Top 10 Stock Picks of Mika Toikka’s AlphaCrest Capital

In this article, we will be taking a look at the top 10 stock picks of Mika Toikka’s AlphaCrest Capital. To skip our detailed analysis, you can go directly to see Top 5 Stock Picks of Mika Toikka’s AlphaCrest Capital.

Established in 2013 by Mika Toikka, AlphaCrest Capital is headquartered in New York, with a $1.78 billion portfolio. There is very little public information available about Mika Toikka, but he had a successful career before establishing the hedge fund, and worked as Vice President of The Goldman Sachs Group, Inc. (NYSE:GS) before becoming the Managing Director of Credit Suisse. He then left this position to establish AlphaCrest Capital.

The hedge fund’s portfolio is dominated by the tech and services industries, and most of the top 10 stock picks of Mika Toikka’s AlphaCrest Capital are companies that you will definitely be familiar with. Some popular holdings of the fund include Pfizer Inc. (NYSE:PFE), one of the biggest pharmaceutical companies in the world. Pfizer Inc. (NYSE:PFE) was one of the pharmaceutical companies to come up with a successful vaccine for Covid-19. AlphaCrest Capital’s position in Pfizer Inc. (NYSE:PFE) is currently worth $11.147 million.

Top 10 Stock Picks of Mika Toikka's AlphaCrest Capital

Meta Platforms, Inc. (NASDAQ:META) is also part of AlphaCrest’s Q1 portfolio, though AlphaCrest did decrease its Meta Platforms, Inc. (NASDAQ:META) stake by 46% in the latest quarter. In addition to that, Mika Toikka’s AlphaCrest Capital holds a significant position in Netflix, Inc. (NASDAQ:NFLX), the American streaming and original production giant.

Methodology

We used AlphaCrest Capital’s Q1 portfolio and picked the top 10 stocks for this analysis.

Top Stock Picks of Mika Toikka’s AlphaCrest Capital

10. The Bank of Nova Scotia (NYSE:BNS)

AlphaCrest Capital’s Stake Value: $11.517 million

 

Number of Hedge Fund Holders: 18

The Bank of Nova Scotia (NYSE:BNS) is a multinational Canadian bank, and the third biggest Canadian bank by both market capitalization and deposits. Even though The Bank of Nova Scotia (NYSE:BNS) was founded in Nova Scotia, it relocated its headquarters to Toronto in 1900. The Bank of Nova Scotia (NYSE:BNS) recently repurchased 13.9 million of its own shares.

Like Pfizer Inc. (NYSE:PFE), Meta Platforms, Inc. (NASDAQ:META), and Netflix, Inc. (NASDAQ:NFLX), The Bank of Nova Scotia (NYSE:BNS) is on the radar of elite investors.

9. QUALCOMM Incorporated (NASDAQ:QCOM)

AlphaCrest Capital’s Stake Value: $11.799 million

 

Number of Hedge Fund Holders: 73

QUALCOMM Incorporated (NASDAQ:QCOM) is a wireless technology and innovation company, which aims to intelligently connect everyone in the world. QUALCOMM Incorporated (NASDAQ:QCOM) provides semiconductor components for cell phones, laptops, vehicles, and watches, among other devices. QUALCOMM Incorporated (NASDAQ:QCOM) recently announced the Qualcomm AI Stack, which aims to allow developers to use AI created for one interface such as cellphones and easily replicate it on another interface such as a laptop.

8. The Charles Schwab Corporation (NYSE:SCHW)

 

AlphaCrest Capital’s Stake Value: $12.250 million

 

Number of Hedge Fund Holders: 78

The Charles Schwab Corporation (NYSE:SCHW) is a major American financial services company, and one of the top 10 stock picks of Mika Toikka’s AlphaCrest Capital, making up 0.68% of the total portfolio. The hedge fund increased its hold on the company by 315% in Q1. Recently, The Charles Schwab Corporation (NYSE:SCHW) was made to pay $187 million in order to settle SEC charges due to Schwab Intelligent Portfolios charging hidden fees from 2015 to 2018.

The Charles Schwab Corporation (NYSE:SCHW) was mentioned by Baron Funds in its Q1 2022 investor letter. Here is what it said:

“Outperformance of the Fund’s investments in Communication Services, Financials, and Industrials and lower exposure to the lagging Consumer Discretionary sector added the most value. Within Financials, higher exposure to this outperforming sector and gains from online brokerage firm The Charles Schwab Corp (NYSE:SCHW) bolstered relative results. Schwab’s shares gained because of the positive impact higher interest rates will have on its future earnings.”

7. Intuit Inc. (NASDAQ:INTU)

AlphaCrest Capital’s Stake Value: $12.356 million

 

Number of Hedge Fund Holders: 82

Intuit Inc. (NASDAQ:INTU) is an American company which specializes in financial software. Recently, Carnegie Capital Asset Management LLC reduced its holdings in Intuit Inc. (NASDAQ:INTU) by 11.9%. On the other hand, it became part of one of the top 10 stock picks of Mika Toikka’s AlphaCrest Capital after the hedge fund increased its stake in Intuit Inc. (NASDAQ:INTU) by 224%.

In its Q1 2022 invest letter, Baron Funds mentioned Intuit Inc. (NASDAQ:INTU). Here is what it said:

“At the company-specific level, with 59% of our holdings posting double-digit declines during the quarter, we had no chance to hold up against the Index that was down less than 5%. The good news is that for the most part, this drawdown did not result in a permanent loss of capital and in many cases, we believe fundamentals have remained robust or improved even though stock prices declined. One example is Intuit (NASDAQ:INTU), the leading provider of accounting software, and our second largest detractor in the quarter. The stock lost 25% of its value (or over $45 billion) due to a miss in quarterly revenues, which was driven by a slower start to the tax season, leading the company to miss consensus estimates for consumer revenues by about $190 million. The slower start to the tax season is of course insignificant to the intrinsic value of the business, as everyone knows there are only two certainties in life and one of them is – TAXES! And so, naturally, Intuit reaffirmed its annual projections. Moreover, results in other segments were ahead of expectations. CEO Sasan Goodarzi explained the outperformance during its quarterly conference call by saying:

‘We have a nearly $300 billion addressable market driven by tailwinds that include a shift to virtual solutions, an acceleration to online and omni-channel capabilities, and digital money offerings. This, combined with the team’s excellence and execution is contributing to the strength of our performance.’

More specifically, Intuit is gaining market share in tax filings (“we are on track to gain share overall again this season”), continues expanding its QuickBooks online offering, which was up 35% year-over-year, and is seeing strong synergies from its Credit Karma acquisition, driven by Intuit’s Lightbox technology, which allows better personalization of offerings to customers (for example, it “doubles the average approval rate for members who apply for credit cards on Credit Karma versus outside of Credit Karma”). The bottom line is that our estimates of Intuit’s intrinsic value were up while the stock price was down and therefore our future expected return has increased.”

6. The Bank of New York Mellon Corporation (NYSE:BK)

AlphaCrest Capital’s Stake Value: $13.205 million

 

Number of Hedge Fund Holders: 54

The Bank of New York Mellon Corporation (NYSE:BK) was formed through the merger of the Mellon Financial Corporation and The Bank of New York in 2007. In Q1 2022, 54 hedge funds were bullish on the stock, with combined stakes of $4.5 billion, up from 49 funds in the earlier quarter, holding stakes in the company valued at $5.17 billion.

In addition to Pfizer Inc. (NYSE:PFE), Meta Platforms, Inc. (NASDAQ:META), and Netflix, Inc. (NASDAQ:NFLX), The Bank of New York Mellon Corporation (NYSE:BK) is one of the top stocks in the portfolio of Mika Toikka’s AlphaCrest Capital.

Ariel Investments published its Q4 2021 letter, where The Bank of New York Mellon Corporation (NYSE:BK) was mentioned. Here is what it said:

“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.

This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. Smaller positions in The Bank of New York Mellon Corporation (BK) also benefited from higher rates, principally with their ability to invest customer cash.”

 

 

 

Click to continue reading and see Top 5 Stock Picks of Mika Toikka’s AlphaCrest Capital.

 

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Disclosure. None. Top 10 Stock Picks of Mika Toikka’s AlphaCrest Capital is originally published on Insider Monkey.