Beech Hill Advisors’ Top Stock Picks for Q3; Apple Inc. (AAPL) Leads the Pack

Beech Hill Advisors LP is a hedge fund firm under the umbrella of privately-owned boutique investment advisory firm Beech Hill Advisors, led by its current President and CEO Paul Cantor. Mr. Cantor, an investment manager and portfolio strategist since 1968, is directing a team of experienced advisors and portfolio managers at the firm.

As stated in its letter to clients for the first quarter of 2016, the asset manager continues to “favor larger cash balances in accounts as a hedge against market turbulence.” Beech Hill Advisors favors higher-yielding, larger-cap companies that have healthy balance sheets and high free cash flow generation. More importantly, the New York-based investment firm’s focus remains in favor of “information technology, healthcare, and the consumer discretionary groups for consistent growth and attractive valuations.” That said, the following article will discuss the asset manager’s top equity positions as of the end of the second quarter.

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#5. Pfizer Inc. (NYSE:PFE)

 – Shares Owned by Beech Hill Advisors LP (as of June 30): 165,802

 – Value of Beech Hill Advisors LP’s Holding (as of June 30): $5.84 Million

Beech Hill Advisors LP owns 165,802 shares of Pfizer Inc. (NYSE:PFE) as of the end of the second quarter, a mere 83 shares more than it did at the end of the first quarter. The updated stake was worth $5.84 million at the end of June and accounted for approximately 4.0% of the firm’s equity portfolio. The U.S pharma giant needs to design a strategy to inject new growth after its $160 billion merger with Botox maker Allergan plc (NYSE:AGN) was blocked by freshly-imposed inversion-curbing rules from the Treasury Department. After all, the company’s net sales have been declining each year since 2011. In late June, Pfizer announced plans to invest $350 million in a biotechnology drugs plant in China, increasing its presence in the world’s second-largest pharmaceutical market. The company’s biotech center, built with the purpose of speeding up approvals for its products in China, is anticipated to be completed by 2018. Pfizer shares are up by 13% thus far in 2016. Ken Fisher’s Fisher Asset Management owns 31.72 million shares of Pfizer Inc. (NYSE:PFE) as of June 30.

#4. AT&T Inc. (NYSE:T)

 – Shares Owned by Beech Hill Advisors LP (as of June 30): 143,799

 – Value of Beech Hill Advisors LP’s Holding (as of June 30): $6.21 Million

The New York-based hedge fund trimmed its position in AT&T Inc. (NYSE:T) by 3% during the June quarter to 143,799 shares. The reshuffled position was valued at $6.21 million on June 30 and made up 4.2% of its equity portfolio. The second-largest cell phone provider and the largest pay-TV provider in the U.S has seen the value of its stock gain 24% since the start of the year. Just recently, analysts at Barclays raised their price target on AT&T to $45 from $42 and maintained their ‘Overweight’ rating on the stock. Barclays believes valuation concerns limit the upside potential for the company’s stock, as AT&T shares are currently trading near multi-year highs. However, Barclays’ analysts anticipate the telecommunications company to start working on possible earnings revisions, making the stock a “relative preferred play” in the U.S telecom services industry. Ray Carroll’s Breton Hill Capital upped its stake in AT&T Inc. (NYSE:T) by 56% during the second quarter to 21,645 shares.

The second page of this article will disclose the three-largest holdings in Beech Hill Advisors LP’s portfolio.

#3. Welltower Inc. (NYSE:HCN)

 – Shares Owned by Beech Hill Advisors LP (as of June 30): 85,905

 – Value of Beech Hill Advisors LP’s Holding (as of June 30): $6.54 Million

Beech Hill Advisors LP also reduced the size of its Welltower Inc. (NYSE:HCN) holding during the three months that ended June 30, by 6%, ending the June quarter with 85,905 shares valued at $6.54 million. The real estate investment trust (REIT) that owns senior housing and post-acute communities and outpatient medical properties has seen its market value jump by 13% in 2016. Investors are constantly on the lookout for income-paying stocks and REIT’s such as Welltower offer attractive yields for investors amid a prolonged period of extremely low interest rates. Earlier this year, Welltower’s Board increased the annual cash dividend that the company pays to $3.44 per share from $3.30 per share paid in 2015. The increased dividend payment provides a yield of 4.46% annually. The quarterly dividend paid for the first quarter represents the REIT’s 180^th consecutive quarterly dividend payment. Jim Simons’ Renaissance Technologies LLC was the owner of 2.47 million shares of Welltower Inc. (NYSE:HCN) at the end of March.

#2. Facebook Inc. (NASDAQ:FB)

 – Shares Owned by Beech Hill Advisors LP (as of June 30): 62,641

 – Value of Beech Hill Advisors LP’s Holding (as of June 30): $7.16 Million

The hedge fund firm overseen by Paul Cantor and his team had 62,641 shares of Facebook Inc. (NASDAQ:FB) in its portfolio at the end of the April-to-June quarter, 3,275 shares less than at the end of the prior quarter. The reduced stake was worth $7.16 million at the end of June. The social networking giant’s advertising revenue increased by a whopping 57% in the first quarter of 2016 to $5.2 billion, and Facebook can keep improving the monetization of its massive user base. Facebook is also one of the leading players in the multi-billion-dollar virtual reality industry after the company bought Oculus VR for more than $2 billion in March 2014. While some investors worry that Facebook may fail to keep user engagement levels up long-term, the potential of the company’s Oculus Rift VR headset has the potential to offset some of those worries, providing a new way for people to communicate. Facebook shares are 14% in the green year-to-date. Ray Carroll’s Breton Hill Capital acquired a new stake of 12,701 shares of Facebook Inc. (NASDAQ:FB) during the second quarter.

#1. Apple Inc. (NASDAQ:AAPL)

 – Shares Owned by Beech Hill Advisors LP (as of June 30): 85,724

 – Value of Beech Hill Advisors LP’s Holding (as of June 30): $8.20 Million

A position in Apple Inc. (NASDAQ:AAPL) was the largest holding in Beech Hill Advisors’ portfolio at the end of the June quarter, accounting for 5.5% of its value. The New York-based asset manager upped its Apple position by 1,415 shares during the second quarter to 85,724 shares, which were valued at $8.20 million on June 30. The world’s most valuable company has lost 5% of its market value since the beginning of the year. Although investors are worried that the iPhone maker will fail to grow its consumer base in the near future, Apple could squeeze more money out of each consumer by offering more Apple-related services. Indeed, Apple has an extremely huge and valuable consumer base, which will likely keep upgrading to newer products and continue spending more on services. However, the Cupertino-based company’s rumored iPhone 7 is not likely to attract the much-needed demand needed to revitalize declining iPhone unit sales, as an upgraded camera is one of the few features that might spur demand for the upcoming handsets. Fisher Asset Management owns 11.31 million shares of Apple Inc. (NASDAQ:AAPL) as of the end of the second quarter.

Disclosure: None