Billionaire Paul Tudor Jones runs a $7 billion hedge fund, called Tudor Investment Corp. The fund has been fighting for years to bring the profits to its investors, and the current year is bringing a little bit of optimism, as it has gained 9% through October. In this article, we’ll take a look at Paul Tudor Jones’ top stock pick in the third quarter.
Before we proceed with the most important new holdings in Tudor Investment Corp’s equity portfolio, let’s take a look at what he said about the US tax cuts at the recent Greenwich Economic Forum in Greenwich, Connecticut. Jones holds the opinion that US tax cuts may cause the bubble in credit to pop. He predicted that “We’re going to stress test our whole corporate credit market for the first time.” Let’s remind you that, although Jones’ hedge fund hadn’t had luck with its performance in recent years, Jones has been right with his forecasts, as he had predicted “Black Monday” stock market crash back in 1987. Hence, when it comes to corporate credit we can probably expect some tough times.
According to Jones, thanks to zero and negative interest rates, there has been too much lending, and current levels of leverage may be alarming. Credit markets have been affected by various factors such as trade wars, oil prices, etc. with global high yield bonds being hit the most, going through its worst period since the market crash in 2008. Jones said that stocks, bonds, currencies and real estate are all overpriced, and that “the next trade will be a “front-end rates trade” of figuring out when policy makers will cease interest rate hikes.”
Let’s take a look at what Jones thought were the safest bets, what are his top stock pick for the third quarter 2018.
1. Hanger Inc (NYSE:HNGR)
The most valuable new position the fund added to its equity portfolio was in Hanger Inc (NYSE:HNGR) whose 916,840 shares worth $19.10 million it acquired during the Q3. Hanger Inc (NYSE:HNGR) is a company that provides orthotic and prosthetic patient care, offering a plethora of special professional services to people in need of orthotic. Although the company is not among the most popular stocks in the third quarter (check out the list of 30 most popular stocks among hedge funds now), the number of bullish investors has gone up to 17 investors, from one in the second quarter. Year to date, the company’s stock is up by 22%.