In this article, we discuss the top 10 stock picks of billionaire Israel Englander.
Israel Englander, one of the top hedge fund managers on Wall Street, founded Millennium Management in 1989 with only $35 million. The fund has since grown by leaps and bounds – latest 13F filings show that the fund had a portfolio of more than $163 billion at the end of the second quarter of 2021. The top holdings of the fund are concentrated in high growth domains like technology and health. The top ten stocks in terms of value comprise close to 20% of the entire portfolio. Englander has a personal net worth of over $10 billion.
Securities filings reveal that the portfolio value of Millennium Management increased by more than $24 billion between March and June this year. During this period, the fund made new purchases in 1,686 stocks, sold out of 1,066 equities, made additional purchases in 2,352 and reduced holdings in 2,163 companies. Englander manages one of the most diverse portfolios on Wall Street with hundreds of teams tasked to manage different sectors within it. Englander was seventh on the list of highest-earning hedge fund managers in 2019.
Some of the top stocks in the investment portfolio of Millennium Management at the end of the second quarter of 2021 were Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Facebook, Inc. (NASDAQ:FB), among others discussed in detail below. Under Englander, the returns of the fund in 2020 – topping 23% – outperformed the S&P 500 by more than 8 percentage points. The success of Englander has been an exception in an industry that is otherwise struggling for relevance.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Israel Englander of Millennium Management
Our Methodology
With this context in mind, here is our list of the top 10 stock picks of billionaire Israel Englander. These were picked from the investment portfolio of Millennium Management at the end of the second quarter of 2021. The list is compiled according to the value of each holding in the portfolio.
The analyst ratings of the firms are also discussed to provide readers with some more context about their investment decisions.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Billionaire Englander’s Top Stock Picks
10. Salesforce.com, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 108
Salesforce.com, Inc. (NYSE:CRM) is placed tenth on our list of top 10 stock picks of billionaire Israel Englander. The company markets enterprise cloud solutions and is headquartered in California. 13F filings reveal that Millennium Management owned 1.3 million shares in the company at the end of the second quarter of 2021 worth $338 million, representing 0.20% of the portfolio.
On September 24, investment advisory RBC Capital maintained an Outperform rating on Salesforce.com, Inc. stock and raised the price target to $325 from $310, noting that the firm was in a “market leadership” position across multiple software areas.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Salesforce.com, Inc. with 13.4 million shares worth more than $3.2 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Salesforce.com, Inc. (NYSE:CRM) was one of them. Here is what the fund said:
“We added to our software-as-a-service (SaaS) exposure with the initiation of SaaS leader salesforce.com, which develops software for customer relationship management (we added Workday, which enterprise resource planning applications, last quarter). Saleforce.com is well-positioned in the most attractive end markets in software and will benefit from secular drivers such as remote work and the digital transformation. Salesforce.com is a sustainability leader as well, with a commitment to carbon-neutral cloud, toward which it has set a goal of 100% renewable energy for global operations by fiscal year 2022. The company has a strong focus on equality, in terms of equal rights, pay, education and opportunity. As a data company it has been leading on workforce disclosures and seeks to have 50% of its U.S. workforce made up of underrepresented groups by 2024.”
9. Proofpoint, Inc. (NASDAQ:PFPT)
Number of Hedge Fund Holders: 48
Proofpoint, Inc. (NASDAQ:PFPT) is ranked ninth on our list of top 10 stock picks of billionaire Israel Englander. The company provides enterprise cloud security and is headquartered in California. Government filings show that Millennium Management owned 2 million shares in the company at the end of June 2021 worth $362 million, representing 0.22% of the portfolio.
Proofpoint, Inc. was acquired by Thoma Bravo, a leading software investment firm, at the end of August. Back in April, Thoma Bravo had agreed to purchase Proofpoint in a deal worth $12.3 billion.
Out of the hedge funds being tracked by Insider Monkey, Naples-based investment firm Pentwater Capital Management is a leading shareholder in Proofpoint, Inc. with 2.5 million shares worth more than $437 million.
8. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 71
Walmart Inc. (NYSE:WMT) is an Arkansas-based firm that engages in the operation of retail and wholesale units across the world. It is placed eighth on our list of top 10 stock picks of billionaire Israel Englander. Latest data shows that Millennium Management owned 2.6 million shares in the company at the end of the second quarter of 2021 worth $375 million, representing 0.23% of the portfolio.
On August 18, investment advisory Cowen reiterated an Outperform rating on Walmart Inc. stock and raised the price target to $175 from $170. Oliver Chen, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Walmart Inc. with 12.6 million shares worth more than $1.7 billion.
Alongside Amazon.com, Inc., Apple Inc., and Facebook, Inc., Walmart Inc. is one of the stocks that institutional investors are buying.
7. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 57
Honeywell International Inc. (NASDAQ:HON) is a North Carolina-based firm that operates as a diversified technology company. It is ranked seventh on our list of top 10 stock picks of billionaire Israel Englander. According to securities filings, Millennium Management owned 1.7 million shares in the company at the end of June 2021 worth $388 million, representing 0.23% of the portfolio.
On July 26, investment advisory Deutsche Bank maintained a Buy rating on Honeywell International Inc. stock and raised the price target to $251 from $245. Nicole DeBlase, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Honeywell International Inc., up from 56 the preceding quarter worth $1.7 billion.
Amazon.com, Inc., Apple Inc., and Facebook, Inc. are some of the top stocks to buy now, along with Honeywell International Inc..
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Honeywell International Inc. (NASDAQ:HON) was one of them. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.”
6. IHS Markit Ltd. (NYSE:INFO)
Number of Hedge Fund Holders: 61
IHS Markit Ltd. (NYSE:INFO) is placed sixth on our list of top 10 stock picks of billionaire Israel Englander. The firm provides critical information, analytics, and solutions for various industries. It is headquartered in the United Kingdom. According to the latest filings, Millennium Management owned 4.5 million shares in the company at the end of the second quarter of 2021 worth $508 million, representing 0.31% of the portfolio.
On July 15, investment advisory Deutsche Bank kept a Buy rating on IHS Markit Ltd. stock and raised the price target to $127 from $123, appreciating a new merger deal completed by the company.
At the end of the second quarter of 2021, 61 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in IHS Markit Ltd., up from 54 in the previous quarter worth $4 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and IHS Markit Ltd. (NYSE:INFO) was one of them. Here is what the fund said:
“We ended our campaign in IHS Markit. IHS Markit is a global provider of information services to the financial services, automotive and energy sectors. Since beginning our investment campaign in 2009, we have been attracted to the company’s position relative to the meaningful secular tailwind driving demand for data and analytics to help guide business decisions. The company announced in Q4 it is merging with S&P Global, one of the largest credit ratings agencies globally and a provider of benchmarks, data and analytics to the global capital and commodities markets. We believe the combination provides a good level of cost and revenue synergies which will help drive profit growth, and S&P Global has a solid track record of acquiring and integrating new businesses. However, we exited our position as the combined entity will be well beyond our mid-cap market cap mandate.”
5. Facebook, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 266
Facebook, Inc. is ranked fifth on our list of top 10 stock picks of billionaire Israel Englander. The firm operates as a technology company and is headquartered in California. 13F filings reveal that Millennium Management owned 1.6 million shares in the company at the end of the second quarter of 2021 worth $571 million, representing 0.35% of the portfolio.
On September 30, investment advisory RBC Capital initiated coverage of Facebook, Inc. stock with an Outperform rating and a price target of $425, noting the firm was positioned to “transition from a social-centric platform to a fuller source of online utility”.
At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc., up from 257 in the preceding quarter worth $40 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
4. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 146
Alibaba Group Holding Limited (NYSE:BABA) is a China-based firm that provides technology infrastructure and internet-related services. It is placed fourth on our list of top 10 stock picks of billionaire Israel Englander. Government filings show that Millennium Management owned 3.7 million shares in the company at the end of June 2021 worth $776 million, representing 0.46% of the portfolio.
On October 1, investment advisory KeyBanc maintained an Overweight rating on Alibaba Group Holding Limited stock but lowered the price target to $200 from $250. Hans Chung, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited with 14 million shares worth more than $3.2 billion.
In its Q1 2021 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and Alibaba Group Holding Limited (NYSE:BABA) was one of them. Here is what the fund said:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
3. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 55
Linde plc (NYSE:LIN) is a United Kingdom-based industrial gas company. It is ranked third on our list of top 10 stock picks of billionaire Israel Englander. Latest data shows that Millennium Management owned 2.6 million shares in the company at the end of the second quarter of 2021 worth $770 million, representing 0.47% of the portfolio.
On September 17, investment advisory Societe Generale kept a Buy rating on Linde plc (NYSE:LIN) and raised the price target to $365 from $350, noting the firm remained a top pick in the sector after outperforming peers in the second quarter.
At the end of the second quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in Linde plc (NYSE:LIN), up from 43 the preceding quarter worth $4.6 billion.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 138
Apple Inc. is placed second on our list of top 10 stock picks of billionaire Israel Englander. The firm operates as a technology company and is headquartered in California. According to securities filings, Millennium Management owned 6.9 million shares in the company at the end of June 2021 worth $995 million, representing 0.58% of the portfolio.
On September 29, investment advisory UBS maintained a Buy rating on Apple Inc. stock with a price target of $175. David Vogt, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 138 hedge funds in the database of Insider Monkey held stakes worth $145 billion in Apple Inc., up from 127 in the preceding quarter worth $131 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. is ranked first on our list of top 10 stock picks of billionaire Israel Englander. The firm operates as a diversified technology firm and is headquartered in Washington. According to the latest filings, Millennium Management owned 338,263 shares in the company at the end of the second quarter of 2021 worth $1.1 billion, representing 0.71% of the portfolio.
On September 30 investment advisory RBC Capital initiated coverage of Amazon.com, Inc. stock with an Outperform rating and a price target of $4,150, noting the firm was a “favorite” among internet picks.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. with 3.8 million shares worth more than $13 billion.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon (AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon, we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …”read the entire letter here]
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This article is originally published at Insider Monkey.
