In this article, we will take a look at the top 10 stock picks of Kenneth Tropin’s Graham Capital Management.
Kenneth Tropin is the founder and in charge of the investment strategy of Graham Capital Management. Kenneth Tropin holds a bachelor’s degree from Goddard College. He also worked in John W. Henry & Company as President and at Dean Witter Reynolds as Senior Vice President. Tropin founded Graham Capital Management in 1994 with a capital of $30 million.
The investment philosophy of Tropin is aimed to lower risk by using several investment strategies in different markets. These investment strategies include quantitative trend following, quantitative macro, and discretionary trading.
Graham Capital Management’s 13F portfolio is valued at $1.964 billion as of the end of the third quarter of 2021. The fund has investments in alternative markets, public equity, and fixed income markets.
Graham Capital has significant investments in sectors like finance, consumer discretionary, and energy. Some of the notable picks of Graham Capital Management include electric vehicle giant Tesla, Inc. (NASDAQ:TSLA), point-of-sale service provider Square, Inc. (NYSE:SQ), and TV streaming company Roku, Inc. (NASDAQ:ROKU).
In Tesla, Inc., Graham Capital held 12,901 shares valued at $10 million as of the end of September quarter of 2021.
Square, Inc. accounted for 0.3% of the Q3 portfolio with 24,852 shares valued at $5.9 million.
Graham Capital held 16,587 shares in Roku, Inc., valued at $5.1 million in the third quarter of 2021.
Our Methodology
This list is compiled by picking the top companies in which Graham Capital Management has significant shares at the end of the third quarter of 2021. The number of hedge funds out of 873 hedge funds as tracked by Insider Monkey in Q2’2021 is also mentioned with each company.
Technology share chart
Top 10 Stock Picks of Kenneth Tropin’s Graham Capital Management
10. CNX Resources Corporation (NYSE:CNX)
Graham Capital’s Stake Value: $14.3 million
Percent of 13F Portfolio: 0.72%
Number of Hedge Fund Holders: 30
CNX Resources Corporation (NYSE:CNX) is a US-based company that specializes in the energy sector. The company acquires and explores oil and natural gas resources. The company works in two segments: shale and coalbed methane.
Graham Capital Management held 1.13 million shares worth $14.3 million in the company in the third quarter of 2021. This accounts for 0.72% of the 13F portfolio. According to the Insider Monkey database, 30 hedge funds have stakes valued at $539.9 million in the company as of the second quarter of 2021.
In Q3 2021, Southeastern Asset Management held over 28 million shares valued at $355 million in the third quarter of 2021 and ranks as the leading investor.
In the third-quarter earnings report, CNX Resources Corporation reported an EPS of $0.74, beating the market consensus by $0.42. On October 07, 2021, Truist raised its price target to $15 from $14 and kept a “Hold” rating on the shares.
9. CME Group Inc (NASDAQ:CME)
Graham Capital’s Stake Value: $14.5 million
Percent of 13F Portfolio: 0.73%
Number of Hedge Fund Holders: 62
With 75,000 shares valued at $14.5 million, CME Group Inc (NASDAQ:CME) accounts for 0.73% of the Q3 13F portfolio of Graham Capital Management. CME Group Inc is based in Illinois and provides financial services, mainly trading of futures and options on futures.
Insider Monkey tracked that 62 hedge funds had stakes in CME Group Inc, valued at $2.64 billion, in the June quarter of 2021. In the third quarter, the company beat the EPS market consensus of $1.55 by $0.05.
On October 01, 2021, a Piper Sandler analyst maintained his “Overweight” rating on the share and set a price target of $230. The analyst predicted “meaningful price appreciation” by the end of 2021 due to increased interest and volatility.
Like Tesla, Inc., Square, Inc., and Roku, Inc., CME Group Inc is one of the top stock picks of Kenneth Tropin’s Graham Capital Management
8. Social Capital Hedosophia Holdings Corp. IV (NYSE:IPOD)
Graham Capital’s Stake Value: $14.8 million
Percent of 13F Portfolio: 0.75%
Number of Hedge Fund Holders: 33
Social Capital Hedosophia Holdings Corp. IV (NYSE:IPOD) went public on October 08, 2020. Graham Capital Management held 1.46 million shares in Social Capital Hedosophia Holdings Corp. IV (NYSE:IPOD), valued at $14.8 million as of the end of the third quarter of 2021.
According to Insider Monkey’s data as of the second quarter, 33 hedge funds have stakes in Social Capital Hedosophia Holdings Corp. IV (NYSE:IPOD) valued at $135 million.
Empyrean Capital Partners is the leading hedge fund investor in the company with 2.4 million shares worth over $24 million as of the third quarter of 2021.
7. Pershing Square Tontine Holdings, Ltd. (NYSE:PSTH)
Graham Capital’s Stake Value: $16.56 million
Percent of 13F Portfolio: 0.84%
Number of Hedge Fund Holders: 36
Pershing Square Tontine Holdings, Ltd. (NYSE:PSTH) is a New York-Based SPAC that intends to affect a merger, assets acquisition, or business combination with companies having unicorn status.
The company launched its IPO on June 22, 2021. The company is worth $4 billion. 36 hedge funds have stakes in Pershing Square Tontine Holdings, Ltd., valued at $591 million as of the second quarter of 2021, according to Insider Monkey database.
With 9.55 million shares in Pershing Square Tontine Holdings, Ltd., Seth Klarman’s Baupost Group is the leading hedge fund investor having stakes worth over $188 million.
Like Pershing Square Tontine Holdings, Ltd., Graham Capital Management holds significant shares in Tesla, Inc., Square, Inc., and Roku, Inc..
6. EQT Corporation (NYSE:EQT)
Graham Capital’s Stake Value: $20.1 million
Percent of 13F Portfolio: 1.02%
Number of Hedge Fund Holders: 43
EQT Corporation (NYSE:EQT), headquartered in Pennsylvania, operates in the energy sector. The company produces natural gas, natural gas liquids (NGLs), and crude oil. The company owns 1.8 million gross acres of natural gas, NGLs, and crude oil reserves.
In the September quarter of 2021, EQT Corporation posted an EPS of $0.12, beating the market consensus by $0.17. On October 28, 2021, JPMorgan updated its price target on EQT Corporation to $31 and upgraded its rating to “Overweight” from “Neutral” on the stock.
As of the end of the third quarter of 2021, Graham Capital Management held 982,987 shares of the company worth $20.1 million.
According to the database of Insider Monkey tracking 873 hedge funds in Q2 2021, 43 were bullish on EQT Corporation, having stakes worth $468 million.
5. Social Capital Hedosophia Holdings Corp. VI (NYSE:IPOF)
Graham Capital’s Stake Value: $22.95 million
Percent of 13F Portfolio: 1.16%
Number of Hedge Fund Holders: 39
Social Capital Hedosophia Holdings Corp. VI (NYSE:IPOF) is another special purpose acquisition company in which Graham Capital Management holds a significant number of shares. In the third quarter of 2021, the hedge fund held 2.261 million shares valued at $22.95 million.
Social Capital Hedosophia Holdings Corp. VI went public on October 08, 2020. The company has attracted investments from 39 hedge funds in the second quarter of 2021, having stakes worth $291 million.
Social Capital Hedosophia Holdings Corp. VI aims to affect a merger with a business working in the technology industry.
4. Academy Sports and Outdoors, Inc. (NASDAQ:ASO)
Graham Capital’s Stake Value: $37.55 million
Percent of 13F Portfolio: 1.91%
Number of Hedge Fund Holders: 45
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) manufactures and sells sporting goods and outdoor recreational products in the US. Based in Texas, Academy Sports and Outdoors, Inc. operates 259 retail stores in 16 states of the US.
As of the end of the second quarter of 2021, Graham Management Capital held 938,333 shares in Academy Sports and Outdoors, Inc., valued at $37.55 million.
In the third quarter of 2021, the company posted an EPS of $2.34, beating the market consensus by $0.90. According to the database of Insider Monkey tracking 873 hedge funds, 45 hedge funds remained bullish on Academy Sports and Outdoors, Inc., having stakes worth $709 million.
On October 25, 2021, Wedbush initiated its coverage on Academy Sports and Outdoors, Inc. with a price target of $54 and kept an “Outperform” rating on the stocks.
3. Dollar General Corp. (NYSE:DG)
Graham Capital’s Stake Value: $46.67 million
Percent of 13F Portfolio: 2.37%
Number of Hedge Fund Holders: 45
Accounting for 2.37% of the 13F portfolio of Graham Capital Management with 220,000 shares worth $46.67 million in Q3 2021, Dollar General Corp. (NYSE:DG) is a discount retailer providing several merchandise products in the US. The company has operations in 46 states of the US and operates 17,638 stores.
According to the Insider Monkey database, 45 hedge funds have stakes in Dollar General Corp., worth $1.64 billion as of the second quarter of 2021.
In the third quarter of 2021, Dollar General Corp. reported an EPS of $2.69, beating the market estimates by $0.10. On November 15, 2021, UBS kept a “Buy” rating on Dollar General Corp. and raised its price target to $130 from $120.
2. Penn National Gaming, Inc (NASDAQ:PENN)
Graham Capital’s Stake Value: $53.72 million
Percent of 13F Portfolio: 2.73%
Number of Hedge Fund Holders: 40
Penn National Gaming, Inc (NASDAQ:PENN) is a gaming and racing conglomerate that operates video gaming terminals. As of December 31, 2020, the company owned 41 gaming properties across 19 states.
Penn National Gaming, Inc reported an EPS of $0.52 in the third quarter of 2021, missing the market consensus by -$0.37. On November 12, 2021, Deutsche Bank upgraded its rating on Penn National Gaming, Inc to “Hold” from “Sell” and set its price target to $31.
With 741,447 shares, Penn National Gaming, Inc accounts for 2.73% of the portfolio of Graham Capital Management as of the third quarter of 2021. Insider monkey tracked 40 hedge funds having stakes in Penn National Gaming, Inc, valued at $1.039 billion in the June quarter of 2021.
1. Antero Resources Corp (NYSE:AR)
Graham Capital’s Stake Value: $104.8 million
Percent of 13F Portfolio: 5.33%
Number of Hedge Fund Holders: 33
Antero Resources Corp (NYSE:AR) ranks first on our list of top 10 stock picks of Kenneth Tropin’s Graham Capital Management. The company works in the energy sector and acquires natural gas and oil reserves in the US.
Graham Capital Management held 5.5 million shares in Antero Resources Corp, valued at $104.8 million in the third quarter of 2021. According to Insider Monkey, 33 hedge funds have stakes valued at $841 million in Antero Resources Corp as of the June quarter of 2021.
Antero Resources Corp reported an EPS of $0.19 in the third quarter of 2021, missing estimates by -$0.14.
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This article is originally published at Insider Monkey.
