Below is the list of 5 stocks to invest in today according to billionaire Kerr Neilson’s portfolio. For a detailed discussion about Kerr Neilson’s investment philosophy and portfolio management strategies please see 10 Stocks to Invest in Today According to Billionaire Kerr Neilson.
5. Alibaba Group Holding Limited (NYSE:BABA)
Platinum Asset Management’s Stake Value: $161 million
Percentage of Platinum Asset Management’s 13F Portfolio: 4.53%
Number of Hedge Fund Holders: 116
Billionaire Kerr Neilson’s Platinum Asset Management lifted its stake in Alibaba Group Holding Limited (NYSE:BABA) by 176% during the third quarter to 4.53% of the entire portfolio. Shares of Alibaba remained under pressure over the past couple of quarters due to regulatory issues.
Palm Capital, an investment management firm, mentioned a few stocks including Alibaba in the third quarter investor letter. Here is what Palm Capital stated:
“Over the past few months, political and regulatory turmoil has caused sharp collapses in the share prices of certain Chinese companies and clients have been increasingly asking us why we don’t invest in the country.
When we’ve answered this question in the past, we’ve found it useful to use the example of Alibaba. On face value, Alibaba appears to be a phenomenal business. It is the world’s largest e-commerce company in the world’s fastest-growing major economy. The marketplaces it operates are the most highly visited in China pointing to seemingly unassailable network effect advantages. These are solidified by its substantial investments and partnerships in an unrivalled logistics network. The company also has a crucial early mover advantage in cloud computing giving it a scale advantage that may quickly take it out of reach of competitors. And relative to its growth, the share often appears to be cheap.
However, if you dig beneath the surface, the investment case becomes less clear.
Alibaba’s accounting is questionable and murky, and its disclosure is poor. The company’s corporate structure is an intricate web of over 1,200 separate entities. And a staggering 890 of these entities were formed or acquired in the three years ending 2020. A large portion of its revenue growth each year is from consolidation of acquisitions with little disclosure of just how much. Significant entities appear and disappear from the company’s disclosures from year to year with no explanation. And almost three-quarters of the company’s total retained earnings since its 2014 IPO is from asset write ups with little explanation to back these up.”
4. Micron Technology, Inc. (NASDAQ:MU)
Platinum Asset Management’s Stake Value: $248 million
Percentage of Platinum Asset Management’s 13F Portfolio: 7%
Number of Hedge Fund Holders: 63
Micron Technology, Inc. (NASDAQ:MU) is the long-running stock holding of Platinum Asset Management. The firm first initiated a stake in the company in 2012. As of the end of September, it held $248 million worth of stake in Micron.
The number of bullish hedge fund positions declined by 24 in recent months. As of the end of the September quarter, Micron Technology was in 63 hedge funds’ portfolios. Arrowstreet Capital and Baupost Group were among the leading stakeholders in the company.
3. Microchip Technology Incorporated (NASDAQ:MCHP)
Platinum Asset Management’s Stake Value: $301 million
Percentage of Platinum Asset Management’s 13F Portfolio: 8.49%
Number of Hedge Fund Holders: 41
Platinum Asset Management used the dip in Microchip Technology Incorporated (NASDAQ:MCHP) stock price as a buying opportunity. The firm lifted its existing stake in the company by 6% during the September quarter. The stock price of Microchip has rebounded in the last two months, and analysts expect it to climb further. Jefferies Financial Group increased its price target for Microchip Technology to $109.
The number of long hedge funds’ positions declined in Microchip Technology by 9 to 41 as of September. Like Platinum Asset Management, Two Sigma Advisors and Point72 Asset Management were among the leading stakeholders in the company.
2. Trip.com Group Limited (NASDAQ:TCOM)
Platinum Asset Management’s Stake Value: $319 million
Percentage of Platinum Asset Management’s 13F Portfolio: 8.98%
Number of Hedge Fund Holders: 37
Platinum Asset Management also used the dip in Trip.com Group Limited (NASDAQ:TCOM) stock price as a buying opportunity. The firm increased its existing position in Trip.com by 36% during the third quarter. Trip.com was the second-largest stock holding of billionaire Kerr Neilson’s portfolio as of September.
Oakmark Funds, an investment management firm, stated that Trip.com is a good stock to buy after the stock price dip. Here is what Oakmark Funds said about Trip.com.
“Trip.com Group ADR (China), the largest online travel agency in China, and Reckitt Benckiser Group (U.K.), a large global consumer products company, were both previous holdings in the Fund. With significant declines in share price, the stocks again offered the necessary potential upside to be selected for our portfolio.”
1. ZTO Express (Cayman) Inc. (NYSE:ZTO)
Platinum Asset Management’s Stake Value: $486 million
Percentage of Platinum Asset Management’s 13F Portfolio: 13.69%
Number of Hedge Fund Holders: 20
ZTO Express (Cayman) Inc. (NYSE:ZTO) is the largest stockholding of billionaire Kerr Neilson’s portfolio. His firm has been holding a position in the company since the end of fiscal 2017. Shares of ZTO Express remained under pressure in the last twelve months after experiencing substantial growth in the past couple of years.
Of the 867 elite funds tracked by Insider Monkey, 20 were bullish about the company as of September. Serenity Capital and Tiger Pacific Capital were among the leading stakeholders in the company.
You can also take a look at 10 Value Stocks in Joel Greenblatt’s Portfolio and 10 Dividend Stocks to Buy According to Billionaire Louis Bacon.
