Below are the top 5 ESG stocks Al Gore’s $25 billion hedge fund is buying. For a comprehensive list, please see Top 10 ESG Stocks Al Gore’s $25 Billion Hedge Fund Is Buying.
5. Becton, Dickinson, and Company (NYSE: BDX)
Generation Investment Management has been holding Becton, Dickinson, and Company (NYSE: BDX) shares since 2006. The health care equipment manufacturer is the fifth largest stock holding of Al Gore’s portfolio. Indeed, the sustainable investing themed hedge fund has raised its stake in Becton, Dickinson, and Company by 38% in the latest quarter.
Shares of Becton, Dickinson, and Company grew close to 200% in the last decade. Moreover, the company has raised dividends in the past 48 successive years. Its dividend yield currently stands around 1.32%.
Becton, Dickinson, and Company were in 62 hedge funds’ portfolios at the end of the September quarter compared to the previous all-time high of 56. Here’s what Brown Advisory stated about Becton, Dickinson, and Company in a shareholders letter:
“Medical products supplier Becton, Dickinson & Co. issued a mandatory convertible preferred security during the quarter. We acquired a small position after finding the features of the newly issued security attractive, particularly the 6% annual coupon.”
4. DENTSPLY SIRONA Inc. (NASDAQ: XRAY)
The dental product’s manufacturer DENTSPLY SIRONA Inc. (NASDAQ: XRAY) stock price underperformed in the past couple of years. Despite that, Generation Management has been adding to its stake. It is currently the fourth largest stock holding of Al Gore, accounting for 4.49% of the overall portfolio valued at $845 million.
The sluggish revenue performance has been impacting the share price of DENTSPLY SIRONA over the years. The company has generated around $900 million in quarterly revenue during the September quarter, down 7% from the past year period.
3. Baxter International Inc. (NYSE: BAX)
The health care equipment developer Baxter International Inc. (NYSE: BAX) is one of the most favorite stocks of Al Gore. The sustainable investing hedge fund has raised its stake in Baxter by 11% to 11.8 million shares, accounting for 5.06% of the overall portfolio.
The number of hedge fund positions in Baxter International stood around 51 at the end of September, down from the all-time high of 59. Some hedge funds including Oakmark Funds believe BAX shares are overvalued. Here’s what Oakmark Funds stated:
“We first bought Baxter in the fourth quarter of 2016 with the belief that new CEO Joe Almeida could increase the company’s margins substantially. Since then, margins have increased from 11% to over 18%, and the share price has doubled. With this strong performance, the stock no longer sells at a meaningful discount to our estimate of intrinsic value, so we sold our holdings.
2. The Charles Schwab Corporation (NYSE: SCHW)
The asset management and brokerage giant The Charles Schwab Corporation (NYSE: SCHW) is the second-largest stock holding of Generation Management. The hedge fund has raised its stake by 12% in Charles Schwab during the third quarter this year, increasing the total invested value to over $1 billion.
The firm first initiated a stake in Charles Schwab in 2016. Shares of Charles Schwab soared 62% in the last five years. It also offers a healthy dividend yield of 1.4%.
Several other hedge fund managers are also bullish on Charles Schwab. Cedar Creek Partners, which returned 5.4% in the third quarter, is among the bulls. Here’s what Cedar Creek Partners said:
“We added three new positions – Charles Schwab (SCHW) and two smaller positions we are not revealing as we are still looking to buy more. The Schwab thesis is rather simple. They are a first-class company that is always innovating and we believe they should be able to gain significant synergies with the TD Ameritrade acquisition over the coming years.”
1. Cognizant Technology Solutions Corporation (NASDAQ: CTSH)
The professional services company Cognizant Technology Solutions Corporation (NASDAQ: CTSH) is the largest stock holding of Generation Management stock portfolio. The hedge fund currently holds 16 million shares of Cognizant Technology valued at $1.1 billion. The firm first initiated a stake in Cognizant in 2019.
The shares of Cognizant Technology appreciated 30% in the last twelve months amid robust digital revenue growth trends. Its digital revenue grew 42% year over year in the September quarter this year.
Diamond Hill Capital has highlighted few stocks in the shareholders’ letter and Cognizant Technology Solutions is among them. Here’s what Diamond Hill Capital stated:
“Cognizant Technology Solutions Corp. (Cl A) is an information technology services company that has encountered challenges in its financial services and healthcare industry verticals, which combined represent over 60% of revenue. We are supportive of steps the company is taking to reaccelerate revenue growth after a period of overemphasizing operating margin expansion.”
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