In this article, we will be taking a look at the Top 10 Stock Picks of John Zaro’s Bourgeon Capital.
Bourgeon Capital Management LLC is a Darien, Connecticut-based boutique investment counseling firm founded in 1999 by industry veteran John Aniblo Zaro. The firm mainly focuses on actively managed, separate accounts, with investment portfolios comprised of stocks and bonds. The firm had $819 million of total assets under management as of March 31, 2022.
John Zaro is the managing partner and founder of Bourgeon Capital. Prior to founding his own investment firm, John Zaro was a Chief investment officer and a managing director of Warburg Pincus Asset Management, Inc., from 1997 to 1999. He did a stint as a portfolio manager and vice president at J.P. Morgan Investment Management from 1991 to 1997 and was a vice president at Morgan Stanley Smith Barney LLC from 1984 to 1991.
Bourgeon Capital follows an investment policy focused on seeking lower volatility, fewer extreme outcomes, and competitive returns over the long-term. John Zaro primarily focused on investing the excess cash in the bond market to capture higher interest rates.
Based on the current market scenario with inflation on the rise and the Fed increasing interest rates to curtail this inflation, Bourgeon Capital is opting for a two-pronged approach to respond. The firm is focusing on investments in defensive sectors such as healthcare, utilities and consumer staples, and defense companies with ties to national security. It also increased holdings in companies that it believes to be undervalued for long term positions.
Given inflation and the potential for interest rates to rise, the markets have been volatile and stocks could decline, particularly if they miss expectations. With valuations lower, however, some stocks could be considered opportunities for long term investors.
Methodology
We have picked the top 10 stocks from Bourgeon Capital’s latest 13F holdings as of the second quarter of 2022. According to Insider Monkey’s hedge fund data for the second quarter, these stocks are also some of the most popular names among hedge funds today. The stocks have been ranked based on the weightage of each company in Bourgeon Capital’s 13F Portfolio.
Top 10 Stock Picks of John Zaro’s Bourgeon Capital
10. Gilead Sciences, Inc. (NASDAQ:GILD)
Bourgeon Capital’s Stake Value: $10,683,000
Percentage of Bourgeon Capital’s 13F Portfolio: 2.82%
Number of Hedge Fund Holders: 58
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical company with a history dating back to 1987. Headquartered in Foster City, California, the company has operations in more than 35 countries worldwide and focuses on the prevention and treatment of life-threatening diseases including HIV, viral Hepatitis, cancer, and inflammation.
John Zaro’s Bourgeon Capital owns 172,843 shares in Gilead Sciences, Inc. (NASDAQ:GILD), making up 2.82% of the investment company’s 13F Portfolio. Bourgeon Capital’s stake increased by 2% in Q2 2022, compared to the previous quarter.
Earlier in August, Gilead Sciences, Inc. (NASDAQ:GILD) announced that it had agreed to acquire MiroBio, a UK-based, privately owned biotechnology company, for a total cash consideration of approximately $405 million. MiroBio is a biotechnology company with a focus on restoring immune balance with agonists targeting immune inhibitory receptors. The acquisition is expected to complement the Inflammation R&D strategy of Gilead Sciences, Inc. (NASDAQ:GILD).
Gilead Sciences, Inc. (NASDAQ:GILD) announced the financial results for Q2 2022 earlier in August. Its total revenue increased by 1% y-o-y to $6.3 billion for the quarter. The normalized EPS was recorded at $1.58, beating consensus by $0.06.
According to the data collected by Insider Monkey on nearly 900 hedge funds, 58 hedge funds held a stake in Gilead Sciences, Inc. (NASDAQ:GILD), with a total value of $4 billion, as of Q2 2022.
Alongside Jacobs Engineering Group Inc. (NYSE:J), JPMorgan Chase & Co. (NYSE:JPM), and Merck & Co., Inc. (NYSE:MRK), Gilead Sciences, Inc. (NASDAQ:GILD) are among top 10 stock picks of John Zaro’s Bourgeon Capital at the end of Q2.
9. NextEra Energy, Inc. (NYSE:NEE)
Bourgeon Capital’s Stake Value: $10,849,000
Percentage of Bourgeon Capital’s 13F Portfolio: 2.86%
Number of Hedge Fund Holders: 59
Juno Beach, Florida-based NextEra Energy, Inc. (NYSE:NEE), is a leading electric power and energy infrastructure company with operations in US and Canada. NextEra Energy, Inc. (NYSE:NEE) has two main business segments: FPL, the largest electric utility company in Florida focused on generation, transmission and distribution of electricity to more than 5.7 million customer accounts with approximately 28,450 MW of net generating capacity; and NEER, one of the largest wholesale generators of electric power in the US with approximately 24,070 MW of net generating capacity.
John Zaro’s Bourgeon Capital holds 140,060 shares in NextEra Energy, Inc. (NYSE:NEE), accounting for a 2.86% share in the 13F portfolio of Bourgeon Capital. Bourgeon Capital has been bullish on NextEra Energy, Inc. (NYSE:NEE) for the last two quarters as its stake has more than doubled from a paltry 56,414 shares at the end of Q4 2021.
NextEra Energy, Inc. (NYSE:NEE) announced the financial results for the second quarter of 2022 earlier this year in July. Its operating revenues increased by 32% y-o-y to $ 5.2 billion, while it reported a net income of $1.1 billion, for the three months ended June 30, 2022. The normalized EPS for the quarter was recorded at $0.81, beating the consensus by $0.05. NextEra Energy, Inc. (NYSE:NEE) also declared a regular quarterly dividend of $0.425.
Based on the data gathered by Insider Monkey on almost 900 hedge funds, 59 of them hold shares in NextEra Energy, Inc. (NYSE:NEE) as of Q2 2022.
8. CVS Health Corporation (NYSE:CVS)
Bourgeon Capital’s Stake Value: $11,230,000
Percentage of Bourgeon Capital’s 13F Portfolio: 2.97%
Number of Hedge Fund Holders: 65
CVS Health Corporation (NYSE:CVS) is a health solutions company based in Woonsocket, Rhode Island and a history dating back to 1963. It has more than 9,900 retail locations, nearly 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members, and more than 68,000 retail network pharmacies under its pharmacy services.
CVS Health Corporation (NYSE:CVS) accounts for a significant portion of the 13F portfolio of John Zaro’s Bourgeon Capital, with 121,198 shares amounting to 2.97% of the portfolio. Bourgeon Capital’s stake increased by 1% in Q2 2020, compared to the previous quarter.
Earlier in August, CVS Health Corporation (NYSE:CVS) released its financial results for Q2 2022. Its revenues increased by 11% y-o-y to $80.6 billion, while its net income increased by 6% y-o-y to $2.96 billion, for three months ended June 30, 2022. A normalized EPS of $2.40 was reported for the quarter, beating the consensus by $0.22. CVS Health Corporation (NYSE:CVS) also declared a dividend of $0.55 per share for the quarter.
As of Q2 2022, 65 hedge funds hold shares in CVS Health Corporation (NYSE:CVS), with a total value of $2 billion.
7. Microsoft Corporation (NASDAQ:MSFT)
Bourgeon Capital’s Stake Value: $11,623,000
Percentage of Bourgeon Capital’s 13F Portfolio: 3.07%
Number of Hedge Fund Holders: 258
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft Corporation (NASDAQ:MSFT) boasts over 1.4 billion monthly active devices running its flagship operating system, Windows 10 or 11.
Bourgeon Capital owns 45,256 shares in Microsoft Corporation (NASDAQ:MSFT), valued at $11,623,000 and accounting for 3.07% of John Zaro’s investment firm’s 13F Portfolio. Bourgeon Capital’s stake increased by 1% in Q2 2022, compared to the previous quarter.
In July, Microsoft Corporation (NASDAQ:MSFT) reported its earnings for the quarter ended June 30, 2022. Its revenue increased by 12% y-o-y to $51.9 billion, while net income increased by 2% y-o-y to $16.7 billion. It recorded a normalized EPS of $2.23, missing consensus by $0.06.
As of Q2 2022, 258 hedge funds tracked by Insider Monkey held shares of Microsoft Corporation (NASDAQ:MSFT), valued at $56 billion.
6. Medtronic plc (NYSE:MDT)
Bourgeon Capital’s Stake Value: $12,130,000
Percentage of Bourgeon Capital’s 13F Portfolio: 3.2%
Number of Hedge Fund Holders: 54
Based in Dublin, Ireland, Medtronic plc (NYSE:MDT) is a leading healthcare technology company with a focus on providing technologies and therapies including cardiac devices, surgical robotics, insulin pumps, surgical tools, and patient monitoring systems, among others. Medtronic plc (NYSE:MDT) employs boasts a global team of over 95,000 people across more than 150 countries.
John Zaro’s Bourgeon Capital owns 135,149 shares in Medtronic plc (NYSE:MDT), accounting for 3.2% of the hedge fund’s 13F portfolio. Bourgeon Capital’s has grown its stake in Medtronic plc (NYSE:MDT) by nearly 67% this year so far.
Last month, Truist analyst Richard Newitter lowered the price target for Medtronic plc (NYSE:MDT) to $97 from $111 and maintained a ‘Hold’ rating.
54 hedge funds were long Medtronic plc (NYSE:MDT) as of Q2, 2022, holding shares with a total value of $2.5 billion.
Like Medtronic plc (NYSE:MDT), Jacobs Engineering Group Inc. (NYSE:J), JPMorgan Chase & Co. (NYSE:JPM), and Merck & Co., Inc. (NYSE:MRK) are also among top 10 stock picks of John Zaro’s Bourgeon Capital at the end of Q2 2022.
5. Danaher Corporation (NYSE:DHR)
Bourgeon Capital’s Stake Value: $12,318,000
Percentage of Bourgeon Capital’s 13F Portfolio: 3.25%
Number of Hedge Fund Holders: 82
Danaher Corporation (NYSE:DHR) is a global science and technology company providing products and services across life sciences, diagnostics, environmental and applied sectors through more than 20 operating companies. It has operations in more than 60 countries.
Danaher Corporation (NYSE:DHR) is among the top 5 companies on the list of Bourgeon Capital’s holdings with the investment company owning 48,587 shares making up 3.25% of its 13F portfolio. Bourgeon Capital’s stake increased by 1% in Q2 2020, compared to the previous quarter.
In July, Danaher Corporation (NYSE:DHR) released the financial results for Q2 2022 ended July 1, 2022. Its revenue increased by 7.5% y-o-y to $7.8 billion, while its net income declined by 1.5% y-o-y to $1.7 billion, for the three months. The normalized EPS for the quarter was recorded at $2.76, beating the consensus by $0.42.
Last month, analysts at RBC Capital, Baird, and Barclays raised the price target for Danaher Corporation (NYSE:DHR) shares, while UBS analyst Elizabeth Garcia initiated coverage of the stock with a ‘Buy’ rating.
As of Q2 2022, 82 hedge funds tracked by Insider Monkey were long Danaher Corporation (NYSE:DHR).
4. Honeywell International Inc. (NYSE:HON)
Bourgeon Capital’s Stake Value: $13,085,000
Percentage of Bourgeon Capital’s 13F Portfolio: 3.46%
Number of Hedge Fund Holders: 42
Charlotte, North Carolina-based Honeywell International Inc. (NYSE:HON) is a multinational conglomerate with a focus on providing solutions across aerospace, building technologies, performance materials & technologies, and safety & productivity solutions.
John Zaro’s Bourgeon Capital holds 75,281 shares of Honeywell International Inc. (NYSE:HON), representing 3.46% of the 13F Portfolio of the hedge fund. The number of shares held by Bourgeon Capital has increased by 65% since the beginning of this year.
Honeywell International Inc. (NYSE:HON) released the financial results for Q2 2022. Its total revenue increased by 2% y-o-y to $8.95 billion, while its net income declined by 13% y-o-y to $1.3 billion, for three months ended June 30, 2022. It reported a normalized EPS of $2.10, beating the consensus by $0.07.
Following the earnings release, Citi analyst Andrew Kaplowitz raised the price target for Honeywell shares to $222 from $211 and maintained a ‘Buy’ rating.
As of Q2 2022, 42 hedge funds tracked by Insider Monkey held shares of Honeywell International Inc. (NYSE:HON), valued at $1 billion.
3. Jacobs Engineering Group Inc. (NYSE:J)
Bourgeon Capital’s Stake Value: $14,076,000
Percentage of Bourgeon Capital’s 13F Portfolio: 3.72%
Number of Hedge Fund Holders: 28
Founded in 1947, Dallas, Texas-based Jacobs Engineering Group Inc. (NYSE:J) is a global professional services provider focused on providing consulting, technical, scientific and project delivery services for the government and private sector. With operations in more than 50 countries, its focus areas include advanced manufacturing, cities and places, energy and environment, health and life sciences, infrastructure, security, and space.
Bourgeon Capital holds 110,719 shares of Jacobs Engineering Group Inc. (NYSE:J), making up for 3.72% of the hedge fund’s 13F portfolio and ranks #3 based on the portfolio weight. Bourgeon Capital’s stake increased by 1% in 2Q 2022, compared to the previous quarter.
In first week of August, Jacobs Engineering Group Inc. (NYSE:J) released the financial results for Q3 2022 ended July 1, 2022. Its revenue increased by 7% y-o-y to $3.8 billion, while its net income increased by 19% y-o-y to $ 196 million. It reported a normalized EPS of $1.86, beating consensus by $0.06.
Following the earnings release, Citi analyst Andrew Kaplowitz and Credit Suisse analyst Jamie Cook lowered the price target on Jacobs to $151 and $154, respectively, maintaining their respective ‘Buy’ and ‘Outperform’ rating on the shares.
According to Insider Monkey data on almost 900 hedge funds, 28 hedge funds held shares of Jacobs Engineering Group Inc. (NYSE:J) valued at $947.2 million.
2. JPMorgan Chase & Co. (NYSE:JPM)
Bourgeon Capital’s Stake Value: $14,196,000
Percentage of Bourgeon Capital’s 13F Portfolio: 3.75%
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) is one of the leading financial institutions in the US with a history dating back over 200 years. It provides services including investment banking, financial services for consumers and small business, commercial banking, financial transactions processing and asset management. JPMorgan Chase & Co. (NYSE:JPM) has over $2.6 trillion in client assets under management and serves clients across more than 100 countries.
John Zaro’s Bourgeon Capital holds 126,065 shares of JPMorgan Chase & Co. (NYSE:JPM), making up for 3.75% of the hedge fund’s 13F portfolio. Bourgeon Capital’s stake increased by 4% in Q2 2022, compared to the previous quarter.
JPMorgan Chase & Co. (NYSE:JPM) released its quarterly results for Q2 2022 in July. Its net revenue increased by 1% y-o-y to $30.7 billion, while net income decreased by 28% y-o-y to $8.6 billion, for the quarter ended June 30, 2022. It reported a normalized EPS of $2.76, missing the consensus by $0.14. Last month, Berenberg analyst Peter Richardson upgraded JPMorgan Chase & Co. (NYSE:JPM) to ‘Hold’ from ‘Sell’ with an unchanged price target of $120.
As of Q2 2022, 104 hedge funds tracked by Insider Monkey were bullish on JPMorgan Chase & Co. (NYSE:JPM).
1. Merck & Co., Inc. (NYSE:MRK)
Bourgeon Capital’s Stake Value: $15,305,000
Percentage of Bourgeon Capital’s 13F Portfolio: 4.04%
Number of Hedge Fund Holders: 79
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company with a focus on delivering solutions for oncology, vaccines, infectious diseases, Cardio-metabolic disorders, and Discovery & development. Its product pipeline comprises 83 programs in Phase 2, 30 programs in Phase 3, and 3 programs Under Review, including a COVID19 vaccines.
Bourgeon Capital holds 167,874 shares of Merck & Co., Inc. (NYSE:MRK), accounting for 4.04% of the hedge fund’s 13F portfolio and ranking the stock on #1 on the list of top 5 and 10 stock picks of John Zaro’s Bourgeon Capital. Bourgeon Capital’s stake increased by 1% in Q2 2022, compared to the previous quarter.
In July, Merck & Co., Inc. (NYSE:MRK) released the financial results for Q2 2022. Its revenue increased 28% y-o-y to $14.6 billion, while it reported a net income of $3.9 billion, for three months ended June 30, 2022. It reported a normalized EPS of $1.87, beating analyst consensus by $0.16.
Following the earnings release, Barclays analyst Carter Gould raised the price target on Merck & Co., Inc. (NYSE:MRK) shares to $101 from $97, maintaining an ‘Overweight’ rating for the stock.
Merck & Co., Inc. (NYSE:MRK) ranks high on the list of companies displaying significant interest from hedge funds tracked by Insider Monkey. As of Q2 2022, 79 hedge funds tracked by Insider Monkey held a stake in Merck & Co., Inc. (NYSE:MRK), valued at a total of $6.1 billion.
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Disclosure: None. Top 10 Stock Picks of John Zaro’s Bourgeon Capital is originally published on Insider Monkey.
