In this article, we discuss the 5 best value stocks in Joel Greenblatt’s portfolio. If you want our detailed analysis of these stocks, go directly to the 10 Value Stocks in Joel Greenblatt’s Portfolio.
5. NRG Energy, Inc. (NYSE:NRG)
Gotham Asset Management’s Stake Value: $10,546,000
Percentage of Gotham Asset Management’s 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 34
P/E Ratio as of December 22: 4.16
NRG Energy, Inc. (NYSE:NRG), a Texas-based nuclear electric power generation company, is one of the best value stocks in Joel Greenblatt’s portfolio, with a price to earnings ratio of 4.16. Greenblatt, via Gotham Asset Management, owns 258,294 shares of NRG Energy, Inc. (NYSE:NRG), worth $10.54 million, representing 0.42% of the firm’s total securities as of September end.
Out of the 867 hedge funds tracked by Insider Monkey in Q3 2021, 34 funds were bullish on NRG Energy, Inc. (NYSE:NRG), with stakes amounting to approximately $2 billion. Pzena Investment Management is the largest NRG Energy, Inc. (NYSE:NRG) stakeholder, increasing its stake in the company by 16% in Q3, holding 16.4 million shares worth $673 million.
On November 4, NRG Energy, Inc. (NYSE:NRG) posted its Q3 results, announcing an EPS of $1.30, missing estimates by $1.72. The revenue equaled $6.16 billion, exceeding estimates by $2.62 billion.
4. Marathon Petroleum Corporation (NYSE:MPC)
Gotham Asset Management’s Stake Value: $11,483,000
Percentage of Gotham Asset Management’s 13F Portfolio: 0.46%
Number of Hedge Fund Holders: 43
P/E Ratio as of December 22: 4.45
Another top value stock in Joel Greenblatt’s portfolio is Marathon Petroleum Corporation (NYSE:MPC), an American petroleum refining company that deals in petroleum, petrochemicals, and gasoline. Greenblatt, via Gotham Asset Management, holds 185,779 shares of Marathon Petroleum Corporation (NYSE:MPC) as of Q3 2021, worth $11.48 million, representing 0.46% of the fund’s 13F portfolio.
On November 15, Wells Fargo analyst Roger Read raised the price target on Marathon Petroleum Corporation (NYSE:MPC) to $87 from $73 and kept an Overweight rating on the shares. In 2022, the analyst believes that the U.S. refining sector could experience a similar bullish environment as the oil and gas industries have in 2021.
Among the hedge funds tracked by Insider Monkey in Q3, 43 funds reported owning stakes in Marathon Petroleum Corporation (NYSE:MPC), down from 48 funds in the preceding quarter. Paul Singer’s Elliott Management is the largest Marathon Petroleum Corporation (NYSE:MPC) stakeholder as of September 2021, with a $653.2 million position in the company.
3. DuPont de Nemours, Inc. (NYSE:DD)
Gotham Asset Management’s Stake Value: $13,537,000
Percentage of Gotham Asset Management’s 13F Portfolio: 0.54%
Number of Hedge Fund Holders: 51
P/E Ratio as of December 22: 7.07
DuPont de Nemours, Inc. (NYSE:DD) stock represents 0.54% of Joel Greenblatt’s Q3 portfolio, with the value investor increasing his stake in the company by 4% in the third quarter. Greenblatt owns 199,106 shares of DuPont de Nemours, Inc. (NYSE:DD), worth $13.53 million.
DuPont de Nemours, Inc. (NYSE:DD) is a diversified company with multiple product lines including construction materials, fabrics and fibers, packaging materials, solar/photovoltaic materials, adhesives, resins, and water solutions, among others.
On December 20, UBS analyst John Roberts raised the price target on DuPont de Nemours, Inc. (NYSE:DD) to $102 from $98 and kept a Buy rating on the shares.
According to the Q3 database of Insider Monkey, 51 hedge funds were bullish on DuPont de Nemours, Inc. (NYSE:DD), down from 57 funds in the preceding quarter. The leading stakeholder of DuPont de Nemours, Inc. (NYSE:DD) from Q3 is 40 North Management, with 4.87 million shares worth $331.45 million.
Here is what Rhizome Partners has to say about DuPont de Nemours, Inc. (NYSE:DD) in its Q1 2021 investor letter:
“We have written extensively about the anticipated DuPont’s Reverse Morris Trust merger with International Flavors and Fragrances (IFF) in January of 2021. During the quarter, DuPont shares traded up significantly in anticipation of the deal. We tendered about 40% of our DuPont shares for IFF and received about half of the allocation due to pro-ration. Investors are finally starting to appreciate DuPont’s effort to cut costs, streamline operations, and spin off companies into pure-play companies that trade at higher multiples. We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as DuPont.”
2. Intel Corporation (NASDAQ:INTC)
Gotham Asset Management’s Stake Value: $13,737,000
Percentage of Gotham Asset Management’s 13F Portfolio: 0.55%
Number of Hedge Fund Holders: 66
P/E Ratio as of December 22: 9.84
Intel Corporation (NASDAQ:INTC) is a multinational American technology corporation which is known worldwide for producing semiconductors, microprocessors, integrated graphics processing units, motherboard chipsets, and related computer products. Joel Greenblatt, via Gotham Asset Management, owns a $13.73 million stake in Intel Corporation (NASDAQ:INTC), which represents 0.55% of the firm’s Q3 securities.
Northland analyst Gus Richard on November 1 upgraded Intel Corporation (NASDAQ:INTC) to Market Perform from Underperform with a $49 price target, stating that the company is a much needed provider of semiconductor chips, apart from Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Billion Ken Fisher’s Fisher Asset Management is the leading Intel Corporation (NASDAQ:INTC) stakeholder, with a $1.73 position in the company. Overall, according to Insider Monkey’s Q3 data, 66 hedge funds were long Intel Corporation (NASDAQ:INTC), with total stakes amounting to $6.47 billion.
Here is what Andaz Private Investments has to say about Intel Corporation (NASDAQ:INTC) in its Q3 2021 investor letter:
“Intel (INTC) is trading on a high single digit earnings multiple and is essentially: 1) an oligopolistic foundry set to benefit from large government incentives; and 2) a semiconductor business that is returning to competitiveness after years of being a laggard.”
1. eBay Inc. (NASDAQ:EBAY)
Gotham Asset Management’s Stake Value: $14,573,000
Percentage of Gotham Asset Management’s 13F Portfolio: 0.59%
Number of Hedge Fund Holders: 49
P/E Ratio as of December 22: 3.49
The best value stock from Joel Greenblatt’s Q3 portfolio is eBay Inc. (NASDAQ:EBAY), with the legendary value investor owning 209,168 eBay Inc. (NASDAQ:EBAY) shares, worth $14.57 million, representing 0.59% of his Q3 investments. eBay Inc. (NASDAQ:EBAY) is a California-based multinational e-commerce company that facilitates B2C and C2C sales transactions via its website.
A total of 49 hedge funds in the third quarter database of Insider Monkey reported owning stakes worth $2.09 billion in eBay Inc. (NASDAQ:EBAY). The largest company stakeholder from Q3 is Nicolai Tangen’s Ako Capital, with 7.35 million shares worth $512.5 million.
JPMorgan analyst Doug Anmuth reinstated coverage of eBay Inc. (NASDAQ:EBAY) on December 15 with a Neutral rating and a $70 price target, stating that eBay Inc. (NASDAQ:EBAY) has executed well to simplify its portfolio and improve margins but its product innovation efforts are just starting out, and the company cannot capitalize on that immediately.
In the third quarter earnings report, published on October 27, eBay Inc. (NASDAQ:EBAY) posted an EPS of $0.90, beating estimates by $0.02. Revenue for the quarter totaled $2.50 billion, exceeding estimates by $44.61 million.
Here is what Steel City Capital has to say about eBay Inc. (NASDAQ:EBAY) in its Q4 2020 investor letter:
“eBay (Long): EBAY continues to be a core holding in the Partnership’s long book despite not having any “sexy” attributes or unknown catalysts. I like EBAY because it checks the boxes of being both capital light and priced as a value stock (low multiple of free cash flow), factors which are attractive in a potentially inflationary environment.
In 3Q’20 the company printed $2.6 billion of revenue vs. guidance of $2.4 billion (a $200 million beat) while full year revenue guidance was taken up by $400 million, implying 4Q’20 would be higher by $200 million as well. Free cash flow from continuing ops was guided to $2.3 billion for the full year, slightly above the $2.0 billion the business regularly generated before getting a Covid/stimulus related boost.
EBAY will have about $4.6 billion of cash on hand at year end5 and should receive another $2.0 billion in after-tax proceeds this quarter related to the sale of its Classifieds portfolio6 . Additionally, the company will receive 540 million shares from Adevinta which are currently valued at ~$8.3 billion, and also holds a warrant to purchase a 5.0% stake in payment processor Adyen which was last valued at ~$775 million. Additional asset sales are also not out of the question7 . Backing everything out at today’s market cap of $38.2 billion gives a clean market cap for the core marketplace of $22.6 billion. At a minimum, I expect $2.0 billion of free cash flow in FY’21, with the potential for a higher figure to the extent the incoming administration is successful in cutting additional stimulus checks. By FY’22, free cash flow should ramp to $2.3 billion after incorporating a full year’s contribution from the managed payments initiative. This values EBAY at 9.6x free cash flow, or 11.7x excluding stock-based comp.”
You can also take a look at 10 Best High Dividend Stocks in Canada for 2022 and 10 Healthcare Dividend Stocks with Over 3% Yield.
