In this article, we will discuss the top 10 stocks to buy according to John Bader’s Halcyon Asset Management.
John Bader is the owner and Chief Investment Officer of Halcyon Asset Management. Bader received his Bachelor’s of Arts degree from Harvard University in 1984 and worked in merger arbitrage at IFB Managing partnership. Later on, Mr. Bader started working with Marty Gruss at Gruss Partners LP in 1987.
John Bader joined Halcyon Asset Management in 1990 and at the time, the firm had around $100 million in assets. Under John Bader, the firm reached around $10 billion in assets under management. Mr. Bader has been featured in several publications including Pensions and Investments, Financial Times, and Bloomberg, and has participated in Barron’s roundtable. John Bader is also a member of the Board of Advisors for the Harvard Law School Forum on Corporate Governance and Financial Regulation.
Halcyon Asset Management is headquartered in New York and was founded in 1981. The asset management firm also has offices in London and Luxembourg.
Halcyon Asset Management’s philosophy is based around generating superior risk-adjusted returns for clients and commitment to deliver excellence across all functions of the firm. Nuance Communications, Inc. (NASDAQ:NUAN), Willis Towers Watson Public Limited Company (NASDAQ:WLTW), and IHS Markit Ltd. (NYSE:WORK) are some of the notable names in Halcyon Asset Management’s portfolio.
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Our Methodology
These are our top 10 stock picks according to John Bader’s Halcyon Asset Management. These were picked from Halcyon Asset Management portfolio at the end of the third quarter of 2021.
Top 10 Stock Picks of John Bader’s Halcyon Asset Management
10. IHS Markit Ltd. (NYSE:INFO)
Halcyon Asset Management’s Stake Value: $22.65 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 3.66%
Number of Hedge Fund Holders: 64
IHS Markit Ltd. (NYSE:INFO) is a financial data company.
Out of the 867 hedge funds tracked by Insider Monkey, 61 of them held stakes worth $5.947 billion in IHS Markit Ltd. (NYSE:INFO) at the end of the second quarter of 2021. In the third quarter, the hedge fund sentiment for the company increased to 64, and they held stakes worth $6.72 billion in the company.
The investment management firm Artisan Partners mentioned IHS Markit Ltd. (NYSE:INFO) in their investor letter for the first quarter of 2021. Here is what it said:
“We ended our campaign in IHS Markit. IHS Markit is a global provider of information services to the financial services, automotive, and energy sectors. Since beginning our investment campaign in 2009, we have been attracted to the company’s position relative to the meaningful secular tailwind driving demand for data and analytics to help guide business decisions. The company announced in Q4 it is merging with S&P Global, one of the largest credit ratings agencies globally and a provider of benchmarks, data and analytics to the global capital and commodities markets. We believe the combination provides a good level of cost and revenue synergies which will help drive profit growth, and S&P Global has a solid track record of acquiring and integrating new businesses. However, we exited our position as the combined entity will be well beyond our mid-cap market cap mandate.”
9. Athene Holding Ltd. (NYSE:ATH)
Halcyon Asset Management’s Stake Value: $24.007 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 3.87%
Number of Hedge Fund Holders: 49
Athene Holding Ltd. (NYSE:ATH) is a retirement services company that deals in retirement saving services to the public and institutions. In March 2021, the company was acquired by Apollo Global Management, Inc. (NYSE:APO). Before the deal, Apollo Global Management, Inc. (NYSE:APO) owned 35% of the company.
On November 9th, Truist analyst Mark Hughes raised the price target of Athene Holding Ltd. (NYSE:ATH) from $68 to $88.
Halcyon Asset Management’s recent filings show that the fund owns around 348,586 shares of Athene Holding Ltd. (NYSE:ATH) worth around $24 million, representing 3.87% of the fund’s portfolio.
8. Ferroglobe PLC (NASDAQ:GSM)
Halcyon Asset Management’s Stake Value: $24.21 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 3.91%
Number of Hedge Fund Holders: 24
Ferroglobe PLC (NASDAQ:GSM) is a producer of silicone metals and its alloys. The chemicals produced by the company are used in various products such as, health-care, electronics, etc. On September 29, Ferroglobe PLC (NASDAQ:GSM) announced that one of its subsidiaries is planning to restart its silicon metal facility in Alabama by 2022, which will create at least 100 new jobs in the market.
According to Halcyon Asset Management’s recent filings, the fund owns 2.78 million shares of Ferroglobe PLC (NASDAQ:GSM) worth $24.21 million, representing 3.91 % of the fund’s portfolio. The fund increased its activity in the company by 29% the third quarter of 2021.
7. Cornerstone OnDemand, Inc. (NASDAQ:CSOD)
Halcyon Asset Management’s Stake Value: $24.989 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 4.03%
Number of Hedge Fund Holders: 35
Cornerstone OnDemand, Inc. (NASDAQ:CSOD) is California based software company that focuses on cloud-based human resources software.
The company was publicly traded on the NASDAQ stock exchange until it was acquired by private-equity firm Clearlake Capital Group in 2021 for $5.2 billion.
6. Kraton Corporation (NYSE:KRA)
Halcyon Asset Management’s Stake Value: $25.85 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 4.17%
Number of Hedge Fund Holders: 33
Kraton Corporation (NYSE:KRA) develops and manufactures bio-derived products and focuses on polymer and chemical products. The company operates in Europe, the Americas, Asia, Africa and Middle-East.
In the third quarter of 2021, Kraton Corporation (NYSE:KRA) had an EPS of $0.98 compared to estimated $0.79. In the same quarter, the company beat the revenue estimates by 14.76% after generating $526.89 million against the $459.10 million forecast.
5. Covanta Holding Corporation (NYSE:CVA)
Halcyon Asset Management’s Stake Value: $26.117 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 4.22%
Number of Hedge Fund Holders: 23
Covanta Holding Corporation (NYSE:CVA) is an American company that provides industrial waste management services. Most of the company’s power plants are fueled by energy from waste and also do metal recovery for recycling. Apart from North America, Covanta Holding Corporation (NYSE:CVA) provides services in Europe and China.
In the third quarter of 2021, Covanta Holding Corporation (NYSE:CVA) had an EPS of $0.22 which was 24.53% over the analyst estimates.
Out of 867 hedge funds tracked by Insider Monkey, 23 of them held stakes in Covanta Holding Corporation (NYSE:CVA) worth $437.19 million.
4. NextDecade Corporation (NASDAQ:NEXT)
Halcyon Asset Management’s Stake Value: $26.37 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 4.26%
Number of Hedge Fund Holders: 12
NextDecade Corporation (NASDAQ:NEXT) is a clean energy company specializing in liquefied natural gas (LNG) development and export. The company is working to decarbonize natural gas from the wellhead to the burner tip.
Billionaire James Dinan’s York Capital Management holds the largest stake in NextDecade Corporation (NASDAQ:NEXT) with 54.3 million shares worth $148.885 million.
3. Willis Towers Watson Public Limited Company (NASDAQ:WLTW)
Halcyon Asset Management’s Stake Value: $32.39 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 5.23%
Number of Hedge Fund Holders: 75
Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is an insurance brokerage and advisory company based in London, United Kingdom.
Willis Towers Watson Public Limited Company’s (NASDAQ:WLTW) coverage was initiated by Jefferies analyst Yaron Kinar on November 18. Yaron Kinar gave the company shares a Hold rating with a price target of $258.
Willis Towers Watson Public Limited Company (NASDAQ:WLTW) was mentioned by Vltava Fund in their third-quarter investor letter. Here is what it said:
“The second position is much larger and was thrown into our hands by an unexpected turn of events. It is the stock of Willis Towers Watson. This is a British company with roots dating back to 1828. WLTW is the third-largest insurance broker in the world. This is a sector with which we are very familiar, as some time ago we held in our portfolio shares of its slightly larger competitor AON.
It was AON in fact that announced last spring it had agreed to merge with WLTW. In the merger, WLTW shareholders would have received AON shares. As is usually the case with such announcements, investors stepped in to conduct what is known as merger arbitrage. In this particular case, they bought WLTW shares and sold short AON shares in order to profit from the fact that the prices of the two stocks did not yet fully reflect the exchange ratio in the merger. Moreover, merger arbitrage commonly makes extensive use of leverage in order to increase profits…” (Click here to see the full text)
2. Kansas City Southern (NYSE:KSU)
Halcyon Asset Management’s Stake Value: $33.04 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 5.33%
Number of Hedge Fund Holders: 59
Kansas City Southern (NYSE:KSU) is a holding company that exclusively deals in transportation. It is headquartered in Kansas, Missouri, and has investments in USA, Mexico, and Panama. The company owns around 6,700 miles of railway track spreading across the United States and Mexico.
In the third quarter of 2021, Halcyon Asset Management owned 122,094 shares of Kansas City Southern (NYSE:KSU) worth $33.04 million. The fund also increased its activity in the company by 588%.
The Investment management firm, Miller/Howard Investments mentioned Kansas City Southern (NYSE:KSU) in their first quarter 2021 investor letter. Here is what it said:
“Canadian Pacific Railway (CP) agreed to acquire Kansas City Southern (KSU) in the largest rail deal in over a decade. The merger will create the first rail network connecting Canada, the US, and Mexico, and it should benefit from the passage of the USMCA Trade Agreement. We initiated a position in KSU in Q4 as we expected it to benefit from growing North American trade and viewed it as a consolidation candidate.”
1. Nuance Communications, Inc. (NASDAQ:NUAN)
Halcyon Asset Management’s Stake Value: $33.99 million
Percentage of Halcyon Asset Management’s 13F Portfolio: 5.49%
Number of Hedge Fund Holders: 61
Nuance Communications, Inc. (NASDAQ:NUAN) is a multinational corporation with computer software technology as its core business. In April 2021, Microsoft Corporation (NASDAQ:MSFT) announced that it will buy Nuance Communications, Inc. (NASDAQ:NUAN) for $19.7 billion.
Matthew Halbower’s Pentwater Capital Management holds the most significant stake in Nuance Communications, Inc. (NASDAQ:NUAN), with 17.565 million shares worth $9.66 million.
Artisan Partners mentioned Nuance Communications, Inc. (NASDAQ:NUAN) in their ‘Artisan Mid Cap Fund’ second quarter 2021 investor letter. Here is what the firm said:
“We ended our campaign in Nuance Communications. Nuance Communications is a leader in automated voice transcription technologies enabling physicians to document patient encounters more efficiently, accurately, and consistently. We believe the company’s DAX product is in the very early stages of its launch with a meaningful profit cycle opportunity ahead. However, the company announced early in Q2 it was being acquired by Microsoft. Thus, we harvested our GardenSM position.”
You can also take a peek at Yale University Stock Portfolio: Top 10 Picks and Top 10 Stock Picks of Brandon Osten’s Venator Capital Management.
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Disclosure. None. Top 10 Stock Picks of John Bader’s Halcyon Asset Management is originally published on Insider Monkey.
