Below we present the list of Feared Activist Investor Paul Singer’s Top 5 Stocks for 2022. For our methodology and a more comprehensive list please see Feared Activist Investor Paul Singer’s Top 10 Stocks for 2022.
5. Twitter, Inc. (NASDAQ:TWTR)
Value of Elliott Management‘s 13F Position: $387 million
Number of Hedge Fund Shareholders (as of March 31): 66
Kicking off the second half of this article is Twitter, Inc. (NASDAQ:TWTR), which Elliott Management maintained its position in during Q1, owning an even 10 million shares at both the start and end of the first quarter. Hedge fund ownership of Twitter has slumped heavily in the last year, sliding by 39%.
However, the latest hedge fund ownership data came in just before Tesla, Inc. (NASDAQ:TSLA) CEO, technology wunderkind, and free speech advocate Elon Musk declared his substantial ownership stake in Twitter, Inc. (NASDAQ:TWTR) in early April. Musk followed that up by eventually buying the social media platform outright for $44 billion in a deal that is still awaiting shareholder and regulatory approval.
It will certainly be interesting to see how Elliott reacts to Musk buying Twitter, Inc. (NASDAQ:TWTR). Elliott partnered with Egon Durban, an ally of Musk’s who heads the activist fund Silver Lake Partners, in a bid to force former Twitter CEO Jack Dorsey from his role. That initiative succeeded and Durban has remained on Twitter’s board to this day even after shareholders voted to block his re-election to the board in late May. Twitter refused to accept Durban’s resignation, vowing to checkmated shareholders that Durban would leave some of his other board positions, since that was obviously the only issue shareholders could have possibly had with him.
4. Nielsen Holdings plc (NYSE:NLSN)
Value of Elliott Management‘s 13F Position: $452 million
Number of Hedge Fund Shareholders (as of March 31): 47
There was a 74% surge in hedge fund ownership of Nielsen Holdings plc (NYSE:NLSN) during Q1 following reports in late March that the television ratings company could be taken private. Near the end of March, Nielsen did indeed agree to be taken private by an investor that included Brookfield Business Partners L.P. (NYSE:BBU) and Elliott Management affiliate Evergreen Coast Capital. For its part, Elliott Management left its stake in NLSN unchanged during Q1.
The deal will pay Nielsen Holdings plc (NYSE:NLSN) shareholders $28 per share in cash, valuing the company at $16 billion and is expected to close in the second half of this year. WindAcre Partnership, which owned nearly 10% of Nielsen at the time, was against the deal, arguing that it undervalued the company. It agreed to support the deal if it was paid $40 per share for its stake in the company, which was rejected.
Following the deal, Elliott announced that it was confident in Nielsen’s ability to remain the gold standard in measuring audience engagement across cable TV and streaming services. Nielsen Holdings plc (NYSE:NLSN) expects to grow revenue by a modest 3.5% to 4.5% in its FY2022, while adjusted earnings per share are expected to be between $1.81 and $1.91.
3. Peabody Energy Corporation (NYSE:BTU)
Value of Elliott Management‘s 13F Position: $634 million
Number of Hedge Fund Shareholders (as of March 31): 27
Peabody Energy Corporation (NYSE:BTU) is a long-term holding of Paul Singer’s, dating back to the first half of 2017. In the first quarter of 2022, the activist investor left his position in the coal miner unchanged, owning 25.9 million shares, by far the most of any of the hedge funds that are tracked by our database.
One of the 5 Best Coal Stocks To Invest In, Peabody Energy Corporation (NYSE:BTU) is benefiting from rapidly rising coal prices, which have more than tripled over the past year. Coal prices are anticipated to rise by another 25% or so by the end of the year, fueled by the growing global demand for power.
Peabody Energy Corporation (NYSE:BTU)’s coal revenue grew by 58% year-over-year in its latest quarter and could rise even higher in its next quarterly earnings report. While coal certainly isn’t a great long-term bet, there is short-term potential for further run so long as cleaner sources of energy aren’t capable of meeting the world’s power needs.
2. Marathon Petroleum Corp (NYSE:MPC)
Value of Elliott Management‘s 13F Position: $946 million
Number of Hedge Fund Shareholders (as of March 31): 44
Marathon Petroleum Corp (NYSE:MPC), which has featured prominently in Elliott Management’s 13F portfolio since mid-2019, ranks second as of March 31. Elliott raised its stake in the refiner by 5% during Q1, lifting his holding to nearly 11.1 million shares. Hedge funds have been slow to buy back into MPC after abandoning the stock in droves in 2020.
Elliott began pressuring Marathon Petroleum Corp (NYSE:MPC) shortly after building its stake in the company, asserting that shareholders would be better served financially if the company were split in three. Elliott believed as much as $22 billion in shareholder value could be unlocked through such a move, creating three strong, independent companies that would be leaders in their fields.
Marathon Petroleum Corp (NYSE:MPC) launched several strategic initiatives in October 2019, including the separation of its convenience store operations as well as forming a committee to explore options for its midstream business. The company also agreed to initiate a search for a new CEO. Michael J. Hennigan took over as CEO from Gary Heminger less than six months later.
1. Howmet Aerospace Inc. (NYSE:HWM)
Value of Elliott Management‘s 13F Position: $1.48 billion
Number of Hedge Fund Shareholders (as of March 31): 45
Elliott Management’s top stock pick for the second straight quarter is Howmet Aerospace Inc. (NYSE:HWM), which it owned over 41 million shares of as of March 31, unchanged quarter-over-quarter. Two of the top performing funds in recent memory, Ray Dalio’s Bridgewater Associates, and John Overdeck and David Siegel’s Two Sigma Advisors, each built small stakes in HWM during Q1.
Howmet Aerospace Inc. (NYSE:HWM) has been a part of Elliott’s portfolio in some capacity dating back to 2016, when he owned a stake in Arconic Corporation (NYSE:ARNC) The two sides engaged in a somewhat acrimonious tilt as Elliott sought to overthrow Arconic’s leadership. In January 2017, the company’s board came out in support of chairman and CEO Klaus Kleinfeld, asserting that many of Elliott’s allegations against the company and its leadership were either misleading or unsubstantiated. Just three months later however, Kleinfeld resigned from his roles with the company, with the backing of the board.
Howmet Aerospace Inc. (NYSE:HWM) was split off from Arconic in 2020. Elliott sold out of the remainder of its stake in ARNC in the first quarter after selling off the majority of the position in Q4. Howmet grew its adjusted earnings per share by 41% year-over-year in the first quarter. While the company’s defense aerospace growth is expected to stumble this year, the commercial transportation and industrial gas turbine markets are forecast to grow throughout 2022.
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out Hedge Funds Were Right About MicroStrategy Incorporated (MSTR) and 9 Other Tech Stocks and 10 Best Stocks to Buy in 2022 According to Billionaire Mario Gabelli.
Disclosure: None.
