Billionaire Bruce Kovner’s Caxton Associates’ Favorite Stock Picks: Kraft Heinz Co (KHC), Monster Beverage Corporation (MNST) & More

Bruce Kovner is one of the most prominent hedge managers in the U.S. Kovner began his career as a trader working under Michael Marcus at Commodities Corporation, which is now part of the Goldman Sachs Group Inc. (NYSE:GS). In 1983, he established his own hedge fund Caxton Associates. Caxton was closed to new investors on several occasions, including in 1992. The fund last reopened to new investors in 2013, however, by that time Kovner left the fund. ovner now serves as Chairman of CAM Capital through which he manages his investments.  Caxton was one of the few funds that generated solid returns even during the financial crisis of 2008. The fund generated returns of 13% in what turned out to be one of the worst years for financial markets.

According to Caxton’s latest 13F filing, the fund had an equity portfolio worth $3.62 billion at the end of the second quarter, significantly higher compared to $1.41 billion reported a quarter earlier. The filing also showed that 27% of Caxton’s portfolio was represented by the Financial sector, which was followed Materials and Consumer Staples stocks, which amassed 25% and 21% of the portfolio, respectively. In this article, we will take a look at five stocks, in which Caxton held the largest stakes heading into the third quarter

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Let’s start with Raytheon Company (NYSE:RTN), in which Caxton held 375,200 shares worth $51 million at the end of June. Caxton added 355,200 shares of Raytheon Company during the second quarter. A total of 38 funds from our database held $1.05 billion worth of Raytheon shares at the end of the last quarter, down from 42 funds with stakes worth $1.44 billion in aggregate at the end of March. Last month, Raytheon was awarded a $37.7 million US Navy contract for the procurement of MK 54 lightweight torpedo common parts kits, MK 54 Mod 0 lightweight torpedo kits, and MK 54 exercise fuel tanks, spares, production support material, engineering support, and hardware repair support.

One of Consumer Staples stocks in Caxton’s portfolio is Molson Coors Brewing Co. (NYSE:TAP).  At the end of the second quarter quarter, Caxton owned 537,600 shares of the company valued at $54.36 million. The position was boosted by  417,600 shares over the quarter. Among the funds we track, 57 were long Molson Coors, holding approximately $2.88 billion worth of stock, compared to 52 funds holding $2.71 billion worth of shares a quarter earlier. Year-to-date, the stock has generated returns of more than 10% and currently offers a dividend yield of 1.58%. Molson Coors reported its second-quarter results last month, posting earnings of $1.11 per share, in-line with the Street estimates, while revenue for the quarter came in at $986.2 million, beating the  consensus estimate by $24.1 million.

Read about Caxton Associates’ three other favorite stocks on the next page.

Gold mining stocks have had an excellent run this year and not surprisingly one of the biggest mining companies finds a place in Caxton’s portfolio. Caxton had exposure to Barrick Gold Corporation (USA) (NYSE:ABX) through stocks and call options, according to its most recent 13F filing. During the second quarter, the fund trimmed its long position in Barrick Gold by 35% to 7.60 million shares worth $162.3 million. In addition, the investor held ‘Call’ options underlying some 15.20 million shares. A total of 53 funds from our database were long Barrick Gold at the end of June, up from 49 a quarter earlier, while the value of their holdings surged to $3.83 billion from $2.73 billion during the quarter and represented 15.40% of Barrick Gold’s float at the end of June. Barrick Gold suffered a setback this week as the Argentinian government temporarily suspended operations at its Veladero gold mine in order to inspect the heap leach area following the spilling of a solution that contained cyanide. A similar spill in September last year also led to operations being temporarily suspended at the mine. Barrick Gold was fined $9 million for the spill by a provincial court in Argentina last year.

Another of Caxton’s major holdings in the Consumer Staples space at the end of the June quarter was Monster Beverage Corporation (NASDAQ:MNST), in which the investor held 1.37 million shares, worth $220.65 million; the fund added 382,000 shares to the position during the second quarter. A total of 33 funds tracked by us amassed shares of Monster Beverage worth $1.55 billion in aggregate at the end of June, compared to 31 funds holding $1.02 billion worth of stock a quarter value. Monster Beverage reported second-quarter earnings of $0.99 per share, missing consensus estimate of $1.03 per share, while its revenue of $827.49 million topped the expectations by $23.25 million.

Kraft Heinz Co (NASDAQ:KHC) was one of Caxton’s biggest holdings at the end of the second quarter, as the $321 million position amassed 8.85% of the fund’s total equity portfolio. The fund held 3.63 million shares at the end of June, up by 431,230 shares over the quarter. Among the funds in our database, 60 held $31.28 billion worth of Kraft Heinz shares at the end of June, which equals to 29.10% of the outstanding stock. Kraft Heinz’s stock has returned more than 22% so far this year and currently sports a healthy dividend yield of 2.70%. Last month, Kraft Heinz reported its second-quarter financial results, posting earnings of $0.85 per share on revenue of $6.79 billion, compared to analysts’ estimates of earnings of $0.79 per share on revenue of $6.79 billion.

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