Billionaire Steve Cohen and Insiders Are Buying These 10 Stocks

Published on March 20, 2024 at 1:32 pm by Fahad Saleem in Hedge Funds, Insider Trading, News

In this article, we will take a detailed look at the Billionaire Steve Cohen and Insiders Are Buying These 10 Stocks. For a quick overview of such stocks, read our article Billionaire Steve Cohen and Insiders Are Buying These 5 Stocks.

Investors are holding their breath ahead of the key Fed decision about interest rates. While analysts expect the central bank to keep interest rates unchanged, the biggest question is whether we are in for a higher for longer scenario where interest rates would remain elevated for several more months because of the sticky inflation problem. However, the Federal Reserve cannot postpone rates cuts for too long because doing so could tip the economy into recession. Some analyst firms also believe that irrespective of the outcome of today’s Fed meeting, stocks are expected to take a breather in the short term.

Piper Sandler recently said in a note that the current “four-and-a-half-month bull market” needs a “break.” Piper Sandler does not see a market correction; it’s simply expecting a “consolidation” that could create further buying opportunities for investors.

In this backdrop, we are taking a look at some of the stocks that are bought by billionaire Steve Cohen as well as corporate insiders.

Billionaire Steve Cohen’s Point72 Asset Management is one of the few hedge funds that continues to impress the Wall Street despite rising rates and overall tough environment in the investing world. Bloomberg recently reported that after having raised about $3.2 billion last year, the hedge fund is now turning away new investors to focus more on its existing clients. The report said Point72 Asset Management had a whopping $32.3 billion in assets under management when 2024 started. The fund reportedly gained about 11% last year.

Methodology

For this article we first scanned Point72 Asset Management’s Q4’2023 portfolio and picked 10 stocks that saw heavy insider buying activity over the past one year. We used Insider Monkey’s insider trading stock screener to find the stocks with insider purchases. Some top names in the list include Gates Industrial Corporation PLC (NYSE:GTES), Exxon Mobil Corp (NYS:XOM) and Coinbase Global Inc (NASDAQ:COIN). But why is it important to keep tabs on hedge fund and insider activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

10. Larimar Therapeutics Inc. (NASDAQ:LRMR)

Steve Cohen’s Stake: $2,049,320

Larimar Therapeutics Inc (NASDAQ:LRMR) ranks tenth in our list of the stocks both billionaire Steve Cohen and insiders are buying. James E. Flynn, who is a director by deputization and a 10% stake owner at Larimar Therapeutics Inc (NASDAQ:LRMR), snapped up 4,290,617 shares of Larimar Therapeutics Inc (NASDAQ:LRMR) on February 16, 2024, at $8.74 per share. Since then through March 20 the stock has lost about 32% in value.

As of the end of the fourth quarter of 2023, Steve Cohen’s hedge fund reported owning a $2 million stake in Larimar Therapeutics Inc (NASDAQ:LRMR). Overall, 14 hedge funds tracked by Insider Monkey have stakes in Larimar Therapeutics Inc (NASDAQ:LRMR).

9. Akero Therapeutics Inc (NASDAQ:AKRO)

Steve Cohen’s Stake: $15,044,522

Akero Therapeutics Inc (NASDAQ:AKRO) is one of the top stocks in Steve Cohen’s portfolio that insiders are also buying. As of the end of the fourth quarter of 2023, Point72 Asset Management had a $15 million stake in Akero Therapeutics Inc (NASDAQ:AKRO).

Graham Walmsley, a director at Akero Therapeutics Inc (NASDAQ:AKRO) board, on September 19, 2023, bought 520,000 shares of Akero Therapeutics Inc (NASDAQ:AKRO) at $29.69 per share. Since then the stock has lost about 50% in value.

Like AKRO, insiders and hedge funds also like Gates Industrial Corporation PLC (NYSE:GTES), Exxon Mobil Corp (NYS:XOM) and Coinbase Global Inc (NASDAQ:COIN).

8. Lucid Group Inc. (NASDAQ:LCID)

Steve Cohen’s Stake: $10,351,203

Steve Cohen owns a $10.3 million stake in Lucid Group Inc (NASDAQ:LCID) as of the end of the fourth quarter of 2023. On June 22, 2023, Public Investment Fund, which has a director and 10% stake owner status at Lucid Group Inc (NASDAQ:LCID), bought 265,693,703 shares of Lucid Group Inc (NASDAQ:LCID) at $6.83 per share. The stock has seen a bloodbath since then, having lost about 55% in value.

As of the end of the fourth quarter of 2023, 21 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Lucid Group Inc (NASDAQ:LCID).

During Q4 earnings call Lucid management talked about guidance and other business updates:

“We have been able to consistently sustain a strong balance sheet over time. And as we have done for the last couple of years, we will continue to be opportunistic in exploring and diversifying access to financing sources. Accounts receivable increased to $51.8 million in the fourth quarter, up sequentially from $23.4 million in the third quarter. The increase was primarily due to vehicle sales related to EV purchase agreements with the government of Saudi Arabia, and you can expect that this mix could result in fluctuations on a quarter-to-quarter basis. Turning to inventory. Total inventory decreased 12.9% sequentially primarily due to raw material drawdown.

We continue to see a box to a significant reduction in raw material days of inventory on hand as we work towards greater predictability in the transportation channel and refine our inventory management processes and systems. Capital expenditures for 2023 was $910.6 million, slightly below the $1 billion to $1.1 billion range we guided to on our third quarter earnings conference call. The lower CapEx was primarily related to developed projects into 2024. CapEx in the fourth quarter was $272.6 million, up from $192.5 million in Q3. Moving to the outlook for 2024. We forecast production of approximately 9,000 vehicles in 2024, and we’ll continue to prudently manage and adjust our production to meet our sales and delivery needs.”

Read the full earnings call transcript here.

7. Instacart (NASDAQ:CART)

Steve Cohen’s Stake: $21,402,293

Instacart (NASDAQ:CART), now Maplebear Inc., is one of the stocks that is on the radar of both billionaire Steve Cohen and corporate insiders. Point72 Asset Management owns a $21.4 million stake in Instacart (NASDAQ:CART) as of the end of the fourth quarter of 2023. Ravi Gupta, a director at Instacart’s (NASDAQ:CART) board, on February 20 this year, loaded up on over two million shares of the company at $28.54 per share. The stock has jumped by about 33% since then.

As of the end of the fourth quarter of 2023, 38 hedge funds out of the 933 funds in Insider Monkey’s database were long Instacart (NASDAQ:CART). The most significant stake in Instacart (NASDAQ:CART) is owned by Daniel Sundheim’s D1 Capital Partners which owns a $678 million stake in Instacart (NASDAQ:CART).

In addition to CART, Steve Cohen also likes Gates Industrial Corporation PLC (NYSE:GTES), Exxon Mobil Corp (NYS:XOM) and Coinbase Global Inc (NASDAQ:COIN).

Last month, during the fourth quarter earnings call, the company talked about important business updates:

“2023 was a transformational year across our product, operations and financials. In Q4, we once again accelerated GTV growth and expanded profitability, all while investing in new initiatives to support our future growth. Let me provide a bit more color on our Q4 results and our future outlook, starting with GTV and orders. In Q4, we delivered GTV of $7.9 billion, up 7% year-over-year and above the high end of our guidance range. This outperformance was largely driven by stronger than expected orders growth, especially around the holidays. Our strong Q4 results generated positive momentum for us to start 2024. In Q1, we expect GTV to be $8 billion to $8.2 billion, representing year-over-year growth of 7% to 10% and our fourth consecutive quarter of accelerating GTV growth.

While our business is typically strongest in Q4 and Q1 due to seasonality, and while this year, we have the benefit of leap day in Q1, even after accounting for both of these factors, we expect an encouraging step-up in our anticipated growth compared to the 5% growth we delivered for full year 2023. Now, on transaction revenue. In Q4, transaction revenue was 7.1% of GTV compared to 7.2% in Q3 2023 and Q4 2022. While we continue to drive fulfillment efficiencies, in Q4, we found more opportunities to invest in consumer incentives, and these hit contra revenue instead of marketing spend, which hits marketing expense. Incentives allow us to better target behaviors that we believe will lead to stronger customer acquisition, resurrection and habituation.

Next, for advertising and other revenue. In Q4, ad and other revenue was up 7% year-over-year, in line with our expectations and in Q1, we expect year-over-year growth for ad and other revenue to be largely in line with Q4 2023. It’s important to remember that advertising growth lags GTV growth, so while many of our brand partners are excited by our ongoing acceleration of GTV growth, it will take time before this is reflected in ad and other revenue. Turning to adjusted operating expenses. We generated strong operating leverage in Q4, with adjusted operating expense as a percent of GTV decreasing to 5.3% compared to 6.1% in Q4 2022. Today, we also announced a restructuring plan, which we expect to result in a onetime charge of $19 million to $24 million.”

Read the full earnings call transcript here.

6. Coinbase Global Inc. (NASDAQ:COIN)

Steve Cohen’s Stake: $27,605,974

Point72 Asset Management has been enjoying gains from its $27.6 million stake in Coinbase Global Inc (NASDAQ:COIN) in 2024, since the stock is up by about 46% so far in the period through March 20, thanks to the massive bull run in the crypto markets. On May 9, 2023, Fred Ehrsam, the co-founder of Coinbase Global Inc (NASDAQ:COIN), who also sits on Coinbase Global Inc’s (NASDAQ:COIN) board, amassed 810,000 COIN shares for $61.77 per share. Since then through March 20 the stock has gained a massive 282%.

As of the end of the fourth quarter of 2023, 41 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Coinbase Global Inc (NASDAQ:COIN). The biggest hedge fund stakeholder of Coinbase Global Inc (NASDAQ:COIN) during this period was ARK Investment Management of Catherine D. Wood which owns a $1.5 billion stake in Coinbase Global Inc (NASDAQ:COIN).

Patient Capital Management stated the following regarding Coinbase Global, Inc. (NASDAQ:COIN) in its fourth quarter 2023 investor letter:

“Coinbase Global, Inc. (NASDAQ:COIN) climbed an incredible 131.7% in the quarter outpacing the 57% gain in bitcoin over the same period as investors became excited about the potential approval of a Bitcoin ETF in the new year. Coinbase continues to stand out as the lead survivor in an industry of fading and failing leaders. Cost savings initiatives taken earlier in the year have resulted in three quarters of positive EBITDA leading to expectations for “meaningful positive adjusted EBITDA” for the full year 2023. We continue to believe COIN has the potential to be the platform for crypto with $5B in liquidity providing the ability to invest and weather any crypto winters.”

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Disclosure. None. Billionaire Steve Cohen and Insiders Are Buying These 10 Stocks was initially published on Insider Monkey.

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Published on May 1, 2024 at by Inan Dogan, PhD

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