In this article, we discuss the top 10 stocks to buy today according to Kerr Neilson’s Platinum Asset Management.
Kerr Neilson is an Australian investment manager and the co-founder of Platinum Asset Management. He is often dubbed as “Australia’s Warren Buffett” due to his stock-picking strategies and consistent fund performance. Platinum Asset Management specializes in managed funds, listed investment companies, ASX quoted managed funds, investment bonds, and offshore products.
Kerr Neilson co-founded Platinum Asset Management in 1994 along with Andrew Clifford. Neilson currently serves as a non-executive director of the hedge fund, whereas Clifford is the CEO and CIO. Neilson focused his fund’s investments in misunderstood companies without geographical or index weighting restrictions. These companies were mired with management issues, mispricing, or intuitive biases applied by market investors, which were later fixed by Platinum Asset Management. Kerr Neilson handed over the position of managing director and CEO to Andrew Clifford on 1 July 2018.
The hedge fund’s Q4 2021 portfolio is worth over $3.5 billion, with investments concentrated in the communications, materials, information technology, industrials, healthcare, finance, and consumer discretionary sectors. In the December quarter of 2021, Kerr Neilson’s Platinum Asset Management bought 11 new stocks, made additional purchases in 42 securities, sold out of 13 equities, and reduced holdings in 36 companies.
Some of the most notable stocks in Kerr Neilson’s Platinum Asset Management portfolio include Booking Holdings Inc. (NASDAQ:BKNG), Alphabet Inc. (NASDAQ:GOOG), and Meta Platforms, Inc. (NASDAQ:FB), among others discussed in detail below.
Kerr Neilson of Platinum Asset Management
Our Methodology
We used the Q4 2021 portfolio of Kerr Neilson’s Platinum Asset Management for this analysis, selecting the hedge fund’s top 10 stock picks.
Top Stocks to Buy Today According to Kerr Neilson’s Platinum Asset Management
10. Lam Research Corporation (NASDAQ:LRCX)
Platinum Asset Management’s Stake Value: $96,331,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.68%
Number of Hedge Fund Holders: 62
Lam Research Corporation (NASDAQ:LRCX) was incorporated in 1980 and is headquartered in Fremont, California. The company manufactures and markets semiconductor processing equipment used in the creation of integrated circuits. Kerr Neilson’s Platinum Asset Management owns 133,951 shares of Lam Research Corporation, worth $96.3 million, representing 2.68% of the total 13F portfolio.
Lam Research Corporation reported financial results for Q1 2022 on April 20, posting earnings per share of $7.40, missing estimates by $0.11. The $4.06 billion revenue grew 5.53% year-over-year but fell short of analysts’ predictions by roughly $184 million.
On April 22, Jefferies analyst Mark Lipacis maintained a Buy rating on the shares but lowered the price target on Lam Research Corporation to $670 from $869. The analyst noted that Lam Research Corporation missed targets in the March quarter and gave a lower than expected June quarter guidance, but he thinks the bad news is embedded in the stock and he would “buy the concession”. He continues to view the company as a secular growth story due to bigger chips, increasing manufacturing complexity, and “semi-nationalization”.
According to Insider Monkey’s Q4 data, 62 hedge funds were bullish on Lam Research Corporation, compared to 47 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the biggest shareholder of the company, with 1.80 million shares worth about $1.30 billion.
In addition to Booking Holdings Inc., Alphabet Inc., and Meta Platforms, Inc., Lam Research Corporation is a notable stock to buy today according to Kerr Neilson’s Platinum Asset Management.
Here is what Vulcan Value Partners Large Cap Fund has to say about Lam Research Corporation in its Q4 2021 investor letter:
“Lam Research Corp. was a material contributor during the quarter. The company designs and manufactures equipment used in the fabrication of semiconductors. Consolidation and key shifts within the industry have improved the company’s competitive position in the industry and are driving demand for more complex capital equipment. The company’s near-term outlook improved during the quarter as customers announced plans to increase capital spending.”
9. Intercontinental Exchange, Inc. (NYSE:ICE)
Platinum Asset Management’s Stake Value: $101,315,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.81%
Number of Hedge Fund Holders: 56
Intercontinental Exchange, Inc. (NYSE:ICE) is a Georgia-based company that manages regulated exchanges, clearing houses, and listings venues for commodity, fixed income, and capital markets in the United States, the United Kingdom, the European Union, Singapore, Israel, and Canada.
Securities filings for Q4 2021 reveal that Kerr Neilson’s Platinum Asset Management held 740,770 shares of Intercontinental Exchange, Inc., worth $101.3 million, representing 2.81% of the total 13F portfolio. The hedge fund trimmed its Intercontinental Exchange, Inc. stake by 2% in the December quarter.
On April 13, Citi analyst Ben Herbert reiterated a Buy recommendation on Intercontinental Exchange, Inc. but lowered the firm’s price target on the stock to $152 from $160. The analyst reduced multiples on the U.S. exchanges to account for higher geopolitical and macro uncertainty into the Q1 results.
Among the hedge funds tracked by Insider Monkey, Intercontinental Exchange, Inc. was found in the public stock portfolios of 56 hedge funds, compared to 48 funds in the preceding quarter. William Von Mueffling’s Cantillon Capital Management is the leading shareholder of the company, with 3.85 million shares worth $526.5 million.
Here is what Oakmark Funds has to say about Intercontinental Exchange, Inc. in its Q2 2021 investor letter:
“Intercontinental Exchange is one of the largest and, in our view, most successful financial exchange operators in the world. The company was created through a series of shrewd acquisitions executed by their founder and CEO Jeff Sprecher. Sprecher is one of the more capable CEOs we’ve evaluated, having demonstrated a long history of astute capital allocation and a willingness to act and adapt rapidly to new opportunities and competitive threats. Today, Intercontinental Exchange competes in three primary business segments: exchanges, fixed income/data services and mortgage technology. We believe each of these businesses exhibits attractive economic characteristics and that each should grow earnings well in excess of GDP over the long term. Despite this favorable long-term outlook, the company currently trades at a P/E ratio that is roughly in line with the S&P 500. We believe a business with Intercontinental Exchange’s strong competitive position, excellent management team and attractive growth outlook deserves to trade well above a market multiple. We like buying great businesses at average prices and believe Intercontinental Exchange represents a compelling opportunity to do just that.”
8. Ciena Corporation (NYSE:CIEN)
Platinum Asset Management’s Stake Value: $104,089,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.89%
Number of Hedge Fund Holders: 32
Ciena Corporation (NYSE:CIEN) was founded in 1992 and is headquartered in Hanover, Maryland. The company provides telecommunications networking equipment and software services. Kerr Neilson’s fund owned 1.35 million shares of Ciena Corporation in Q4 2021, worth $104 million, representing 2.89% of the total 13F securities.
Morgan Stanley analyst Meta Marshall on April 12 slashed the firm’s price target on Ciena Corporation to $67 from $74 and maintained an Equal Weight rating on the shares. The analyst also lowered her view on the Telecom & Networking Equipment sector to Cautious from In-Line. Although the analyst still expects equipment and storage companies to “sound good” after their Q1 results given their backlog, she is now starting to see signs of weakness.
According to the fourth quarter database of Insider Monkey, 32 hedge funds held long positions in Ciena Corporation, compared to 28 funds in the earlier quarter. The total stakes held in Q4 2021 amounted to $467.2 million, up from $387 million. Ken Griffin’s Citadel Investment Group owned a significant stake in the company, with 814,564 shares worth $62.6 million.
Here is what Giverny Capital Asset Management has to say about Ciena Corporation in its Q4 2021 investor letter:
“As for purchases, in the fourth quarter we established a new position in Ciena Corp. The logic behind our purchase of Ciena is similar to II-VI. Whereas a large chunk of II-VI’s business is in network communications, Ciena is entirely oriented to the sector. It makes optical equipment that transports voice and data on Internet and telecom networks. Ciena has been a technological leader for a long time, but for many years the industry itself was challenging. First, domestically Ciena relied heavily on two customers: Verizon and AT&T. The customers had negotiating power and drove hard bargains. Second, Ciena competed globally against Huawei, the Chinese state-owned telecom components manufacturer. Huawei might be described as caring more about market share than profit and it was hard for Ciena to make money competing against it.”
7. Alibaba Group Holding Limited (NYSE:BABA)
Platinum Asset Management’s Stake Value: $127,548,000
Percentage of Platinum Asset Management’s 13F Portfolio: 3.55%
Number of Hedge Fund Holders: 96
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology that specializes in e-commerce, cloud computing, artificial intelligence, entertainment, mobile commerce, and the internet retail sector. China is planning to pause its months-long campaign against technology companies, which is a positive indication for Alibaba Group Holding Limited. However, the Chinese government is considering pushing the biggest tech companies to allow 1% equity positions to the state, so they can directly participate in corporate decisions.
13F filings for the fourth quarter of 2021 reveal that Kerr Neilson’s Platinum Asset Management owned more than 1 million shares of Alibaba Group Holding Limited, worth $127.5 million, accounting for 3.55% of the total securities.
UBS analyst Jerry Liu reiterated a Buy recommendation on Alibaba Group Holding Limited but lowered the price target on the shares to $140 from $150 on April 11. The analyst is slashing his Q4 estimates to account for the incremental COVID-19 headwinds, in addition to the regulatory and macro impacts from 2021. However, he expects the company will control costs this year, and focus on efficiency improvements in its domestic operations, community group buying, and on-demand delivery initiatives. Shifting Alibaba Group Holding Limited’s Hong Kong listing to a primary one could also be an additional catalyst, the analyst told investors in a research note.
According to Insider Monkey’s Q4 data, 96 hedge funds were long Alibaba Group Holding Limited, compared to 115 funds in the earlier quarter. Alkeon Capital Management is a notable shareholder of the company, with a position worth $540.4 million.
Here is what Altron Capital Management has to say about Alibaba Group Holding Limited in its Q4 2021 investor letter:
“The negative headlines surrounding Alibaba seemingly have no end and have certainly tested our conviction in this investment over the past half year or so. The company’s latest earnings report brought lower margins, partially because of slowdown in China and partially because of increased investment into its businesses. Alibaba also lowered its guidance for the coming year, adding even more pressure to the share price. Furthermore, the Chinese government’s talk of “common prosperity” and Alibaba’s USD 15.5 billion ‘investment’ toward the cause has not helped turn around short-term sentiment for Alibaba investors. Fellow tech giant Didi has also announced that they would delist from New York, sparking fears that Alibaba may be next. Despite all the negative press, we still maintain our bullish position in Alibaba. While increased government regulation will likely result in lower long-term margins and/or increased effective tax rates, we still believe the current share price drastically undervalues the company. The company’s core commerce business is still growing at double-digit rates, as are its cloud business and international ecommerce platform. The cloud business, once at scale, should provide high-margin growth offsetting some of the negatives of new regulations. With Alibaba currently trading at a low-teens multiple of future earnings, we see no reason to sell even though our estimate of the company’s fair value has certainly decreased since we first purchased shares in the company. The issues surrounding Alibaba are complex and addressing each issue surrounding the company would take up far too much space in these letters than we would like. However, any clients that have concerns about our investment in Alibaba that have not been addressed in previous letters or discussions are encouraged to contact us with your questions.
6. Barrick Gold Corporation (NYSE:GOLD)
Platinum Asset Management’s Stake Value: $135,620,000
Percentage of Platinum Asset Management’s 13F Portfolio: 3.77%
Number of Hedge Fund Holders: 46
Barrick Gold Corporation (NYSE:GOLD) is a Toronto-based company that explores, develops, and sells gold and copper properties. The company’s gold mines are located in Argentina, Canada, Côte d’Ivoire, the Democratic Republic of Congo, Dominican Republic, Mali, Tanzania, and the United States.
Securities filings for Q4 2021 report that Kerr Neilson’s Platinum Asset Management held over 7 million Barrick Gold Corporation shares, worth $135.6 million, representing 3.77% of the total 13F portfolio.
On April 13, Barrick Gold Corporation revealed plans to develop one of the world’s largest undeveloped copper and gold deposits – the Reko Diq deposit in Pakistan. This represents a $7 billion investment over two phases, and the project could deliver gold in 5-6 years.
Bernstein analyst Bob Brackett on April 25 downgraded Barrick Gold Corporation to Market Perform from Outperform with a C$27 price target. The stock’s leverage to the gold price is at unsustainable levels, the analyst told investors. Gold is an insurance policy against dovish policy, but the 10-year TIPS yield has jumped “radically towards positive and is likely to increase”, which means the gold price will fall, bringing the gold equities down with it, said the analyst.
According to Insider Monkey’s Q4 database, Barrick Gold Corporation was found in the public portfolios of 46 hedge funds, compared to 41 funds in the preceding quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with 26.8 million shares worth $510.6 million.
Just like Booking Holdings Inc., Alphabet Inc., and Meta Platforms, Inc., Barrick Gold Corporation is on the radar of elite hedge funds.
Here is what ClearBridge Investments International Growth EAFE Strategy has to say about Barrick Gold Corporation in its Q1 2022 investor letter:
“Also within the structural bucket, we have selectively added to our commodity exposure with the purchase of Barrick Gold. Canadian mining company Barrick Gold is a play on operating improvements. The company has aggressively delevered its balance sheet and reduced capex spending to a lower level more permanently, directing its healthy free cash flow to dividends and buybacks.”
5. The Mosaic Company (NYSE:MOS)
Platinum Asset Management’s Stake Value: $150,198,000
Percentage of Platinum Asset Management’s 13F Portfolio: 4.18%
Number of Hedge Fund Holders: 46
The Mosaic Company (NYSE:MOS) is a Florida-based company that produces concentrated phosphate and potash crop nutrients in North America and internationally. Kerr Neilson’s Platinum Asset Management held 3.8 million shares of The Mosaic Company in Q4 2021, worth over $150 million, representing 4.18% of the total 13F securities.
On April 22, The Mosaic Company reported its Q1 results, announcing earnings per share of $1.95, missing consensus estimates by $0.03. Revenue for the period jumped 56.30% year-over-year to $3.84 billion, falling below market predictions by $87.79 million.
Mizuho analyst Christopher Parkinson on April 29 raised the price target on The Mosaic Company to $89 from $59 and kept a Buy rating on the shares. As the global agriculture macro “is increasingly appearing conducive for a multi-year bullish call,” share pullbacks will be “short and shallow, but nonetheless worth waiting for at this juncture,” the analyst told investors in a bullish thesis.
In the fourth quarter of 2021, 46 hedge funds were bullish on The Mosaic Company, up from 40 funds in the third quarter. Eric W. Mandelblatt’s Soroban Capital Partners is a prominent shareholder of the company, with 4.3 million shares worth $172.70 million.
Here is what Ariel Investments has to say about The Mosaic Company in its Q4 2021 investor letter:
“We continue to believe recent aggressive fiscal and monetary policy will drive high levels of intransient (rather than transitory) inflation. Recent inflation numbers have exceeded our hawkish predictions. While we believed the Consumer Price Index might rise +4% in 2021, double the Fed target of +2%; it rose +7%, the highest level in forty years. Ariel Focus Fund has been well positioned for this environment as natural resource and material companies such as The Mosaic Company (MOS) which returned +72.15% for the year. This was one of our two largest holdings at year-end and have performed well very early into 2022.”
4. Trip.com Group Limited (NASDAQ:TCOM)
Platinum Asset Management’s Stake Value: $277,385,000
Percentage of Platinum Asset Management’s 13F Portfolio: 7.72%
Number of Hedge Fund Holders: 35
Trip.com Group Limited (NASDAQ:TCOM) is a Chinese travel service provider that helps clients with accommodation, ticketing, packaged tours, and other travel-related services in China and internationally. Kerr Neilson’s Platinum Asset Management boosted its stake in Trip.com Group Limited by 9% in Q4 2021, with 11.2 million shares worth $277.3 million.
On March 24, Mizuho analyst James Lee maintained a Buy recommendation on Trip.com Group Limited but lowered the firm’s price target on the shares to $32 from $35. According to the analyst, Trip.com Group Limited’s Q4 results exceeded expectations due to a better than expected rebound in travel volume and “prudent” margin management during uncertain times. However, due to higher omicron cases in March and continued implementation of the zero-tolerance policy, the analyst expects the company’s results to be “subdued” in the short-term and international travel to be limited for the foreseeable future.
According to Insider Monkey’s Q4 data, 35 hedge funds were long Trip.com Group Limited, compared to 36 funds in the previous quarter. Ken Fisher’s Fisher Asset Management is one of the leading shareholders of the company, with a position worth approximately $230 million.
Here is what Oakmark Fund has to say about Trip.com Group Limited in its Q3 2021 investor letter:
“Trip.com Group ADR (China), the largest online travel agency in China, and Reckitt Benckiser Group (U.K.), a large global consumer products company, were both previous holdings in the Fund. With significant declines in share price, the stocks again offered the necessary potential upside to be selected for our portfolio.”
3. Micron Technology, Inc. (NASDAQ:MU)
Platinum Asset Management’s Stake Value: $327,269,000
Percentage of Platinum Asset Management’s 13F Portfolio: 9.10%
Number of Hedge Fund Holders: 83
Micron Technology, Inc. (NASDAQ:MU) is headquartered in Boise, Idaho, operating as a manufacturer of memory and storage products that are distributed worldwide. The company designs dynamic random-access memory, flash memory, and USB flash drives. Securities filings for Q4 2021 reveal that Kerr Neilson’s fund owned 3.5 million shares of Micron Technology, Inc., worth $327.2 million, representing 9.10% of the 13F holdings.
On March 29, Micron Technology, Inc. reported earnings for the quarter ending February 2022. The company posted an EPS of $2.14, above consensus by $0.16. Revenue for the period grew about 25% from the prior-year quarter, reaching $7.79 billion, outperforming estimates by $241.85 million.
Mizuho analyst Vijay Rakesh raised the price target on Micron Technology, Inc. on March 30 to $113 from $110 and reiterated a Buy rating on the shares following the “solid” February quarter results. The company reported quarter-over-quarter growth in storage and compute, as well as longer-term tailwinds from product mix and content increases, the analyst told investors. He believes that Micron Technology, Inc. is positioned advantageously heading into 2022.
According to the fourth quarter database of Insider Monkey, 83 hedge funds were long Micron Technology, Inc., up from 63 funds in the earlier quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a significant shareholder of the company, with 5.4 million shares worth $507.30 million.
Here is what Hazelton Capital Partners has to say about Micron Technology, Inc. in its Q3 2021 investor letter:
“It’s hard to explain how shares of Micron Technology, manufacturer of DRAM and NAND semiconductor chips, can fall during a global chip shortage. In most industries, focusing on demand can give you a clear insight into what lays ahead for a company. Today, the memory and storage chip industry is no different. However, in the past, companies focused on market share led to the reckless build out of chip fabrication plants (FABs), oversupply, falling average selling prices (ASPs) of memory and storage chips, lower margins, and declining cash flows. As the industry consolidated – there are now just 3 major producers of DRAM and 5 on the NAND side – rational behavior among the key players began to take hold as competitors began focusing more on R&D. Currently, chip pricing remains cyclical although less so than in the past and that cyclicality has a long-term upward bias. The ongoing transition to newer and more robust platforms (3D 176-layer NAND & 1-Alpha node DRAM) has provided the memory and storage chip industry with improved supply capacity under its current manufacturing footprint, ultimately pressuring ASPs. Over the past three years, as most of the large platform conversions have already taken place, being able to add more bits per wafer has reached a saturation point. With no major FAB build outs planned in the near-term by competitors Samsung or SK Hynix, constrained supply and flattening cost curves should lead to durable and upward sloping ASPs once the recent volatility from the chip shortage subsides.
Currently Micron Technology trades at just 8x 2022 estimated earnings. MU is expecting growth in both DRAM and NAND not just from the supply of more chips to data centers, artificial intelligence, the auto sector, and mobile devices, but also from greater demand for gigabyte capacity per unit within those segments. With a healthy balance sheet, improving return on invested capital, and expanding cash flows, not only should Micron benefit from improving future earnings but its multiple should also reflect the transition to a flattening cost curve.”
2. Microchip Technology Incorporated (NASDAQ:MCHP)
Platinum Asset Management’s Stake Value: $344,378,000
Percentage of Platinum Asset Management’s 13F Portfolio: 9.58%
Number of Hedge Fund Holders: 48
Microchip Technology Incorporated (NASDAQ:MCHP) is an Arizona-based company that designs, develops, and sells semiconductor products for various embedded control applications in the Americas, Europe, and Asia. Kerr Neilson’s Platinum Asset Management boosted its Microchip Technology Incorporated stake by 102% in Q4 2021, holding about 4 million shares worth $344.3 million, representing 9.58% of the total 13F portfolio.
On February 3, Microchip Technology Incorporated declared a $0.253 per share quarterly dividend, a 9.1% increase from its prior dividend of $0.232. The dividend was distributed to shareholders on March 8. The stock delivers a dividend yield of 1.54% as of May 2.
Mizuho analyst Vijay Rakesh on April 20 lowered the price target on Microchip Technology Incorporated to $75 from $87 and kept a Neutral rating on the shares heading into Q1 earnings. While semiconductor suppliers could have an in-line March quarter, there are risks of surplus inventory, the analyst informed investors.
According to the database of Insider Monkey, 48 hedge funds were bullish on Microchip Technology Incorporated in the fourth quarter of 2021, compared to 41 funds in the last quarter. John Overdeck and David Siegel’s Two Sigma Advisors held a significant position in the company, with 2.4 million shares worth $211.6 million.
1. ZTO Express (Cayman) Inc. (NYSE:ZTO)
Platinum Asset Management’s Stake Value: $420,636,000
Percentage of Platinum Asset Management’s 13F Portfolio: 11.70%
Number of Hedge Fund Holders: 28
ZTO Express (Cayman) Inc. (NYSE:ZTO) is a Shanghai-based company that offers express delivery and value-added logistics services in China for e-commerce and traditional merchants. ZTO Express (Cayman) Inc. is the largest holding in the Q4 portfolio of Kerr Neilson’s Platinum Asset Management, with the hedge fund owning about 15 million shares of the company, worth $420.6 million, representing 11.70% of the total 13F portfolio.
On March 18, Citi analyst Lu Xu maintained a Buy rating on ZTO Express (Cayman) Inc. but lowered the price target on the shares to $39.60 from $40.90 following the Q4 results. ZTO Express (Cayman) Inc. is actively exploring its options regarding the American delisting issue in order to gain more proactive control, including but not limited to a Hong Kong primary dual listing, the analyst told investors in a research note. His bullish thesis remains intact given ZTO Express (Cayman) Inc.’s “defensiveness with better-than-peer cost advantage and attractive valuation”.
Insider Monkey’s fourth quarter database suggests that 28 hedge funds were bullish on ZTO Express (Cayman) Inc., up from 20 funds in the prior quarter. The total stakes owned in Q4 2021 amounted to more than $1 billion. Wang Chan’s Serenity Capital is a notable stakeholder of the company, with 7.4 million shares worth $210.6 million.
You can also take a look at Top 10 Small-Cap Stocks Added to Billionaire Mario Gabelli’s Portfolio and 10 Finance Stocks to Buy Today According to George Soros’ Soros Fund Management.
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originally published on Insider Monkey.
