Cedar Rock Capital: Andy Brown’s Top 8 Stock Picks

Published November 11, 2021 at 7:38 am EST Updated September 7, 2026 at 1:46 pm EDT

In this article, we discuss Andy Brown’s Cedar Rock Capital’s top 8 stock picks.

Andy Brown founded Cedar Rock Capital in 2002, targeting endowments, foundations, families, and corporate pension funds as their main clientele. The London-based investment firm has a clear and dedicated strategy when it comes to investing, employing a long-only and buy-and-hold global equity strategy.

To select the best stocks for their investment portfolio, Andy Brown uses a bottom-up approach, where the criteria for companies is to have excellent management, value, and quality. Free cash flow yields are compared to long-term interest rates in order to assess the value of a company. Cedar Rock Capital prefers companies that offer high returns on investment, without added financial leverage. The firm’s conservative investment strategy means that their key criteria for success are preserving capital and mitigating losses, which is why they invest in a concentrated portfolio to realize absolute positive returns over the long run.

Andy Brown started his career at Morgan Stanley (NYSE:MS) in 1996, where his investment strategy was similar to the one he employs at Cedar Rock Capital, as the chief executive officer and portfolio manager.

As of the end of the second quarter, Cedar Rock Capital has a 13F portfolio valued at $4.39 billion, with investments concentrated in the consumer staples, consumer discretionary, information technology, and transport sectors. The largest holding in Andy Brown’s Q2 portfolio is The Procter & Gamble Company (NYSE:PG), with the firm owning stakes worth more than $1 billion in the consumer goods corporation.

Some of the notable stocks in Cedar Rock Capital’s Q2 portfolio include Starbucks Corporation (NASDAQ:SBUX), Philip Morris International Inc. (NYSE:PM), The Procter & Gamble Company, and Keurig Dr Pepper Inc. (NASDAQ:KDP), among others discussed in detail below.

Why should we pay attention to Andy Brown’s stock picks? 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 S&P 500 ETF (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.

Cedar Rock Capital: Andy Brown's Top 8 Stock Picks

Our Methodology

Let’s take a look at Andy Brown’s Cedar Rock Capital’s top 8 stock picks. We ranked each stock according to the value of each holding in Brown’s Q2 portfolio. To convey a deeper understanding of each stock, we also mentioned the number of hedge funds that hold stakes in each company as of the end of the second quarter, positive analyst ratings, and earnings for Q3.

Cedar Rock Capital: Andy Brown’s Top Stock Picks

8. Expeditors International of Washington, Inc. (NASDAQ:EXPD)

Cedar Rock Capital’s Stake Value: $202,356,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 4.6%

Number of Hedge Fund Holders: 29

Expeditors International of Washington, Inc. (NASDAQ:EXPD) is an American logistics company from Seattle, which aims to provide top-notch supply chain solutions to customers by leveraging technology. Their global network is present across 350 locations in over 100 countries. Their core services include transportation, warehousing and distribution, customs, and compliance. Expeditors International of Washington, Inc. offers air, ocean, and ground freight services to customers across fashion, healthcare, automotive and mobility, manufacturing, retail, and energy sectors. It is one of the top stocks in Andy Brown’s investment portfolio.

Cedar Rock Capital owns 1.59 billion shares in Expeditors International of Washington, Inc., worth $202.35 million, making up 4.6% of the firm’s Q2 portfolio.

At the end of June, 29 hedge funds tracked by Insider Monkey were bullish on Expeditors International of Washington, Inc., up from 21 in Q1.

Like Starbucks Corporation, Philip Morris International Inc., The Procter & Gamble Company, and Keurig Dr Pepper Inc., Expeditors International of Washington, Inc. is a top stock in Andy Brown’s Q2 portfolio.

7. The Clorox Company (NYSE:CLX)

Cedar Rock Capital’s Stake Value: $306,329,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 6.97%

Number of Hedge Fund Holders: 37

The Clorox Company (NYSE:CLX) is a multinational manufacturer of consumer staples, such as Pine-Sol cleaners, Fresh Step cat litter, Hidden Valley dressings and sauces, Brita water-filtration products, and Burt’s Bees natural personal care products, among others. The Clorox Company has many products under the CloroxPro and Clorox Healthcare brands, which are currently market leaders or hold a significant market share. The Clorox Company is a top stock in Andy Brown’s Cedar Rock Capital’s Q2 portfolio.

Cedar Rock Capital owns over $1.7 billion shares in The Clorox Company, amounting to $306.32 million, representing 6.97% of the firm’s investment portfolio.

On November 1, The Clorox Company announced earnings for the third quarter. The reported EPS was $1.21, exceeding estimates by $0.19. Similarly, the revenue at $1.18 billion also surpassed analysts’ estimates by $108.99 million.

At the end of June, 37 hedge funds reported owning stakes in The Clorox Company, down from 38 in the first quarter.

Here is what LRT Capital Management has to say about The Clorox Company in its Q1 2021 investor letter:

“For several months now, our largest position has been Clorox – the cleaning products company. Besides wipes, the company also manufactures bleach, charcoal, cat litter, plastic bags, and container products. Clorox benefited during the Covid-19 pandemic from an increased demand for cleaning products. Companies and consumers trust the Clorox brand – a source of the company’s huge competitive advantage.

United Airlines, for example, chose to partner with Clorox in its push to reassure consumers about the safety of air travel. The company is a typical “defensive” holding – subject to very small fluctuations in end market demand. Its branded consumer products remain in strong demand. Historically (pre-Covid), the company’s sales grew in line with GDP, while earnings-per-share grew slightly faster due to operational and financial leverage. We expect sales will decline slightly in the next few quarters as the Covid-19 pandemic comes to an end, but we believe this decline is more than accounted for by the company’s low valuation.

On February 4th, Clorox reported results for Q4 2020, with both earnings and sales beating estimates. Sales grew by +27% (vs. 20% estimate) from the prior year’s Q4, and EPS increased +39% ($2.03 vs. $1.75 expected). The company continues to see robust demand and raised its sales and EPS guidance for the rest of the year. Shares are down 4% year-to-date. We believe the shares are undervalued at 20x trailing and 24x forward earnings and currently represent an excellent opportunity.”

6. Keurig Dr Pepper Inc. (NASDAQ:KDP)

Cedar Rock Capital’s Stake Value: $346,398,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 7.88%

Number of Hedge Fund Holders: 28

Keurig Dr Pepper Inc. is one of the leading North American beverage companies, which was created as a result of the merger between Keurig Green Mountain and Dr Pepper Snapple Group in 2018. Keurig Dr Pepper Inc. offers an extensive range of more than 125 hot and cold beverages, targeting a massive audience. Some of the well-known brands in Keurig Dr Pepper Inc.’s product portfolio include Krispy Kreme Doughnuts, Van Houtte, Cinnabon, Gloria Jean’s Coffees, 7Up, Dr. Pepper, and Snapple, among others. Keurig Dr Pepper Inc. is one of the top stocks in Andy Brown’s Q2 portfolio.

Cedar Rock Capital owns 9.82 billion shares in Keurig Dr Pepper Inc., worth $346.39 million, making up 7.88% of the firm’s investment portfolio.

On October 28, Keurig Dr Pepper Inc. announced Q3 earnings. The EPS was $0.44, as analysts had predicted. The revenue exceeded expectations by $90.96 million at $3.25 billion.

Barclays maintained an Overweight rating on Keurig Dr Pepper Inc. on November 1, with a price target of $41.

At the end of Q2, 28 hedge funds in Insider Monkey’s database of elite funds were long Keurig Dr Pepper Inc., down from 30 in Q1.

Here is what ClearBridge Investments has to say about Keurig Dr Pepper Inc. in its Q1 2021 investor letter:

“Our underweights in health care and staples contributed to relative performance during the period. We also prefer to act with some caution in a sector where regulatory risks persist. In consumer staples, we are broadly finding valuations uncompelling and sold Keurig Dr Pepper during the quarter.”

5. Automatic Data Processing, Inc. (NASDAQ:ADP)

Cedar Rock Capital’s Stake Value: $463,626,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 10.55%

Number of Hedge Fund Holders: 41

Automatic Data Processing, Inc. (NASDAQ:ADP) is a global business solutions company, offering cloud-based solutions for modern HR, tax, benefits administration, and payroll needs. They pair technology with experience-led insights to transform the human resources function from a mundane administrative division to a tactical business advantage. Automatic Data Processing, Inc. serves small, mid-cap, and enterprise level firms across the hospitality, manufacturing, construction, retail, and healthcare industries, among others. Automatic Data Processing, Inc. is one of Andy Brown’s top stock picks for Q2.

Cedar Rock Capital owns 2.33 billion shares in Automatic Data Processing, Inc., worth $463.62 million, making up 10.55% of the firm’s investment portfolio for the second quarter.

Automatic Data Processing, Inc. announced quarterly earnings for Q3 on October 27. The reported EPS beat estimates by $0.16 at $1.65. Automatic Data Processing, Inc.’s revenue also exceeded estimated revenue by $77.99 million at $3.83 billion.

Barclays analyst Ramsey El-Assal kept an Overweight rating on Automatic Data Processing, Inc. on October 26, owing to the Q3 performance. He also raised the price target from $227 to $247.

Automatic Data Processing, Inc. is a notable stock in Brown’s Q2 portfolio, just like Starbucks Corporation, Philip Morris International Inc., The Procter & Gamble Company, and Keurig Dr Pepper Inc..

Here is what Polen Capital has to say about Automatic Data Processing, Inc. in their Q4 2020 investor letter:

“For ADP, we detail our decision to sell our position in the third quarter letter. The very high levels of unemployment in the U.S. and extremely low interest rates have negatively impacted the business in the short term. At the same time, increasing competitive intensity in the human capital management industry is creating headwinds.”

4. Starbucks Corporation (NASDAQ:SBUX)

Cedar Rock Capital’s Stake Value: $601,495,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 13.69%

Number of Hedge Fund Holders: 63

Starbucks Corporation is one of Andy Brown’s top stock picks for Q2. Starbucks Corporation is a multinational American corporation, running the largest chain of coffeehouses in the world. Starbucks Corporation is synonymous with the coffee culture in the United States, and has gained a lot of popularity from the pop culture as well. Some of the famous Starbucks Corporation drinks include Frappuccino beverages, espressos, instant coffees, and loose-leaf teas. As of 2021, Starbucks Corporation operates across 83 countries, with 33,395 coffeehouses and storefronts.

Cedar Rock Capital owns 5.37 million shares in Starbucks Corporation, valued at $601.49 million, representing 13.69% of the firm’s Q2 investment portfolio.

At the end of June, 63 hedge funds were bullish on Starbucks Corporation, up from 61 in the previous quarter.

Starbucks Corporation announced Q3 earnings on October 28, with the EPS being $1.00, as analysts had expected. The revenue missed estimates by -$77.46 million, at $8.15 billion.

Stephens analyst James Rutherford upgraded Starbucks Corporation from Equal Weight to Overweight, with a $130 price target, raised from $118 on November 1. According to Rutherford, Starbucks Corporation recently increasing labor compensation is a good strategy for long-term benefits and attaining higher market share, and anyone who believes that this is a useless expense is being short sighted. According to the Stephens analyst, it is a good time to buy the Starbucks Corporation stock.

Here is what Polen Capital has to say about Starbucks Corporation in its Q2 2021 investor letter:

“For Starbucks, we believe the underlying businesses for the company remain strong. Starbucks has grappled with the impact of the pandemic, but results have continued to show an ongoing post-pandemic recovery.”

3. Zebra Technologies Corporation (NASDAQ:ZBRA)

Cedar Rock Capital’s Stake Value: $609,472,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 13.87%

Number of Hedge Fund Holders: 34

Zebra Technologies Corporation (NASDAQ:ZBRA) is a mobile manufacturing company, which sells multiple tech products including mobile phones, tablets, printers, barcode scanners, and sales kiosks, among others. The company is also infamous for its cloud solutions, software integrations, and data analytics. Zebra Technologies Corporation serves the retail, healthcare, manufacturing, logistics, warehouse and distribution, hospitality, and energy sectors on a global level. Zebra Technologies Corporation is one of the top stocks in Cedar Rock Capital’s Q2 portfolio.

Cedar Rock Capital owns 1.15 billion shares in Zebra Technologies Corporation, valued at $609.47 million, representing 13.87% of the firm’s Q2 investment portfolio.

At the end of June, 34 hedge funds monitored by Insider Monkey reported owning stakes in Zebra Technologies Corporation, worth $1.2 billion. This is compared to 35 hedge funds in the first quarter, with a total stake value of approximately $1.16 billion.

2. Philip Morris International Inc. (NYSE:PM)

Cedar Rock Capital’s Stake Value: $846,421,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 19.26%

Number of Hedge Fund Holders: 46

Philip Morris International Inc. is one of the leading American tobacco companies, with recognized cigarette brands like Marlboro, Benson & Hedges, Bond Street, and Lark, among others. Philip Morris International Inc.’s products are distributed across 180 markets worldwide to over 150 million consumers. Philip Morris International Inc. is making a shift towards sustainability, and is working on introducing smoke-free products to replace tobacco products, which would be a healthier and less dangerous choice for consumers. Philip Morris International Inc. is a top stock in Andy Brown’s investment portfolio.

Cedar Rock Capital owns 8.54 billion shares in Philip Morris International Inc., valued at $846.42 million, making up 19.26% of the firm’s Q2 portfolio.

On October 19, Philip Morris International Inc. reported an EPS for Q3 of $1.58, beating estimates by $0.02. The revenue stood at $8.12 billion, exceeding estimates by $175.15 million.

As of the end of June, out of the 873 hedge funds tracked by Insider Monkey, 46 were long Philip Morris International Inc., down from 48 in Q1.

Here is what Broyhill Asset Management has to say about Philip Morris International Inc. in its Q2 2021 investor letter:

“Philip Morris (PM) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 23%. We shared our thoughts on these regulations during the quarter, which are available here.

‘PM Valuation. PM is up ~ 15% YTD and would have the most to gain under a nicotine cap. A cap would likely accelerate conversion to iQOS, which is 100% incremental for PM (PM also has zero exposure to combustible cigarettes in the U.S. and licenses its IQOS product for MO to distribute domestically). As such, the decline in PM was much more muted, with the stock hitting new 52 week highs a day after the Biden headline, driven by yesterday’s earnings release. It didn’t take long for investors to shift their attention back to fundamentals and the fundamentals here are best in class. In short, results beat estimates across the board (a recurring theme here), and management raised guidance for the full year (another recurring theme). IQOS continued to deliver impressive growth, recording continued market share gains on the heels of continued user acquisition growth, up 1.5M to 19.1M total users. Importantly, IQOS now represents nearly 30% of PM net revenues (management expects “smoke-free” products to represent more than half of their business by 2025, which should make the ESG folks happy), which is driving top-line growth and margin expansion. Hard to believe that they have created a product with higher margins than combustible cigarettes!! We expect PM operating margins to increase by 100bps – 200bps annually as IQOS continues to gain share. The stock trades at ~ 15x today or 2/3 of the market’s multiple for a business likely to generate $35B in cash flow – or 25% of the market cap – in just the next three years. Over the last decade, shares have traded at an average multiple of 18x and within a range of ~ 14x – 22x (+/-1 standard deviation). The stock yields 5.1% at the current price, and we expect management to resume share purchases in the back half of this year.’”

1. The Procter & Gamble Company (NYSE:PG)

Cedar Rock Capital’s Stake Value: $1,016,851,000

Percentage of Cedar Rock Capital’s 13F Portfolio: 23.14%

Number of Hedge Fund Holders: 68

The Procter & Gamble Company is the largest holding in Andy Brown’s Q2 portfolio, ranking first on our list of Cedar Rock Capital’s top stock picks. The American consumer goods corporation offers personal hygiene, family care, home care, and baby products. Some of the most famous brands in The Procter & Gamble Company’s product portfolio include Ariel laundry detergent, Always sanitary pads, Gillette razors, Head & Shoulders, Febreze fabric softener, Pampers, and Vicks, among several other internationally recognized brands.

Cedar Rock Capital owns 7.53 billion shares worth over $1 billion in The Procter & Gamble Company, representing 23.14% of the firm’s investment portfolio for Q2.

On October 19, the Q3 EPS for The Procter & Gamble Company was $1.61, beating estimates by $0.02. The revenue was $20.34 billion, exceeding estimates by $445.19 million.

At the end of the second quarter, 68 hedge funds were long The Procter & Gamble Company, down from 70 in Q1.

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