1 billion.
Oakmark Funds, an investment management firm, mentioned Amazon.com, Inc. (NASDAQ: AMZN) in its second quarter of 2022 investor letter. Here’s what they said:
“Amazon (NASDAQ:AMZN) is the leading e-commerce and cloud-computing provider in the world. Two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (“AWS”) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at a very attractive price. At our purchase price and valuing AWS like its peers, an investor isn’t paying much of anything for the immensely valuable e-commerce franchise.”
3. The Coca-Cola Company (NYSE:KO)
Point72 Asset Management’s Stake Value: $143,363,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.60%
Number of Hedge Fund Holders: 60
The Coca-Cola Company (NYSE:KO) is a leading global beverage company with a history dating back to 1886. Its portfolio of brands, sold in more than 200 countries and territories, includes Coca-Cola, Sprite, Fanta and other sparkling soft drinks, hydration, sports, coffee and tea brands, and other beverages.
As of Q2 2022, Steve Cohen’s Point72 Asset Management holds 2,278,860 shares of The Coca-Cola Company (NYSE:KO), accounting for 0.60% of the hedge fund’s 13F portfolio. The hedge fund increased its stake by 7% in Q2 2022, as compared to the previous quarter.
In July, The Coca-Cola Company (NYSE:KO) released the financial results for the quarter ended July 1, 2022. Its net revenue increased by 12% y-o-y to $11.3 billion, while its net income shrunk by 28% y-o-y to $1.9 billion, for the three months. It reported a normalized EPS of $0.70 for the quarter, narrowly beating the consensus by $0.03, and declared a regular quarterly dividend of $0.44 per share.
In September, HSBC analyst Carlos Laboy raised the price target on The Coca-Cola Company (NYSE:KO) shares to $76 from $72 and maintained a ‘Buy’ rating on the shares.
As of Q2 2022, 60 of the 895 hedge funds tracked by Insider Monkey held The Coca-Cola Company (NYSE:KO) shares, valued at a combined total of $28.4 billion.
2. Meta Platforms, Inc. (NASDAQ:META)
Point72 Asset Management’s Stake Value: $164,619,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.69%
Number of Hedge Fund Holders: 184
Menlo Park, California-based Meta Platforms, Inc. (NASDAQ:META) is a technology conglomerate focused on building products and services that help people connect and communicate. Formerly known as Facebook, Inc., the tech conglomerate reports its business under two segments: Family of Apps – comprising social media web and smartphone apps Facebook, Instagram, Messenger, and WhatsApp; and Reality Labs – comprising augmented and virtual reality products including hardware, software, and content.
Meta Platforms, Inc. (NASDAQ:META) mainly generates revenue through advertising services on its platforms which boast a combined total of 3.65 billion monthly active users as of June 30, 2022.
Meta Platforms, Inc. (NASDAQ:META) is ranked #2 on the list of 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen based on its portfolio weight of 0.69%, among other aspects, as of Q2 2022. The hedge fund holds 1,020,893 shares of Meta Platforms, Inc. (NASDAQ:META), 146% more than the number of shares held at the end of the previous quarter.
Meta Platforms, Inc. (NASDAQ:META) is among hedge funds’ favorites as 184 of the 895 hedge funds tracked by Insider Monkey hold its shares valued at a combined total of $18.2 billion.
Here is what Alger Capital specifically said about Meta Platforms, Inc. (NASDAQ:META):
“Meta Platforms, Inc. (NASDAQ:META) operates Facebook, the world’s largest social network. The digital advertising industry is taking market share of advertising dollars from print, radio, and tv media. However, concerns about brand risk, or having advertisements appear alongside of controversial content, caused brands and agencies to move budgets away from meta, resulting in disappointing revenue. Diminished ad tracking capability relative to consumer opt-out also weighed upon sentiment for meta shares. Meta’s share performance responded favorably, however, to first quarter results that that while not strong fundamentally, were positive against extremely low expectations among some investors. The positive contribution to portfolio performance was due to a sequential quarterly increase in customer utilization and management lowering its expense guidance $3 billion in order to protect earnings. In a market environment that is rewarding companies with relatively high current earnings, we believe Meta’s spending discipline resonated with investors.”
1. Visa Inc. (NYSE:V)
Point72 Asset Management’s Stake Value: $273,025,000
Percentage of Point72 Asset Management’s 13F Portfolio: 1.15%
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) is a leading digital payments company facilitating transactions between consumers, merchants, financial institutions, and government entities across more than 200 countries and territories. It had more than 3.8 billion cards in issuance, as of December 31, 2021.
Steve Cohen’s Point72 Asset Management owns 1,386,686 shares of Visa Inc. (NYSE:V), accounting for 1.15% of its 13F portfolio. The hedge fund increased its stake by 50% in Q2 2022, as compared to the previous quarter.
In July, Visa Inc. (NYSE:V) released its financial results for the quarter ended June 30, 2022. Its net revenues increased by 19% y-o-y to $7.3 billion, while its net income increased by 32% y-o-y to $3.4 billion, for the three months. It reported a normalized EPS of $1.98 for the quarter, beating the consensus by $0.23. Visa Inc. (NYSE:V) also declared a quarterly cash dividend of $0.375 per share.
As of Q2 2022, Visa Inc. (NYSE:V) is among the favorites of hedge funds, with 166 of the 895 hedge funds tracked by Insider Monkey holding its shares valued at $24.1 billion. TCI Fund Management was the largest shareholder owning 19.9 million shares valued at $3.9 billion.
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Disclosure: None. 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.
