Robert Bishop’s Value Fund is Up 10% in 2022: Top 10 Stock Picks

In this article, we discuss the top 10 stock picks of Robert Bishop’s Impala Asset Management. If you want to see the top 5 holdings of the hedge fund, click Robert Bishop’s Value Fund is Up 10% in 2022: Top 5 Stock Picks.

Impala Asset Management, established in 2004 by Robert Bishop, aims to provide cyclical stock exposure to investors through a fairly concentrated portfolio. The fund seeks to leverage the economic sensitivities of companies, which assists in a value and contrarian approach.

A Banner Year For Value Funds

While most of the investors in Wall Street are suffering huge losses in 2022 amid the broader market selloff and volatile macro environment, Impala Asset Management’s $1.5 billion flagship portfolio, with investments concentrated in the transports, materials, energy, and consumer discretionary sectors, is up 10% through April. Impala fared better than most funds so far in 2022 due to its portfolio composition, which is not focused on the information technology sector, as the tech-heavy Nasdaq 100 has tumbled around 27% year-to-date. Funds that were bullish on value stocks are having a banner year. 

The hedge fund does not invest in mainstream companies, and its investments usually do not overlap with other firms. Robert Bishop strongly believes that directional bets in well-researched companies will potentially offer greater returns over the long-term. Some of the most popular stocks in Robert Bishop’s portfolio include Alphabet Inc. (NASDAQ:GOOG), Northrop Grumman Corporation (NYSE:NOC), and Caterpillar Inc. (NYSE:CAT). 

 

Robert Bishop
Source: Impala Asset Management

 

Our Methodology

We used the Q1 2022 portfolio of Robert Bishop’s Impala Asset Management for this analysis, selecting the hedge fund’s top 10 stock picks. To provide further context on the stocks, we have mentioned the Q1 earnings, analyst ratings, and the hedge fund sentiment around the holdings as of Q1 2022. 

10 Value Stock Picks of Robert Bishop’s Impala Asset Management

10. Century Aluminum Company (NASDAQ:CENX)

Impala Asset Management’s Stake Value: $41,044,000

Percentage of Impala Asset Management’s 13F Portfolio: 3.54%

Number of Hedge Fund Holders: 23

Century Aluminum Company (NASDAQ:CENX) is an American company that produces industrial-grade and value-added aluminum products in the United States and Iceland. Robert Bishop’s fund boosted its stake in Century Aluminum Company (NASDAQ:CENX) by 17% in Q1 2022, holding 1.56 million shares of the company worth $41 million, representing 3.54% of the total 13F securities. 

Century Aluminum Company (NASDAQ:CENX) posted earnings for Q1 on April 28, reporting an EPS of $0.59, beating consensus estimates by $0.26. The revenue increased about 70% year-over-year to $753.60 million, outperforming analysts’ predictions by $100,000. 

On May 18, Wolfe Research analyst Timna Tanners downgraded Century Aluminum Company (NASDAQ:CENX) to Peer Perform from Outperform, slashing the price target to $14 from $30. A “sharply worse” power price outlook in the Midcontinent Independent System Operator (MISO) region in recent weeks offsets a positive aluminum view, observed the analyst, adding that the company is exposed to steep spot power rates that can worsen over the summer.

According to Insider Monkey’s Q1 data, Century Aluminum Company (NASDAQ:CENX) was found in 23 public hedge fund portfolios, up from 19 funds in the earlier quarter. In Q1 2022, Ken Fisher’s Fisher Asset Management reported a $66 million stake in the company. 

In addition to Alphabet Inc. (NASDAQ:GOOG), Northrop Grumman Corporation (NYSE:NOC), and Caterpillar Inc. (NYSE:CAT), Century Aluminum Company (NASDAQ:CENX) is a prominent holding of Robert Bishop in 2022. 

9. Devon Energy Corporation (NYSE:DVN)

Impala Asset Management’s Stake Value: $43,550,000

Percentage of Impala Asset Management’s 13F Portfolio: 3.75%

Number of Hedge Fund Holders: 66

Devon Energy Corporation (NYSE:DVN) is an independent energy company that produces oil, natural gas, and natural gas liquids in the United States. On May 2, Devon Energy Corporation (NYSE:DVN) posted a Q1 EPS of $1.88 and a revenue of $3.81 billion, above market estimates by $0.12 and $215.92 million, respectively. Securities filings for Q1 2022 reveal that Bob Bishop owned 736,519 shares of the company, worth $43.5 million. Although the stock still remains the 9th largest holding of Bishop, he trimmed his position by 62% in Q1. 

On May 2, Devon Energy Corporation (NYSE:DVN) declared a $1.27 per share quarterly dividend, a 27% increase from its prior dividend of $1.00. The dividend is payable on June 30, to shareholders of record on June 13. Devon Energy Corporation (NYSE:DVN) as of May 23 delivers a dividend yield of 7.14%. The company also raised its share repurchase program by 25% to $2 billion. 

Raymond James analyst John Freeman on May 9 lifted the price target on Devon Energy Corporation (NYSE:DVN) to $90 from $85 and reiterated a Strong Buy rating on the shares. After the Q1 beat, Devon Energy Corporation (NYSE:DVN) remains one of the firm’s best picks in the Exploration and Production sector, the analyst told investors in a research note. He noted that the combination of a shareholder-focused return structure, robust balance sheet, and deep drilling inventory will serve the company well moving forward.

Among the hedge funds tracked by Insider Monkey in Q1 20212 66 funds were bullish on Devon Energy Corporation (NYSE:DVN), up from 51 funds in the earlier quarter. In Q1, Rajiv Jain’s GQG Partners held a leading stake in the company, with more than 15 million shares worth $888.5 million. 

Here is what GoodHaven Capital Management has to say about Devon Energy Corporation (NYSE:DVN) in its Q4 2020 investor letter:

“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”

8. Brunswick Corporation (NYSE:BC)

Impala Asset Management’s Stake Value: $45,511,000

Percentage of Impala Asset Management’s 13F Portfolio: 3.92%

Number of Hedge Fund Holders: 37

Brunswick Corporation (NYSE:BC) is an Illinois-based business that manufactures and markets recreational products, operating through Propulsion, Parts & Accessories, and Boat segments. In the first fiscal quarter of 2022, Robert Bishop’s Impala Asset Management owned 562,623 shares of Brunswick Corporation (NYSE:BC) worth $45.5 million, representing 3.92% of the total 13F holdings. 

On April 28, Brunswick Corporation (NYSE:BC) announced earnings for Q1, posting an EPS of $2.53, beating analysts’ estimates by $0.20. The revenue grew 18.32% compared to the prior-year quarter, reaching $1.70 billion, topping Street forecasts by ​​$51.53 million. The company declared on May 4 a $0.365 per share quarterly dividend, payable on June 15, to shareholders of record on May 18. 

KeyBanc analyst Brett Anderson on May 2 maintained an Overweight rating on Brunswick Corporation (NYSE:BC) but lowered the price target on the stock to $100 from $115. The analyst reiterated his view that the marine cycle remains the most durable, providing robust evidence of healthy short-term demand and fiscal 2024 restock visibility. He thinks the incremental powersports investor is likely to remain on the sidelines until the macro backdrop becomes more clear.

According to Insider Monkey’s March quarter data, Brunswick Corporation (NYSE:BC) was part of 37 public hedge fund portfolios, compared to 42 funds in the last quarter. In the first quarter of 2022, William Von Mueffling’s Cantillon Capital Management disclosed a $333.4 million stake in the company. 

7. Arch Resources, Inc. (NYSE:ARCH)

Impala Asset Management’s Stake Value: $47,182,000

Percentage of Impala Asset Management’s 13F Portfolio: 4.07%

Number of Hedge Fund Holders: 45

Arch Resources, Inc. (NYSE:ARCH) is a Missouri-based company that sells thermal and metallurgical coal from surface and underground mines. Robert Bishop’s hedge fund reported owning 343,444 shares of Arch Resources, Inc. (NYSE:ARCH) in Q1 2022, worth $47.1 million, representing 4.07% of the total 13F portfolio. Impala Asset Management boosted its Arch Resources, Inc. (NYSE:ARCH) stake by 717% in the first quarter of 2022. 

Arch Resources, Inc. (NYSE:ARCH) announced its Q1 financial results on April 26, posting earnings per share of $13.02, beating analysts’ estimates by $1.34. The revenue climbed 142.75% year-over-year to $867.94 million, topping Street estimates by $142.60 million. The company also declared a $0.25 per share quarterly dividend, payable on June 15 to shareholders of record on May 31. Arch Resources, Inc. (NYSE:ARCH) announced a special dividend of $7.86 per share, payable on June 15 as well. 

On April 27, B. Riley analyst Lucas Pipes raised the price target on Arch Resources, Inc. (NYSE:ARCH) to $234 from $231 and maintained a Buy rating on the shares after the Q1 results. The company executed positively on robust met coal pricing despite ongoing rail-service challenges, the analyst told investors. He said Arch Resources, Inc. (NYSE:ARCH) is positioned for new records in terms of cash generation.

Among the hedge funds tracked by Insider Monkey, 45 funds were long Arch Resources, Inc. (NYSE:ARCH) at the end of March 2022, up from 40 funds in the previous quarter. The total stakes owned in Q1 2022 amounted to $1.02 billion, compared to $578.5 million in Q4 2021. 

6. Chesapeake Energy Corporation (NASDAQ:CHK)

Impala Asset Management’s Stake Value: $61,007,000

Percentage of Impala Asset Management’s 13F Portfolio: 5.26%

Number of Hedge Fund Holders: 59

Chesapeake Energy Corporation (NASDAQ:CHK) is an American independent exploration and production company. Chesapeake Energy Corporation (NASDAQ:CHK) is a new addition in Robert Bishop’s Q1 2022 portfolio, with his hedge fund buying 701,231 shares of the company worth $61 million, representing 5.26% of the total 13F securities. 

On May 17, Chesapeake Energy Corporation (NASDAQ:CHK) declared a $2.34 per share quarterly dividend, comprising a variable dividend of $1.84 and a base dividend of $0.50 per common share. The dividend is distributable on June 2, to shareholders of the company as of May 19. 

Wolfe Research analyst Josh Silverstein raised the price target on Chesapeake Energy Corporation (NASDAQ:CHK) to $111 from $104 and kept an Outperform rating on the shares on April 5. The analyst was “incrementally positive” on the future outlook and reiterated his “Top Pick view” on the stock. As Chesapeake Energy Corporation (NASDAQ:CHK)’s “top-tier return of capital profile proves sustainable”, the stock’s valuation discount won’t be “sticking around”, the analyst told investors in a research note.

According to Insider Monkey’s Q1 data, 59 hedge funds reported long positions in Chesapeake Energy Corporation (NASDAQ:CHK), compared to 50 funds in the last quarter. In Q1 2022, Howard Marks’ Oaktree Capital Management disclosed a significant stake in the company, comprising 11 million shares worth $957.10 million. 

Like Alphabet Inc. (NASDAQ:GOOG), Northrop Grumman Corporation (NYSE:NOC), and Caterpillar Inc. (NYSE:CAT), elite hedge funds are pouring into Chesapeake Energy Corporation (NASDAQ:CHK). 

Here is what ClearBridge Investments Dividend Strategy has to say about Chesapeake Energy Corporation (NYSE:CHK) in its Q1 2022 investor letter:

“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).

Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.

The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.

Despite the abundance of low-cost resources and a superior environmental profile, the investment case for U.S. natural gas producers was previously unfavorable due to oversupply in the domestic market.

In the days preceding the invasion, we were quick to realize the war would change global energy flows. Europe is shifting away from Russia and toward new sources of imported liquified natural gas. We purchased our stakes in Chesapeake to capitalize on these trends. The recently announced energy pact between the U.S. and Europe represents an early positive datapoint in support of this investment thesis.”

 

 

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Disclosure: None. Robert Bishop’s Value Fund is Up 10% in 2022: Top 10 Stock Picks is originally published on Insider Monkey.