In this article, we discuss the top 10 stock picks of Benjamin Smith’s Laurion Capital Management.
Serving as its partner, Benjamin A. Smith is the co-founder of the New York-based investment management firm, Laurion Capital Management. A magna cum laude graduate from Harvard University in 1993 with a B.A. in Economics, Benjamin Smith has been immersed in the global markets for nearly three decades. Prior to establishing Laurion Capital Management in 2005 alongside co-founder Sheehan Maduraperuma, Smith was a managing director at JPMorgan where he spent eleven years in the Equity Derivatives group. During his last three years at the firm, he organized a nine-person proprietary trading team focused on quantitative equity arbitrage and volatility investing. In the preceding years, Smith ran the United States Structured Options Trading team, covering a wide range of products, including listed, over-the-counter, and exotic options for proprietary businesses.
Based on the 13F filings for the third quarter of 2021, Laurion Capital Management’s portfolio is diversified across 13 sectors, with the healthcare sector proving to be the heaviest, making up 15% of the fund’s portfolio value. A majority of the companies in the fund’s portfolio are large-cap stocks, with stocks scaling up to more than $10 billion in market capitalization making up 35% of the value of the total holding.
Some of the top stocks in the investment portfolio of Laurion Capital Management at the end of the third quarter of 2021 include Alibaba Group Holding Limited (NYSE:BABA), Alphabet Inc. (NASDAQ:GOOG), and PG&E Corporation (NYSE:PCG), among others.
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With this background in mind, let us now look towards the top 10 stock picks of Benjamin Smith’s Laurion Capital Management. We made use of Laurion Capital Management’s 13F portfolio for the third quarter for this analysis.
Top 10 Stock Picks of Benjamin Smith’s Laurion Capital Management
10. Citigroup, Inc. (NYSE:C)
Laurion Capital Management’s Stake Value: $136.4 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 87
Citigroup, Inc. (NYSE:C) is a New York-based multinational investment banking and financial services corporation. Formed by the merger of Citicorp and the Travelers Group in 1998, the company provides investment banking, retail brokerage, corporate banking, and cash management services.
According to the third-quarter 13F filings, Laurion Capital Management owns more than 1.94 million shares worth $136.4 million in Citigroup Inc. (NYSE:C).
Boykin Curry of Eagle Capital Management is one of the biggest stakeholders of Citigroup, Inc. (NYSE:C) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 87 funds were bullish on the company by the end of the June quarter, compared to 90 in the previous quarter.
On October 15, BMO Capital analyst James Fotheringham raised his price target on Citigroup, Inc. (NYSE:C) to $86 from $84, and kept an Outperform rating on the shares of the company.
Besides Alibaba Group Holding Limited (NYSE:BABA), Alphabet Inc. (NASDAQ:GOOG), and PG&E Corporation (NYSE:PCG), Citigroup, Inc. (NYSEC:C) is a notable stock to invest in.
9. Alphabet Inc. (NASDAQ:GOOG)
Laurion Capital Management’s Stake Value: $165.7 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.69%
Number of Hedge Fund Holders: 155
Multinational tech conglomerate holding company and parent of the Google search engine, Alphabet Inc. (NASDAQ:GOOG) rallied on November 8 to reach $2 trillion in market value for the first time, fueled by growth in the company’s advertising and cloud businesses.
Laurion Capital Management owns 62,202 shares in Alphabet Inc. (NASDAQ:GOOG), worth $165.7 million, making up 0.69% of the firm’s Q3 portfolio. Overall, 155 hedge funds owned stakes in the company at the end of June.
Of the elite funds being tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management is among the leading shareholders of Alphabet Inc. (NASDAQ:GOOG), with 1.83 million shares worth more than $4.9 billion.
On November 2, Morgan Stanley analyst Brian Nowak raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,200 from $3,000 and kept an Overweight rating on the shares.
Oakmark Funds, in its Q3 2021 investor letter, mentioned Alphabet Inc. (NASDAQ:GOOG). Here is what the fund said:
“Alphabet, a U.S. communication services provider, was once again a top contributor for the quarter, solidifying its rank as a top contributing stock for the one-year period. The company’s financial results repeatedly exceeded expectations. In particular, its revenue grew faster than expected and its margin trends improved across all segments. In addition, management has executed $24.4 billion of stock repurchases so far in 2021. After further examination, we recently increased our estimate of Alphabet’s intrinsic value based on the company’s better than expected operating leverage and its notable efficiency improvements. As a result, we continue to believe that Alphabet is trading at a significant discount to its intrinsic value.”
8. Bausch Health Companies Inc. (NYSE:BHC)
Laurion Capital Management’s Stake Value: $209.8 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 45
Bausch Health Companies Inc. (NYSE:BHC) is a Canadian multinational pharmaceutical company involved in the development and sales of medications and over-the-counter (OTC) products used in neurology, dermatology, and treatment of other infectious diseases.
According to the third-quarter data, Laurion Capital Management holds more than 7.5 million shares of Bausch Health Companies Inc. (NYSE:BHC), amounting to $209.8 million and representing 0.88% of the investment fund’s portfolio.
Carl Icahn of Icahn Capital is one of the biggest stakeholders of Bausch Health Companies Inc. (NYSE:BHC) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 45 funds were bullish on Bausch Health Companies Inc. (NYSE:BHC) by the end of the June quarter, compared to 42 in the previous quarter.
On November 3, JPMorgan analyst Chris Schott maintained an Overweight rating on Bausch Health Companies Inc. (NYSE:BHC) with a $38 price target.
In its Q1 2021 investor letter, Miller Value Partners, an asset management firm, mentioned Bausch Health Companies Inc. (NYSE:BHC). Here is what the fund said:
“Bausch Health Companies (BHC) climbed 55% during the period. Glenview (6% owner) sent a letter to the company in early February arguing the company has not acted to unlock shareholder value and urging the company to sell its eye care business. Shortly after, activist investor Carl Icahn disclosing a 7.83% stake in the company. The company responded to the filing saying that they remain committed to splitting the business into two parts, but are open to pursuing all opportunities. The company reported strong 4Q results with better-than-expected 2021 guidance. 4Q revenue came in at $2,213M slightly ahead of consensus of $2,165M and EPS of $1.34 beat consensus of $1.12. The company guided for 2021 revenue of $8.6-8.8B coming in ahead of expectations of $8.55B with EBITDA of $3.4-3.55B ahead of $3.46B estimated. The company announced the transition of Paul Herendeen to an advisory role to be succeeded by Sam Eldessouky, previously senior vice president, controller and chief accounting officer. Finally, the company announced the sale of Amoun Pharmaceutical for $740M, which was relatively in line with estimates and should help support debt reduction targets ahead of the planned spin-off of Bausch + Lomb eye care business.”
7. Merck & Co., Inc. (NYSE:MRK)
Laurion Capital Management’s Stake Value: $217.3 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.91%
Number of Hedge Fund Holders: 79
Manufacturer of the world’s most profitable cancer drug, Keytruda, Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based pharmaceutical company that markets pharmaceutical drugs, medicines, vaccines, and animal health products.
On November 1, Argus analyst David Toung upgraded Merck & Co., Inc. (NYSE:MRK) to Buy from Hold, with a $110 price target after what the analyst calls a “strong” Q3 result.
As of Q3 2021, Benjamin Smith’s hedge fund owns over 2.89 million shares of Merck & Co., Inc. (NYSE:MRK), amounting to more than $217.3 million and accounting for 0.91% of his investment firm’s portfolio value. Of the 873 elite funds tracked by Insider Monkey, 79 were long Merck & Co., Inc. (NYSE:MRK) at the end of June.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Merck & Co., Inc. (NYSE:MRK) with 10.6 million shares worth more than $798.6 million.
In its Q1 2021 investor letter, Artisan Partners highlighted a few stocks and Merck & Co., Inc. (NYSE:MRK) was one of them. Here is what the fund said:
“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”
6. Willis Towers Watson Public Limited Company (NASDAQ:WLTW)
Laurion Capital Management’s Stake Value: $230.5 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.97%
Number of Hedge Fund Holders: 70
One of the largest insurance brokerage firms in the world, Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is a global advisory and solutions company that provides products and services to help clients manage risk and optimize benefits.
Based on the third quarter securities filings, Benjamin Smith’s Laurion Capital Management holds 991,800 shares of Willis Towers Watson Public Limited Company (NASDAQ:WLTW), amounting to more than $230.5 million in worth and representing 0.97% of the fund’s portfolio. By the end of the second quarter of 2021, 70 hedge funds out of the 873 tracked by Insider Monkey held stakes in Willis Towers Watson Public Limited Company (NASDAQ:WLTW) worth roughly $5.59 billion. This is compared to 66 hedge funds in the previous quarter with a total stake value of approximately $5.18 billion.
Out of the elite funds tracked by Insider Monkey, Jean-Marie Eveillard’s First Eagle Investment Management is the leading shareholder in Willis Towers Watson Public Limited Company (NASDAQ:WLTW), with 4.74 million shares worth approximately $1.1 billion.
On October 29, Truist analyst Mark Hughes raised his price target on Willis Towers Watson Public Limited Company (NASDAQ:WLTW) to $310 from $290, and kept a Buy rating on the shares of the company.
Similar to Alibaba Group Holding Limited (NYSE:BABA), Alphabet Inc. (NASDAQ:GOOG) and PG&E Corporation (NYSE:PCG), Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is one of the top stocks in Benjamin Smith’s portfolio.
5. Dell Technologies Inc. (NYSE:DELL)
Laurion Capital Management’s Stake Value: $236.6 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.99%
Number of Hedge Fund Holders: 62
Dell Technologies Inc. (NYSE:DELL) is an American multinational technology company headquartered in Round Rock, Texas. Formed as a result of the September 2016 merger of Dell and EMC Corporation, the company provides numerous tech products and information security services.
At the end of the third quarter, Laurion Capital Management held 2.27 million shares of Dell Technologies Inc. (NYSE:DELL), worth $236.6 million, making up 0.99% of the fund’s portfolio holdings.
Paul Singer of Elliot Management is one of the biggest stakeholders of Dell Technologies Inc. (NYSE:DELL) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 62 funds were bullish on the company by the end of the June quarter, compared to 54 in the previous quarter.
On November 4, Citi analyst Jim Suva raised the price target on Dell Technologies Inc. (NYSE:DELL) to $70 from $65.76 and kept a Buy rating on the shares of the company.
Here is what Third Point Management has to say about Dell Technologies Inc. in its Q3 2021 investor letter:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
4. Alibaba Group Holding Limited (NYSE:BABA)
Laurion Capital Management’s Stake Value: $336.7 million
Percentage of Laurion Capital Management’s 13F Portfolio: 1.41%
Number of Hedge Fund Holders: 146
Despite suffering in recent months due to a Chinese government crackdown on dual-listed companies, Alibaba Group Holding Limited (NYSE:BABA), specializing in e-commerce and retail, remains one of the top tech stocks in the world.
By the end of the second quarter of 2021, 146 out of the elite 873 hedge funds tracked by Insider Monkey reported owning stakes in Alibaba Group Holding Limited (NYSE:BABA). The total worth of these stakes is $16.79 billion. This is compared to 135 funds that had stakes in the company in the previous quarter, with a total worth of $15.49 billion.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE:BABA) with 14.2 million shares worth more than $2.1 billion.
On November 2, Barclays analyst Jiong Shao initiated coverage of Alibaba Group Holding Limited (NYSE:BABA) with an Overweight rating and $275 price target. The analyst started the China Technology sector with a Positive view saying investors “cannot ignore or not invest” in China since it is the second largest economy in the world.
Longleaf Partners International Fund, in its Q3 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE:BABA). Here is what the fund had to say:
“Alibaba has non-earning assets which are still in money-losing investment mode (including the cloud business and community group buying), so returns and profitability are deeply understated. As these businesses grow and scale up, they should generate high margins that will accelerate profitability and return on equity (ROE) going forward, despite regulatory pressures at the margin. In the meantime, Alibaba bought $3.7 billion (bn) discounted shares since April 2021, and the company upsized its approved buyback plan, first from $6bn to $10bn in December 2020, and again to $15bn in August 2021.”
3. Viatris Inc. (NASDAQ:VTRS)
Laurion Capital Management’s Stake Value: $457.2 million
Percentage of Laurion Capital Management’s 13F Portfolio: 1.92%
Number of Hedge Fund Holders: 53
Formed through the merger of Mylan and Upjohn, a division of Pfizer Inc. (NYSE:PFE) in late 2020, Viatris Inc. (NASDAQ:VTRS) is a healthcare company that sells a variety of medicines, generics, and over-the-counter (OTC) drugs under the Xanax, Lipitor and Viagra brands.
As of Q3 2021, Laurion Capital Management owned over 33.7 million shares in Viatris Inc. (NASDAQ: VTRS) with an estimated market value of $457.2 million.
Of the 873 elite funds being tracked by Insider Monkey, 53 held stakes in Viatris Inc. (NASDAQ:VTRS) at the end of the second quarter, down from 58 in the preceding quarter. James Flynn of Deerfield Management is one of the leading shareholders in the company.
On November 16, Viatris Inc. (NASDAQ:VTRS) launched its new interchangeable insulin biosimilar drug, Semglee, in both, branded and unbranded formats. According to Bernstein analyst Ronny Gal, Viatris Inc. (NASDAQ:VTRS) effectively provided payers with the option to choose between a high price, high rebate product, or another that carries a lower price and features a lower rebate.
2. Marathon Petroleum Corporation (NYSE:MPC)
Laurion Capital Management’s Stake Value: $468.2 million
Percentage of Laurion Capital Management’s 13F Portfolio: 1.97%
Number of Hedge Fund Holders: 48
Marathon Petroleum Corporation (NYSE:MPC) is an Ohio-based petroleum refining, marketing, and transportation company that operates the largest refining system in the United States.
According to the 13F filings for the third quarter of 2021, Laurion Capital Management holds over 7.57 million shares of Marathon Petroleum Corporation (NYSE:MPC), amounting to more than $468.2 million and representing 1.97% of the investment firm’s portfolio. At the end of the second quarter of 2021, 48 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in Marathon Petroleum Corporation (NYSE:MPC), up from 46 the preceding quarter worth $1.9 billion.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Elliott Management is a leading shareholder in Marathon Petroleum Corporation (NYSE:MPC) with 10.57 million shares worth more than $653.3 million.
On November 15, Wells Fargo analyst Roger Read raised his price target on Marathon Petroleum Corporation (NASDAQ:MPC) to $87 from $73, and kept an Overweight rating on the shares of the company.
1. International Flavors & Fragrances Inc. (NYSE:IFF)
Laurion Capital Management’s Stake Value: $482 million
Percentage of Laurion Capital Management’s 13F Portfolio: 2.03%
Number of Hedge Fund Holders: 52
International Flavors & Fragrances Inc. (NYSE:IFF) is a New York-based corporation that produces and markets flavors, fragrances, and cosmetic actives, with manufacturing operations in over 47 different countries.
On November 12, Deutsche Bank analyst David Begleiter raised his price target on International Flavors & Fragrances Inc. (NYSE:IFF) to $170 from $162, and kept a Buy rating on the shares following what he calls a “mixed” Q3 report.
Benjamin Smith’s Laurion Capital Management currently holds over 3.6 million shares of International Flavors & Fragrances Inc. (NYSE:IFF). These shares are valued at $482 million and account for 2.03% of the hedge fund’s portfolio.
Scott Ferguson of Sachem Head Capital is one of the biggest stakeholders of International Flavors & Fragrances Inc. (NYSE:IFF) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 52 funds were bullish on the company by the end of the June quarter, compared to 55 in the previous quarter.
Rhizome Partners, an investment management firm, mentioned International Flavors & Fragrances Inc. (NYSE: IFF) in its first-quarter 2021 investor letter. Here’s what they said:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
You can also take a peek at 10 Best Dividend Champions to Buy Now and 10 Best Dividend Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management.
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Disclosure: None. Top 10 Stock Picks of Benjamin Smith’s Laurion Capital Management is originally published on Insider Monkey.
