Below we present the list of 5 Stocks Billionaire David Harding is Buying in Droves. For our methodology and a more comprehensive list of the billionaire’s favorite stocks right now, please see 10 Stocks Billionaire David Harding is Buying in Droves.
5. Citrix Systems, Inc. (NASDAQ:CTXS)
Value of Winton Capital Management‘s 13F Position: $16.2 million
Number of Hedge Fund Shareholders: 40
The second part of our list of stocks that David Harding’s Winton Capital Management is buying in droves begins with Citrix Systems, Inc. (NASDAQ:CTXS). The fund grew its stake in the cloud computing company by 919% to 160,771 shares during Q1. There was a 60% surge in hedge fund ownership of CTXS during Q1.
Citrix Systems, Inc. (NASDAQ:CTXS) is set to merge with TIBCO Software in a deal that values Citrix at $104 per share. The deal was facilitated by investment firm Vista Equity Partners and Evergreen Coast Capital, which is an affiliate of Paul Singer’s Elliott Management. Singer’s fund owned 1.2 million CTXS shares on March 31. The deal is expected to close in the third quarter of this year, upon receiving final regulatory approvals.
The ClearBridge Mid Cap Growth Strategy sold out of its Citrix Systems, Inc. (NASDAQ:CTXS) position in Q3 of last year in light of the company’s financial targets being pushed out. It had this to say about the company in its Q3 2021 investor letter:
“When we notice a meaningful slowdown due to growing competitive threats or our thesis has not played out as expected, we remain disciplined in acting. These concerns motivated our sale of Citrix Systems, which is experiencing complications in transitioning its business model to the cloud while a reorganization of its sales force is pushing out financial targets; as well as a small position in technology-driven real estate brokerage Compass.”
4. W.R. Berkley Corporation (NYSE:WRB)
Value of Winton Capital Management‘s 13F Position: $17.3 million
Number of Hedge Fund Shareholders: 35
Winton Capital’s stake in W.R. Berkley Corporation (NYSE:WRB) was 884% larger at the end of Q1 than it was at the beginning of it, with the fund amassing a position of 259,167 shares during the quarter. Jonathan Bloomberg’s BloombergSen is the most bullish shareholder of WRB in our database, having nearly 8% exposure to the stock.
Operating primarily as a property casualty insurer, W.R. Berkley Corporation (NYSE:WRB) appears poised to benefit from rising interest rates in a somewhat unexpected way. Insurers typically invest the majority of their substantial cash flow into bonds, which have been playing close to zilch in recent years. However, with rates on the rise, bonds are likewise on the move up, making them a much more profitably investment for insurers.
Six-month Treasury bills now yield over 2.6%, compared to a paltry 0.1% just a year earlier. That equates to a 26x boost in a major profitability component for insurers, which have slim margins on their premiums but can pocket all of their investment windfalls. W.R. Berkley Corporation (NYSE:WRB) shares have gained 16% this year due to that tailwind, and that run should continue throughout the current rate cycle based on its performance during the two most recent hiking cycles.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Value of Winton Capital Management‘s 13F Position: $18.2 million
Number of Hedge Fund Shareholders: 274
Amazon.com, Inc. (NASDAQ:AMZN) has a lot going for it, which includes topping our list of the 5 Best Data Center Stocks To Invest In. David Harding certainly likes the near-term trajectory of Amazon, as he grew his fund’s stake in the ecommerce titan 13-fold during Q1 to 5,598 shares. John Nevin Jr.’s Ayshire Capital Management topped even that, growing its AMZN holding 20-fold during the quarter.
Amazon.com, Inc. (NASDAQ:AMZN)’s Prime Day was in full swing the past two days, but some analysts suggested it was the company’s stock that was the biggest deal of all. Amazon shares have fallen 32% this year due in part to sagging profitability in Q1, which resulted in the company’s first quarterly loss in seven years. The ecommerce giant suffered an $11.9 billion swing in net income year-over-year during Q1.
A huge chunk of that loss was due to Amazon.com, Inc. (NASDAQ:AMZN)’s $7.6 billion pre-tax valuation loss on its 18% stake in Rivian Automotive, Inc. (NASDAQ:RIVN), shares of which cratered by 51% during the first quarter. That’s a transient issue however. Of more critical import is Amazon’s Web Services, which Harris Associates investment analyst Marko Lazarevic believes will one day be worth Amazon’s entire current market cap. As he put it “you’re essentially getting the retail business for free”, and without taking on much risk.
2. Ulta Beauty, Inc. (NASDAQ:ULTA)
Value of Winton Capital Management‘s 13F Position: $18.4 million
Number of Hedge Fund Shareholders: 48
Winton Capital grew its Ulta Beauty, Inc. (NASDAQ:ULTA) position nearly 7-fold during Q1 to 46,191 shares. Several other hedge funds were also buying up ULTA shares in Q1, as there was a 26% increase during the quarter in terms of the number of funds long the stock. Alexander Mitchell’s Scopus Asset Management built the largest new stake in ULTA during Q1, consisting of 142,500 shares.
Ulta Beauty, Inc. (NASDAQ:ULTA) has been on a roll for several quarters now, driven by the overall strength of the beauty sector. The company grew sales by 21% year-over-year to $2.35 billion during Q1, while earnings soared by 54% to $6.28 per share. That actually represented the company’s weakest quarterly earnings growth in the last year following three consecutive quarters of phenomenal triple-digit growth, including 454% and 519% growth in the middle quarters of 2021. Raymond James upgraded Ulta Beauty to ‘Strong Buy’ from ‘Outperform’ in late June, pointing out that 40% of the company’s customers have six-figure household incomes, which should help insulate it from a recession. The firm has a $485 price target on the stock
The ClearBridge Investments Large Cap Growth Strategy was bullish on consumer spending heading into 2022, predicting it would benefit retailers like Ulta Beauty, Inc. (NASDAQ:ULTA). The following comments are from the fund’s Q4 2021 investor letter:
“Several encouraging macro trends are emerging in support of two areas outside tech: consumer spending and industrial production. Unlike in past recessions and recoveries, consumer balance sheets have actually improved dramatically since the onset of the pandemic. This should feed through to increased spending on discretionary items offered by retailers like Ulta Beauty. We expect the supply chain constraints contributing to inflation and goods shortages will begin to lessen with an ambitious rebuilding of inventories.”
1. Union Pacific Corporation (NYSE:UNP)
Value of Winton Capital Management‘s 13F Position: $21.2 million
Number of Hedge Fund Shareholders: 90
Topping the list of stocks that David Harding is buying in droves is Union Pacific Corporation (NYSE:UNP). Winton Capital grew its UNP stake by 335% during Q1 to 77,643 shares, with the position ranking as its second-largest equity holding as of March 31. Hedge fund ownership of Union Pacific surged to a record high during Q1, jumping by 48% quarter-over-quarter.
Union Pacific Corporation (NYSE:UNP) pulled in $5.86 billion in revenue during Q1, a 17.2% year-over-year increase and topping estimates by $100,000. Earnings per share grew by 29% year-over-year to $2.57, which narrowly topped estimates. Further cost pressures are weighing on the company’s bottom line, with management warning last month that rising fuel prices and other costs would negatively impact its profit margins.
Earlier this month, Susquehanna downgraded UNP to ‘Neutral’ from ‘Positive’. The firm noted the aforementioned cost pressures facing the firm and broader industry, as well as supply chain challenges that are weighing on rail volumes despite strong underlying demand. The firm fears that demand from rail’s rate-sensitive markets like housing could soon weaken though. Susquehanna cut its price target on Union Pacific shares to $235 from $310.
Carillon Eagle Growth & Income Fund is bullish on Union Pacific Corporation (NYSE:UNP) given rising oil prices, having this to say about the company in its Q1 2022 investor letter:
“Union Pacific (NYSE:UNP) benefited from rising oil prices, which typically bring more demand for rail shipping as opposed to moving freight by truck. Rail transportation can be much more fuel-efficient than over-the-road trucking.”
For more of the latest stock picks worth considering for your portfolio, check out 10 Best Undervalued Automobile Stocks to Buy Now and 10 Best Data Center Stocks To Invest In.
Disclosure: None.
