In this article, we discuss the top 9 stock picks of Jacob Rothschild’s RIT Capital Partners.
Jacob Rothschild started his career at N. M. Rothschild & Sons in 1959. In 1971 he was appointed as the chairman of Rothschild Investment Trust. Jacob Rothschild worked solely on Rothschild Investment Trust from 1980 onwards, expanding the scope of the trust via internal growth and acquisitions, and it became an investment holding company in the 1980s. Since numerous financial services businesses were acquired by Rothschild Investment Trust, it no longer qualified as a trust and was subsequently listed on the London Stock Exchange as RIT Capital Partners in 1988.
Jacob Rothschild remained the chairman at RIT Capital Partners from the hedge fund’s initiation in 1988 till September 2019, when he stepped down from the role. He is still the honorary president and one of the leading RIT Capital Partners stakeholders, with his family holding a 21% stake in the firm’s total investments. Currently, Sir James Leigh-Pemberton is the non-executive chairman and Francesco Goedhuis is the chief executive officer of RIT Capital Partners, which is located in Spencer House, London.
RIT Capital Partners purchased two new stocks in Q3 2021, namely Keurig Dr Pepper Inc. (NASDAQ:KDP) and Hippo Holdings Inc. (NYSE:HIPO), whereas the hedge fund sold out of seven stocks including The Coca-Cola Company (NYSE:KO) and The Walt Disney Company (NYSE:DIS). The investment portfolio at Rothschild’s firm is concentrated in the consumer staples, utilities and telecommunications, healthcare, and finance sectors.
As per the 13F filings from September, the portfolio at RIT Capital Partners is valued at over $256 million, with the most notable stocks being T-Mobile US, Inc. (NASDAQ:TMUS), Visa Inc. (NYSE:V), and Keurig Dr Pepper Inc. (NASDAQ:KDP), among others discussed in detail below.
Our Methodology
We used the Q3 portfolio of Jacob Rothschild’s RIT Capital Partners to select his top 10 stock picks, ranking each stock according to Rothschild’s stake value in the holding.
Top Stock Picks of Jacob Rothschild’s RIT Capital Partners
9. Hippo Holdings Inc. (NYSE:HIPO)
RIT Capital Partners’ Stake Value: $1,345,000
Percentage of RIT Capital Partners’ 13F Portfolio: 0.52%
Number of Hedge Fund Holders: 23
Hippo Holdings Inc. (NYSE:HIPO), a California-based home insurance company, is one of the top stock picks of Jacob Rothschild’s RIT Capital Partners as of September this year, with the investment firm owning 287,968 shares in Hippo Holdings Inc. (NYSE:HIPO), worth $1.34 million, representing 0.52% of the total Q3 portfolio.
As of the third quarter, the database of Insider Monkey suggests that 23 hedge funds hold stakes in Hippo Holdings Inc. (NYSE:HIPO), worth $88.1 million. Hippo Holdings Inc. (NYSE:HIPO) posted its Q3 results on November 10, and the EPS missed analysts’ estimates by -$0.01, coming in at -$0.08.
Jefferies analyst Yaron Kinar on November 17 initiated coverage of Hippo Holdings Inc. (NYSE:HIPO) with a Buy rating and an $8 price target. The analyst considered Hippo Holdings Inc. (NYSE:HIPO) as his “top pick” in the insurance sector, noting that a capital raise is not required to achieve growth targets through 2026.
In addition to T-Mobile US, Inc. (NASDAQ:TMUS), Visa Inc. (NYSE:V), and Keurig Dr Pepper Inc. (NASDAQ:KDP), Hippo Holdings Inc. (NYSE:HIPO) is a notable stock in Jacob Rothschild’s Q3 portfolio.
8. NovaGold Resources Inc. (NYSE:NG)
RIT Capital Partners’ Stake Value: $4,533,000
Percentage of RIT Capital Partners’ 13F Portfolio: 1.76%
Number of Hedge Fund Holders: 16
A Canadian mineral exploration company, NovaGold Resources Inc. (NYSE:NG) is engaged in exploring and developing mining properties, and selling exploration rights to mining companies. NovaGold Resources Inc. (NYSE:NG) is listed on the New York Stock Exchange and the Toronto Stock Exchange, and its current project is the development of the Donlin Gold mine in Alaska.
Rothschild’s RIT Capital Partners, as of September this year, holds a $4.5 million stake in NovaGold Resources Inc. (NYSE:NG), which accounts for 1.76% of the firm’s Q3 investments. Overall, 16 hedge funds in the database of Insider Monkey were bullish on NovaGold Resources Inc. (NYSE:NG) as of the third quarter, with a total stake value of $247.8 million. The leading stakeholder in the company is John Paulson’s Paulson & Co, with over 22 million shares worth $152.9 million.
NovaGold Resources Inc. (NYSE:NG) posted its Q3 results on September 29. EPS in the quarter totaled -$0.04, in line with analysts’ consensus estimates.
7. Panacea Acquisition Corp. II (NASDAQ:PANA)
RIT Capital Partners’ Stake Value: $8,775,000
Percentage of RIT Capital Partners’ 13F Portfolio: 3.42%
Number of Hedge Fund Holders: N/A
Panacea Acquisition Corp. II (NASDAQ:PANA) is a blank check company, formed for the purpose of mergers, exchanging and purchasing shares, acquiring assets, corporate reorganization, and similar business combinations with biotech companies across North America and Europe.
Panacea Acquisition Corp. II (NASDAQ:PANA) announced a $150 million initial public offering eight months ago, and the company has yet to create a business combination and generate revenues.
Rothschild, via RIT Capital Partners, holds 900,000 Panacea Acquisition Corp. II (NASDAQ:PANA) shares, worth $8.77 million, representing 3.42% of the firm’s Q3 securities.
Some of the leading stakeholders in Panacea Acquisition Corp. II (NASDAQ:PANA) as of the third quarter include Ari Zweiman’s 683 Capital Partners, Lee Ainslie’s Maverick Capital, and Ken Griffin’s Citadel Investment Group, among others.
6. Ribbit LEAP, Ltd. (NYSE:LEAP)
RIT Capital Partners’ Stake Value: $15,525,000
Percentage of RIT Capital Partners’ 13F Portfolio: 6.05%
Number of Hedge Fund Holders: 23
Ribbit LEAP, Ltd. (NYSE:LEAP), a blank check company recently incorporated in the Cayman Islands, was established with the intention of carrying out mergers, capital stock exchange, acquisition of assets, and similar business combinations with businesses in the financial services and technology sectors, even though Ribbit LEAP, Ltd. (NYSE:LEAP) has stated that an entry in other sectors remains a distinct possibility. As of Q3 2021, Ribbit LEAP, Ltd. (NYSE:LEAP) has not commenced operations and thus there has been no revenue generation.
RIT Capital Partners owns 1.5 million Ribbit LEAP, Ltd. (NYSE:LEAP) shares, worth $15.5 million as of the third quarter, representing 6.05% of the firm’s total investments.
Of the 867 hedge funds tracked by Insider Monkey as of September, 23 funds reported owning stakes worth $218.4 million in Ribbit LEAP, Ltd. (NYSE:LEAP), down from 28 hedge funds in the preceding quarter, with a total stake value of $230.5 million. The leading stakeholder of Ribbit LEAP, Ltd. (NYSE:LEAP) is Daniel Sundheim’s D1 Capital Partners, with 3 million shares valued at $31.38 million.
5. CME Group Inc. (NASDAQ:CME)
RIT Capital Partners’ Stake Value: $23,290,000
Percentage of RIT Capital Partners’ 13F Portfolio: 9.08%
Number of Hedge Fund Holders: 64
One of Jacob Rothschild’s top stock picks from the third quarter is CME Group Inc. (NASDAQ:CME), which is the largest financial derivatives exchange worldwide, trading in multiple asset classes including agricultural products, currencies, energy, interest rates, metals, stock indexes, and cryptocurrencies futures. Some of CME Group Inc. (NASDAQ:CME)’s most notable subsidiaries include the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and The Commodity Exchange.
RIT Capital Partners owns 120,500 shares in CME Group Inc. (NASDAQ:CME), worth $23.29 million as of Q3 2021, representing 9.08% of the hedge fund’s total 13F securities.
CME Group Inc. (NASDAQ:CME) posted its Q3 earnings on October 27. EPS in the period totaled $1.60, beating estimates by $0.05. The $1.11 billion revenue was up 2.7% from the prior-year quarter, but missed estimates by -$36.45 million.
Of the 867 hedge funds in the Q3 database of Insider Monkey, GuardCap Asset Management is the leading CME Group Inc. (NASDAQ:CME) stakeholder, with over 4 million shares worth $778.4 million. Overall, 64 hedge funds reported owning stakes in CME Group Inc. (NASDAQ:CME), with a total stake value of $2.68 billion in the third quarter.
In addition to T-Mobile US, Inc. (NASDAQ:TMUS), Visa Inc. (NYSE:V), and Keurig Dr Pepper Inc. (NASDAQ:KDP), CME Group Inc. (NASDAQ:CME) is a notable stock in Jacob Rothschild’s Q3 portfolio.
4. T-Mobile US, Inc. (NASDAQ:TMUS)
RIT Capital Partners’ Stake Value: $36,211,000
Percentage of RIT Capital Partners’ 13F Portfolio: 14.13%
Number of Hedge Fund Holders: 89
Based in Seattle, T-Mobile US, Inc. (NASDAQ:TMUS) is the second largest wireless network operator in the United States, after Verizon Communications Inc. (NYSE:VZ). RIT Capital Partners owns 283,500 shares in T-Mobile US, Inc. (NASDAQ:TMUS), valued at $36.2 million as of Q3, representing 14.13% of the firm’s portfolio.
T-Mobile US, Inc. (NASDAQ:TMUS) posted on November 2 its Q3 earnings. EPS for the quarter came in at $1.31, beating estimates by $0.82. The $19.62 billion revenue missed estimates by $593.78 million. As of Q3 2021, T-Mobile US, Inc. (NASDAQ:TMUS) reported 106.9 million subscribers.
Morgan Stanley analyst Simon Flannery raised the price target on T-Mobile US, Inc. (NASDAQ:TMUS) to $152 from $148 and kept an Overweight rating on the shares, following a Q3 earnings beat. T-Mobile US, Inc. (NASDAQ:TMUS) remained a top stock pick of the analyst due to its solid growth history, paired with expanding margins and free cash flow from merger synergies.
Andreas Halvorsen’s Viking Global is the largest T-Mobile US, Inc. (NASDAQ:TMUS) stakeholder, with over 10 million shares valued at $1.3 billion. Insider Monkey reported a total of 89 hedge funds who were bullish on T-Mobile US, Inc. (NASDAQ:TMUS) as of Q3 2021, down from 100 in the preceding quarter. The total stakes owned by the Q3 funds amounted to $6.92 billion.
Here is what ClearBridge Investments had to say about T-Mobile US, Inc. (NYSE:TMUS) in its Q1 2021 investor letter:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”
3. IQVIA Holdings Inc. (NYSE:IQV)
RIT Capital Partners’ Stake Value: $38,079,000
Percentage of RIT Capital Partners’ 13F Portfolio: 14.85%
Number of Hedge Fund Holders: 66
IQVIA Holdings Inc. (NYSE:IQV) is the largest human data science technology company, working in collaboration with pharmaceutical companies to carry out clinical trials and clinical research. Jacob Rothschild, via RIT Capital Partners, holds a $38 million position in IQVIA Holdings Inc. (NYSE:IQV), which accounts for 14.85% of the firm’s Q3 portfolio of investments.
At the end of September, 66 hedge funds monitored by Insider Monkey were long IQVIA Holdings Inc. (NYSE:IQV), with a total stake value of $3.75 billion. This is compared to 69 funds holding stakes in the company in Q2, with stakes valued at $3.8 billion. The leading IQVIA Holdings Inc. (NYSE:IQV) stakeholder is Thomas Steyer’s Farallon Capital, with 2.7 million shares worth $647.6 million.
On October 27, the Q3 EPS for IQVIA Holdings Inc. (NYSE:IQV) totaled $2.17, beating estimates by $0.05. Revenue for the period equaled $3.39 billion, up 21.72% year-over-year, outperforming estimates by $40.36 million.
Mizuho analyst Ann Hynes on November 18 raised the price target on IQVIA Holdings Inc. (NYSE:IQV) to $290 from $282 and kept a Buy rating on the shares. The analyst stated that the company’s earnings visibility remains high in the near to mid-term.
2. Visa Inc. (NYSE:V)
RIT Capital Partners’ Stake Value: $49,426,000
Percentage of RIT Capital Partners’ 13F Portfolio: 19.28%
Number of Hedge Fund Holders: 143
Facilitating electronic transfer of funds via Visa credit, debit, and prepaid cards, Visa Inc. (NYSE:V) is one of the most well known US financial services companies. As of Q3, 143 hedge funds reported owning stakes in Visa Inc. (NYSE:V), worth over $26 billion. This is compared to 162 hedge funds in the preceding quarter, with a total stake value of $27.6 billion. Chris Hohn’s TCI Fund Management is the leading Visa Inc. (NYSE:V) stakeholder, with 19.9 million shares valued at $4.44 billion.
RIT Capital Partners owns 222,000 shares in Visa Inc. (NYSE:V), as of the third quarter, worth $49.4 million, representing 19.28% of the firm’s stock portfolio. UBS analyst Rayna Kumar assumed coverage of Visa Inc. (NYSE:V) with a Buy rating and a $275 price target on November 17.
Visa Inc. (NYSE:V) posted Q3 earnings on October 26, with EPS in the quarter being $1.62, beating estimates by $0.08. The revenue came in at $6.65 billion, up 28.58% year-over-year, outperforming estimates by $45.89 million.
Here is what L1 Capital has to say about Visa Inc. (NYSE:V) in its Q3 2021 investor letter:
“In our view, the payment network company, Visa, remains very well positioned to participate in an ever-expanding market for electronic payments. In time, ‘Buy now, Pay Later’ may have a modest impact on Visa’s transaction volumes, however in aggregate, we believe it will have the greater effect of supporting growth in electronic payments more broadly. Nearer term, we believe the recovery in international travel as the world gradually normalises and learns to live with COVID-19 will be materially positive for Visa’s financial performance. eCommerce will also remain a positive key driver for Visa growth.”
1. Keurig Dr Pepper Inc. (NASDAQ:KDP)
RIT Capital Partners’ Stake Value: $79,081,000
Percentage of RIT Capital Partners’ 13F Portfolio: 30.85%
Number of Hedge Fund Holders: 33
As the largest holding in Jacob Rothschild’s Q3 portfolio, Keurig Dr Pepper Inc. (NASDAQ:KDP) represents 30.85% of his fund’s total investments. Rothschild, via RIT Capital Partners, holds 2.31 million shares in Keurig Dr Pepper Inc. (NASDAQ:KDP), worth over $79 million. Keurig Dr Pepper Inc. (NASDAQ:KDP) is an American beverage corporation with more than 125 signature brands under its domain, including Gloria Jean’s Coffees, Krispy Kreme Doughnuts, Cinnabon, Tully’s Coffee, 7Up, Dr. Pepper, and Snapple, among others.
Keurig Dr Pepper Inc. (NASDAQ:KDP) posted its Q3 results on October 28. EPS in the period amounted to $0.44, in line with analysts’ consensus estimates. The revenue was up 7.62% as compared to the previous-year quarter at $3.25 billion, outperforming estimates by $90.96 million.
JPMorgan analyst Andrea Teixeira on October 4 lowered the price target on Keurig Dr Pepper Inc. (NASDAQ:KDP) to $40 from $42, and kept an Overweight rating on the shares. She stated that the company had strong growth potential, even though cost pressures would impact 2022 earnings.
Harris Associates is the leading Keurig Dr Pepper Inc. (NASDAQ:KDP) stakeholder as of September this year, holding a $1.61 billion position in the company. Overall, 33 hedge funds were bullish on Keurig Dr Pepper Inc. (NASDAQ:KDP) in the third quarter, up from 28 funds in the previous quarter.
Here is what ClearBridge Investments has to say about Keurig Dr Pepper Inc. (NASDAQ:KDP) in its Q1 2021 investor letter:
“Our underweights in health care and staples contributed to relative performance during the period. We also prefer to act with some caution in a sector where regulatory risks persist. In consumer staples, we are broadly finding valuations uncompelling and sold Keurig Dr Pepper during the quarter.”
You can also take a look at Retirement Stock Portfolio: 10 Safe Dividend Stocks To Consider and 11 Best Cryptocurrency Stocks To Buy According To Hedge Funds.
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Disclosure: None. Top 9 Stock Picks of Jacob Rothschild’s RIT Capital Partners is originally published on Insider Monkey.
