Harvard University Stock Portfolio: Top 5 Picks

In this article, we discuss the top 5 picks of the Harvard University stock portfolio. If you want to see more stocks in this selection, check out Harvard University Stock Portfolio: Top 10 Picks. 

5. EQRx, Inc. (NASDAQ:EQRX)

Harvard Management Company’s Stake Value: $24,680,000

Number of Hedge Fund Holders: 26

EQRx, Inc. (NASDAQ:EQRX) is a Massachusetts-based pharmaceutical company, specializing in developing medicines for oncology and immune-inflammatory diseases in the United States. Securities filings for Q2 2022 reveal that Harvard University stock portfolio held 5.2 million shares of EQRx, Inc. (NASDAQ:EQRX) worth $24.6 million.

On August 16, JPMorgan analyst Chris Schott initiated coverage of EQRx, Inc. (NASDAQ:EQRX) with a Neutral rating and a $5.50 price target. EQRx, Inc. (NASDAQ:EQRX) wants to deliver new medicines to patients at “radically lower prices” by targeting known mechanisms of action and collaborating with payers to increase usage, the analyst noted. While the company’s goals “clearly address a significant unmet need in the drug space,” he believes the business model is still at a relatively early stage of development and there are many unknowns that are unlikely to be addressed in the short-term, the analyst told investors.

According to Insider Monkey’s data, 26 hedge funds were long EQRx, Inc. (NASDAQ:EQRX) at the end of the second quarter of 2022, compared to 38 funds in the preceding quarter. 

4. AbCellera Biologics Inc. (NASDAQ:ABCL)

Harvard Management Company’s Stake Value: $43,719,000

Number of Hedge Fund Holders: 17

AbCellera Biologics Inc. (NASDAQ:ABCL) is headquartered in Vancouver, Canada, and the company operates an AI-powered antibody discovery platform. Harvard University stock portfolio features 4.10 million shares of AbCellera Biologics Inc. (NASDAQ:ABCL) as of Q2 2022, worth $43.7 million and representing 5.06% of the total holdings. The stock has been part of the Harvard portfolio since Q4 2020. 

On August 10, Credit Suisse analyst Tiago Fauth maintained an Outperform rating on AbCellera Biologics Inc. (NASDAQ:ABCL) but lowered the price target on the shares to $34 from $40 following the Q2 results. The analyst observed that the company added six programs under contract and initiated discovery on four additional programs, bringing the cumulative program stats to 88. This represents a robust 47% year-over-year growth. However, there is some quarter-over-quarter variability across these metrics, the analyst added. 

According to Insider Monkey’s data, 17 hedge funds were bullish on AbCellera Biologics Inc. (NASDAQ:ABCL) at the end of June 2022, with combined stakes worth $320.5 million. Julian Baker and Felix Baker’s Baker Bros. Advisors is the largest stakeholder of the company, with 10.45 million shares valued at $111.3 million. 

3. Light & Wonder, Inc. (NASDAQ:LNW)

Harvard Management Company’s Stake Value: $125,866,000

Number of Hedge Fund Holders: 27

Light & Wonder, Inc. (NASDAQ:LNW) was incorporated in 1984 and is based in Las Vegas, Nevada. The company provides technology-based products, services, and content for the gaming, lottery, social, and digital gaming industries in the United States and internationally. In Q2 2022, Harvard Management Company owned 2.6 million Light & Wonder, Inc. (NASDAQ:LNW) shares worth $125.8 million, representing 14.57% of the total holdings. 

On October 6, Light & Wonder, Inc. (NASDAQ:LNW) announced that it had acquired all assets of House Advantage, a company that develops loyalty solutions for the gaming and hospitality industries, in a cash deal. The acquisition strengthens Light & Wonder, Inc. (NASDAQ:LNW)’s systems business with differentiated omni-channel player loyalty solutions.

Craig-Hallum analyst Ryan Sigdahl on August 10 maintained a Buy rating on Light & Wonder, Inc. (NASDAQ:LNW) but slashed the price target on the shares to $90 from $105 to reflect multiple compression amongst the peer group.

According to Insider Monkey’s data, 27 hedge funds were bullish on Light & Wonder, Inc. (NASDAQ:LNW) at the end of June 2022, compared to 34 funds in the last quarter. Debra Fine’s Fine Capital Partners is the biggest position holder in the company, with 9.5 million shares worth $445.4 million. 

2. Meta Platforms, Inc. (NASDAQ:META)

Harvard Management Company’s Stake Value: $183,166,000

Number of Hedge Fund Holders: 184

The Harvard University stock portfolio had 1.13 million shares of Meta Platforms, Inc. (NASDAQ:META) in the second quarter of 2022, worth over $183 million and representing 21.2% of the total 13F securities. The hedge fund trimmed its Meta stake by 8% during the June quarter. 

The company disclosed a mixed third-quarter earnings report, with the revenue topping market expectations, whereas profits lagged amid warnings of short-term sales challenges. CEO Mark Zuckerberg, however, assured investors that the company will focus on efficiency in 2023 to return to stronger revenue growth. 

On October 28, Edward Jones analyst David Heger downgraded Meta Platforms, Inc. (NASDAQ:META) to Hold from Buy following the Q3 earnings report. While the company is executing relatively well in the tough macroeconomic backdrop and continues to steadily grow users across its platforms, the analyst is worried about how long the steep metaverse investment will take to deliver a significant return. 

According to Insider Monkey’s data, 184 funds were long Meta Platforms, Inc. (NASDAQ:META) at the end of June 2022, down from 200 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management owned a prominent position in the company, consisting of 11.5 million shares worth $1.86 billion. 

Here is what Weitz Investment specifically said about Meta Platforms, Inc. (NASDAQ:META) in its Q3 2022 investor letter:

“Facebook parent Meta Platforms, Inc. (NASDAQ:META) was the portfolio’s top year-to-date detractor. Fears of a recession and a resultant pullback in ad spending have added insult to injury as Meta attempts to gain traction with its short-form video product called Reels. Meta’s progress in monetizing Reels and the heavyweight bout with video-sharing app TikTok for consumers’ attention are clearly the main event, but we are also encouraged that, behind the scenes, management is taking a more disciplined approach to investing and expense management. Investors looking for greater detail on Meta are encouraged to read equity analyst Jon Baker’s Analyst Corner feature from earlier this year.”

1. Alphabet Inc. (NASDAQ:GOOG)

Harvard Management Company’s Stake Value: $262,769,000

Number of Hedge Fund Holders: 153

Alphabet Inc. (NASDAQ:GOOG) has been part of the Harvard University stock portfolio since Q2 2018, with minor breaks over the years. In Q2 2022, the hedge fund boosted its Alphabet Inc. (NASDAQ:GOOG) stake by 39%, holding 2.4 million shares worth $262.7 million and representing 30.42% of the total 13F securities. 

On October 27, Alphabet Inc. (NASDAQ:GOOG) announced that it has introduced a Blockchain Node Engine (“BNE”) based on Google Cloud for Ethereum projects, in a bid to enhance its presence in the web3 space. Ethereum will be the first blockchain supported by BNE. Using BNE, web3 firms can perform transactions, deploy smart contracts, and read or write blockchain data directly on Google Cloud.

Oppenheimer analyst Jason Helfstein on October 26 maintained an Outperform rating on Alphabet Inc. (NASDAQ:GOOG) after the Q3 results but trimmed the price target on the shares to $135 from $155 to reflect lower 2023 estimates on the back of softer first half of the year and slower headcount growth. 

According to Insider Monkey’s data, 153 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) at the end of Q2 2022, compared to 160 funds in the prior quarter. Chris Hohn’s TCI Fund Management is a significant position holder in the company, with 2.4 million shares worth $5.4 billion. 

Bronte Capital made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:

Consensus longs—those stocks widely held and admired by fund managers—have recently underperformed the market. Consensus shorts have been bad shorts. We have over 500 shorts, of which a few are consensus, and we have noticed this effect. But we also own what we think is (alas) the most consensus long in this market: Alphabet Inc. (NASDAQ:GOOG). We find it hard to find any strong reason not to own it. Internet advertising is going from strength to strength and Google’s place in the market is mostly improving. Some of the other bets such as cloud services are beginning to pay off, and finally the CEO is expressing discipline on costs. (Per the consensus, the biggest problem with Google has been a lack of discipline on costs. Every time we look there are another 20 thousand employees.) Being a consensus long, it is down hard. We did say consensus longs are not going well…” (Click here to read the full text)

You can also take a look at 15 Best Large Cap Dividend Growth Stocks To Buy and Top 10 ESG Companies in 2022. 

Follow Insider Monkey on Twitter