In this article, we will take a look at the 10 stocks that billionaire Rob Citrone is buying. To skip our analysis of Rob Citrone’s profile, investment strategy, and 13F holdings, you can go directly to see Billionaire Rob Citrone is Buying These 5 Stocks.
In 1999, Rob Citrone established Discovery Capital Management. His hedge fund typically invests in emerging markets and places macro bets. His Discovery Global Macro Fund made a 9% gain in 2016, ending a two-year losing streak. In high school, Citrone competed in wrestling. Today, he owns a little portion of his favorite football team, the Pittsburgh Steelers.
Rob Citrone, a seasoned hedge fund manager best known for his expertise in macro trading during his two decades at Discovery Capital Management, made tremendous gains from his Bitcoin bets last year. He revealed to investors that he sold his Bitcoin when its price soared to $45,000 from his initial investment of $15,000 at a conference, reported Bloomberg. Also, earlier this year, in January, Discovery Capital Management increased its value by 4% in a month of market volatility, making it one of the few hedge funds to do so. According to Bloomberg, Rob Citrone’s $2.4 billion macro business gained from the switch from growth stocks to value. The portfolio of the fund was set up to withstand a hawkish Federal Reserve. According to the source, it made money off of shorting growth stocks, making long bets in emerging economies, and betting on the energy industry and unique circumstances.
Discovery Capital Investors’ Portfolio
Discovery Capital Management has 22 clients and $3.746 billion in discretionary assets under management. The firm disclosed $776.016 million in managed 13F securities in their most recent 13F filing for Q2 2022, with a top 10 holdings concentration of 62.55%. Hertz Global Holdings, Inc. (NASDAQ:HTZ) is the largest position of Discovery Capital Management, with a total of 6.618 million shares. The energy sector comprises 23.69% of 13F portfolio.
Our Methodology
These stocks were picked from the second quarter 2022 13F portfolio of Discovery Capital Management. We picked the stocks in which the hedge fund initiated new stakes during Q2. The hedge fund sentiment around each stock was taken from Insider Monkey’s Q2 database of 895 elite hedge funds.
Billionaire Rob Citrone is Buying These 10 Stocks
10. Cheniere Energy, Inc. (NYSE:LNG)
Discovery Capital Management’s Stake Value: $4.922 million
Percentage of Discovery Capital Management’s 13F Portfolio: 0.63%
Number of Hedge Fund Holders: 65
Cheniere Energy, Inc. (NYSE:LNG) was established in 1983 and has its corporate headquarters in Houston, Texas. Energy infrastructure firm Cheniere Energy, Inc. principally operates in the United States in businesses related to liquefied natural gas (LNG). By the end of Q2, a total of 65 hedge funds tracked by Insider Monkey are holding a stake in Cheniere Energy, Inc. (NYSE:LNG) as compared to 62 in the previous quarter.
On September 15, Morgan Stanley analyst Devin McDermott increased his price target on Cheniere Energy, Inc. (NYSE:LNG) to $203 from $154 and maintained an Overweight rating on the shares. This upward revision came after Cheniere Energy, Inc. (NYSE:LNG) increased its 2022 EBITDA guidance by 12%, increased the dividend by 20%, increased the buyback by $4 billion, and lowered its leverage target. After updating his own projections, McDermott said that he now sees more room for consensus growth and a road to a share price of over $200.
ClearBridge Global Infrastructure Value Strategy, in its Q3 2021 investor letter, mentioned Cheniere Energy, Inc. (NYSE: LNG) and discussed its stance on the firm. Here is what the fund said:
“Cheniere Energy is an energy infrastructure company that owns and operates U.S. liquefied natural gas (LNG) export facilities. Strong quarterly results and the disclosure of capital allocation policies were positively received by the markets. In addition, continued supply and demand tightness in the LNG market created a favorable commodity price environment.”
09. WideOpenWest, Inc. (NYSE:WOW)
Discovery Capital Management’s Stake Value: $5.582 million
Percentage of Discovery Capital Management’s 13F Portfolio: 0.71%
Number of Hedge Fund Holders: 21
Based in Englewood, Colorado, WideOpenWest, Inc. (NYSE:WOW) was established in 2001. It offers cable television, digital telephony, and high-speed data services to home and commercial users in the US. It has a market capitalization of $1.38 billion as of September 19.
Discovery Capital initiated its stake in WideOpenWest, Inc. (NYSE:WOW) during the current quarter, acquiring 306,535 of its shares worth roughly $5.582 million. The company announced its quarterly earnings results on August 5, reporting an EPS GAAP actual of $0.05 and actual revenue of $176.01 million, both below Wall Street expectations. The stock has lost 13.56% value year to date.
On August 8, following the release of the Q2 data, B. Riley analyst Daniel Day maintained a Buy rating on WideOpenWest, Inc. (NYSE:WOW) while lowering his price target for the stock from $26.50 to $25. Day writes in a research note to investors that WideOpenWest, Inc. (NYSE:WOW) “strong” quarter, in which it added net broadband subscribers while larger competitors lost subscribers, shows the relative appeal of its suburban regions and increases the likelihood of a takeover agreement in the near future.
08. Verisign, Inc. (NASDAQ:VRSN)
Discovery Capital Management’s Stake Value: $6.191 million
Percentage of Discovery Capital Management’s 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 35
Reston, Virginia serves as the corporate headquarters for Verisign, Inc. (NASDAQ:VRSN), which was founded in 1995. Together with its subsidiaries, Verisign, Inc. (NASDAQ:VRSN) offers domain name registration services and internet infrastructure that facilitates internet access for a number of well-known domain names across the globe.
Verisign, Inc. (NASDAQ:VRSN) reported Q2 revenue of $352 million, beating the estimate of $348.8 million. Verisign completed the second quarter of 2022 with 174.3 million .com and .net domain name registrations in the domain name base with a 2.2 percent increase from the end of the second quarter of 2021 and a net reduction of 0.35 million domain names during the second quarter of 2022. Verisign processed 10.1 million new .com and .net domain name registrations in the second quarter of 2022, down from 11.7 million in the same period of 2021.
The number of hedge funds holding a stake in Verisign, Inc. (NASDAQ:VRSN) has reduced to 35 in the current quarter as compared to 41 in the previous quarter.
07. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI)
Discovery Capital Management’s Stake Value: $6.249 million
Percentage of Discovery Capital Management’s 13F Portfolio: 0.8%
Number of Hedge Fund Holders: 18
The headquarters of Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), a media organization, is in Hunt Valley, Maryland, where it was established in 1986. The company has a market capitalization of $1.52 billion as of September 20. On August 3, Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) reported Q2 revenue of $837 million, missing the consensus $839.55 million figure.
Out of the 895 elite hedge funds tracked by Insider Monkey, Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) was in 18 hedge funds’ portfolios at the end of Q2. Their total stake is worth roughly $307.916 million. Parag Vora’s HG Vora Capital Management is the largest shareholder of Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), holding 4.75 million of its shares worth roughly $96.9 million.
06. Freshpet, Inc. (NASDAQ:FRPT)
Discovery Capital Management’s Stake Value: $6.486 million
Percentage of Discovery Capital Management’s 13F Portfolio: 0.83%
Number of Hedge Fund Holders: 23
Freshpet, Inc. (NASDAQ:FRPT) is a Secaucus, New Jersey-based pet food company with a $1.95 billion market capitalization. Freshpet, Inc. (NASDAQ:FRPT) fell 57.07% since the beginning of the year, while its 12-month returns are down by 71.95%. Freshpet, Inc. (NASDAQ:FRPT) announced its quarterly earnings results on August 8. It reported EPS GAAP actual of -$0.45, missing estimates by $0.31. Also, the revenue figure of $146.01 million missed the estimates by $1.88 million.
Following the company’s announcement of organizational changes and an update to its guidance, Truist analyst Bill Chappell on September 8 downgraded Freshpet, Inc. (NASDAQ:FRPT) from Buy to Hold and lowered its price target from $70 to $40. The analyst tells investors in a research note that while he is not concerned about the CFO transfer or Freshpet, Inc. (NASDAQ:FRPT) “choppy” performance during the previous year. He is anxious about the company’s modified EBITDA estimate for 2022, which called for 75% of second-half EBITDA to fall in Q4. In order to fulfill its FY22 estimate, Freshpet, Inc. (NASDAQ:FRPT) has stated that it will reduce marketing spending. This creates a significant overhang for the stock that will remain at least until Q4 data is out, Chappell adds.
Wasatch Small Cap Growth Fund, in its Q4 2021 investor letter, mentioned Freshpet, Inc. (NASDAQ: FRPT) and discussed its stance on the firm. Here is what the fund said:
“The greatest detractor from Fund performance for the fourth quarter was Freshpet, Inc. (FRPT). The company is the undisputed leader in refrigerated pet food, which we consider a “growth staple.” People seem willing to prioritize the health of their pets under almost any circumstances. Having said that, the stock was down because the company lowered projections for sales and earnings due to rising costs and shortages of labor and materials. Supply-chain challenges have also disrupted Freshpet’s ability to expand manufacturing capacity and get food into stores. Marketing activities have been curtailed because the company is having trouble meeting existing demand. We take some comfort in the fact that Freshpet’s difficulties are supply-related rather than demandrelated. Over time, we believe that supply-chain challenges will be resolved and that Freshpet will resume its growth trajectory. In terms of competition, there are some smaller players that are trying to challenge Freshpet’s dominant brand name and footprint in stores. But we think those smaller players are even more vulnerable to today’s supplychain challenges. In fact, the current difficult environment may actually strengthen Freshpet’s competitive position and help make the company even more dominant over time. Additionally, we think Freshpet’s pricing power and margins will improve substantially as the company becomes larger.”
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Disclosure: None. Billionaire Rob Citrone is Buying These 10 Stocks is originally published on Insider Monkey.