This article discusses the top 10 stock picks of Murray Stahl’s Horizon Asset Management at the end of the second quarter.
Horizon Asset Management’s parent firm, Horizon Kinetics, was established by Murray Stahl in 1985. Prior to that, Stahl worked as a senior portfolio manager and research analyst at Bankers Trust Company for 16 years. Murray Stahl graduated with a B.A., an M.A., and an M.B.A. from Pace University.
Horizon Asset Management is a licensed organization that offers investment advice. The headquarters of Horizon Asset Management is in New York. Their most recent 13F filing for Q2 2022 showed managed 13F securities valued at $4.78 billion with a top 10 holdings concentration of 66.74%. The real estate sector comprises 53.22% of the total 13F securities held. Texas Pacific Land Corporation (NYSE:TPL) is the largest position of Horizon Asset Management, with 1.505 million shares. During the first quarter of 2022, Murray Stahl’s Horizon Asset Management executed a portfolio rebalance, with the investment hedge fund selling out 17 positions, reducing 139 investments and adding 13 new assets and boosting exposure to 81 existing investments.
Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Microsoft Corporation (NASDAQ:MSFT) were among the top holdings in Murray Stahl’s Horizon Asset Management portfolio at the end of the second quarter of 2022.
Horizon Asset Management has a $2.061 million stake in the tech giant Alphabet Inc. (NASDAQ: GOOG). In the first week of August 2022, Ivan Feinseth, an analyst with Tigress Financial, increased his price target for Alphabet from $183 to $186 and maintained a Strong Buy rating on the stock in light of his belief that the company’s recently released Q2 results demonstrate the resilience of its core businesses in Cloud and Search. Additionally, continuous investments in AI continue to produce “increasingly targeted and beneficial experiences for users and enterprises,” according to Feinseth.
Our Methodology
At Insider Monkey, we track the 13F holdings of over 900 hedge funds. We selected the stocks for this article based on the regulatory filing that Horizon Asset Management submitted with SEC for the quarter ending June 30, 2022. Let’s start our list of Top 10 Stock Picks of Murray Stahl’s Horizon Asset Management.
10. Viper Energy Partners LP (NASDAQ:VNOM)
Horizon Asset Management’s Stake Value: $67.214 million
Number of Hedge Fund Holders as of Q1 2022: 12
Viper Energy Partners LP (NASDAQ:VNOM) was founded in 2013 and is based in Midland, Texas. It is a subsidiary of Diamondback Energy, Inc and it owns, acquires, and exploits oil and natural gas properties in North America.
The value of American reserves is anticipated to rise when Europe gradually stops importing fossil fuels from Russia. Viper Energy Partners LP (NASDAQ:VNOM) has reserves of 127.9 million barrels of oil. A massive 9%+ dividend yield is paid by the stock. It has gained 14.97% in the past six months and 41.35% year to date.
According to Travis Stice, chief executive officer of Viper Energy Partners LP (NASDAQ:VNOM), Viper had a stellar second quarter as oil production increased by 9% quarter over quarter, which, when paired with rising commodity prices and no inflationary cost pressures, led to a 20% rise in cash available for distribution. Importantly, Diamondback’s record 4.8 net wells turned to production during the quarter were the main factor in the production’s considerable increase. Viper is increasing its guidance for oil production for the full year 2022 by 4% at the midpoint due to Diamondback’s consistent focus on developing Viper’s high concentration royalty acreage, primarily in the Northern Midland Basin.
09. Archer-Daniels-Midland Company (NYSE:ADM)
Horizon Asset Management’s Stake Value: $85.786 million
Number of Hedge Fund Holders as of Q1 2022: 42
Archer-Daniels-Midland Company (NYSE:ADM) stock has gained 13.77% in the past six months and 27.56% year to date. In its latest quarter earnings report announced on July 26, the company’s EPS GAAP actual of $2.18 beat the estimate by $0.43, and revenue figure of $27.78 billion beat the estimate by $2.39 billion.
On August 12, Sam Margolin, an analyst with Wolfe Research, began covering Archer Daniels in the month of August 2022, with an Outperform rating and a $117 price target. In a research note, the analyst claims that the stock’s Nutrition business alone provides “very competitive dividend growth.” On the basis of the biofuels policy, Margolin is equally positive about the underlying commodity picture.
Like Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Microsoft Corporation (NASDAQ:MSFT), Archer-Daniels-Midland Company (NYSE:ADM) is one of the best stocks to buy according to Murray Stahl’s Horizon Asset Management.
08. Civeo Corporation (NYSE:CVEO)
Horizon Asset Management’s Stake Value: $89.875 million
Number of Hedge Fund Holders as of Q1 2022: 9
Civeo Corporation (NYSE:CVEO) is headquartered in Houston, Texas. It provides hospitality services to the natural resource industry in Canada, Australia, and the United States. The company serves oil, mining, engineering, and oilfield and mining service companies.
During the second quarter of 2022, EPS GAAP Actual of $0.54 beat the estimates by $0.03, and revenue of $184.95 million beat the estimates by $7.74 million. The stock has gained 25.86% in the past six months and 48.11% year to date.
In July 2022, Civeo Corporation (NYSE:CVEO) announced that with regard to its Wapasu Lodge in the Canadian oil sands, Imperial Oil Resources Limited had renewed its contract with Civeo to continue receiving lodging and other services from the company. Highlights of the contract award include a 12-year, take-or-pay agreement with daily minimum occupancies that balances rate reductions with a number of pre-planned cost-saving efforts. The new deal will go into effect on November 1 of 2022 and last until October 31, 2034. It has over C$500 million in take-or-pay revenues that are guaranteed, as well as a sizable upside above take-or-pay based on current occupancy levels.
07. Cheniere Energy, Inc. (NYSE:LNG)
Horizon Asset Management’s Stake Value: $99.544 million
Number of Hedge Fund Holders as of Q1 2022: 62
Cheniere Energy, Inc. (NYSE:LNG) was incorporated in 1983 and is headquartered in Houston, Texas. Being an energy infrastructure company, it primarily engages in liquefied natural gas (LNG) related businesses in the United States.
On August 5, Cheniere Energy, Inc. (NYSE:LNG) price target was increased by the firm to $167 from $159 by Mizuho analyst Robert Mosca, who also maintained a Buy recommendation on the stock. According to Mosca, the corporation “posted another blowout quarter” for investors.
Over the last twelve months, the company’s finances significantly improved year over year. According to its latest quarter’s earnings report announced recently, the stock has EPS GAAP Actual of $2.90 missing the estimate by $0.50; however, with a revenue figure of $8.01 billion, it has surpassed the estimates by a whooping $1.59 billion. The stock has gained 35.76% in the past six months and 54.83% year to date.
Documents acquired by Reuters show that American regulators expressed concerns about Cheniere Energy, Inc. (NYSE:LNG) choice to erect more polluting gas-fired turbines at its Gulf Coast liquefied natural gas terminals in Texas and Louisiana years before they started running. The records reveal that Cheniere Energy, Inc. (NYSE:LNG), the leading US LNG exporter, may have had a chance to avert its present conflict with impending regulatory limitations on formaldehyde and other hazardous chemical emissions.
06. Intercontinental Exchange, Inc. (NYSE:ICE)
Horizon Asset Management’s Stake Value: $100.194 million
Number of Hedge Fund Holders as of Q1 2022: 60
Atlanta, Georgia serves as the home base for Intercontinental Exchange, Inc. (NYSE:ICE), a company that was established in 2000. The dividend paid by the corporation has increased over the last five years, with a five-year growth rate of 18.65%. Intercontinental Exchange, Inc. (NYSE:ICE) also declared a quarterly dividend of $0.38 per share, payable on September 30 to stockholders with records as of September 15th. The stock has been down 18.12% so far this year and 12.14% over the last six months.
On August 5, while keeping a Buy recommendation for the shares, analyst Brian Bedell from Deutsche Bank raised the company’s price target on the ICE from $114 to $124. Investors are told in a research note by Bedell that the company had a “good” Q2 and that the underlying sales trend estimate has improved.
Just like Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Microsoft Corporation (NASDAQ:MSFT), Intercontinental Exchange, Inc. (NYSE:ICE) is one of the best stocks to buy according to Murray Stahl’s Horizon Asset Management.
05. Brookfield Asset Management Inc. (NYSE:BAM)
Horizon Asset Management’s Stake Value: $103.324 million
Number of Hedge Fund Holders as of Q1 2022: 35
Brookfield Asset Management Inc. (NYSE:BAM) was founded in 1997 and based in Toronto, Canada with additional offices across Northern America; South America; Europe; Middle East, and Asia. It is an alternative asset manager and REIT/Real Estate Investment Manager firm that focuses on real estate, renewable power, infrastructure and venture capital, and private equity assets.
On July 28, ahead of quarterly results, Credit Suisse analyst Andrew Kuske maintained an Outperform rating on Brookfield Asset Management Inc. (NYSE:BAM) shares while lowering his price target from $71.50 to $62.50. In general, the analyst thinks that Brookfield Asset Management Inc. (NYSE:BAM) core platform and business are still well-positioned for the long term and are gaining from quicker fund raising, deal deployment, and monetization. His current projections and valuation could increase if these efforts continue to succeed, the insurance industry continues to expand, and the repackaging of real estate proceeds more quickly than expected.
As per the latest quarter’s earnings results announced on August 11, the stock has missed the EPS estimate by $0.42 with an EPS GAAP Actual of $0.34 but has beaten the revenue target by $4.87 billion with an actual revenue figure of $24.29 billion. The company has a record $111 billion of cash and capital available for investment, it will be incredibly interesting to see how it deploys these funds. The company shares are reasonably valued at 17x distributable earnings and 2x book value. The stock has lost 5.19% in the past six months and 10.39% year to date.
04. Wheaton Precious Metals Corp. (NYSE:WPM)
Horizon Asset Management’s Stake Value: $123.016 million
Number of Hedge Fund Holders as of Q1 2022: 28
Wheaton Precious Metals Corp. (NYSE:WPM) was founded in 2004 and is headquartered in Vancouver, Canada. It is a streaming company, that primarily sells precious metals in Canada and internationally. The company sells gold, silver, palladium, and cobalt deposits.
As per the latest quarter’s earnings results announced on August 11, the company has achieved a revenue figure of $303 million versus the consensus estimate of $291.16 million. According to Randy Smallwood, president, and chief executive officer of Wheaton Precious Metals, “Throughout the first half of 2022, we have focused on optimising our portfolio and further increasing our financial flexibility to ensure that we are well positioned to respond to accretive growth opportunities and continue creating value for our shareholders.” The stock has a 1.78% forward dividend yield with a payout ratio of 23.49% and has lost 19.64% in the past six months and 18.50% year to date.
On August 12, Wheaton Precious Metals Corp. (NYSE:WPM) price target was decreased by Canaccord analyst Carey MacRury from C$70 to C$68 while maintaining a Buy recommendation for the stock.
03. CACI International Inc (NYSE:CACI)
Horizon Asset Management’s Stake Value: $131.493 million
Number of Hedge Fund Holders as of Q1 2022: 25
CACI International Inc (NYSE:CACI) was founded in 1962 and is headquartered in Reston, Virginia. The company, together with its subsidiaries, provides expertise and technology to enterprise and mission customers in support of national security missions and government modernization/transformation in the intelligence, defense, and federal civilian sectors.
According to the latest quarter’s earnings results announced on August 10, the stock has beaten the EPS estimate by $0.05 with an EPS GAAP Actual of $3.93 but has missed the revenue target by $13.71 million with an actual revenue figure of $1.64 billion. The stock does not currently pay a dividend and has gained 12.51% in the past six months and 2.92% year to date.
On August 11, Unity Software Inc. (NYSE:U) said that CACI International Inc (NYSE:CACI) had given it a three-year, multi-million dollar contract to further the development of smart human-machine interfaces by CACI International Inc (NYSE:CACI). According to Unity, this victory represents the single largest Digital Twin Solutions contract it has ever received. It is also a significant arrangement that solidifies Unity as the go-to real-time 3D platform for future systems design and simulation initiatives across the US Government.
02. Franco-Nevada Corporation (NYSE:FNV)
Horizon Asset Management’s Stake Value: $146.569 million
Number of Hedge Fund Holders as of Q1 2022: 29
The Franco-Nevada Corporation (NYSE:FNV) was founded in 1983 and is headquartered in Toronto, Canada. It operates as a gold-focused royalty and streaming company in Latin America, the United States, Canada, and internationally.
As per the latest quarter’s earnings results announced on August 10, the company produced record revenues of $352 million, an increase of 1.5% over the prior year. Higher realised oil and gas prices from its Energy holdings were the primary driver of the gain. The top line beat the estimates by $3.47 million. In the three months ending in June, precious metal assets accounted for 69.2% of revenues (gold, silver, and platinum group metals made up 54.1%, 10.2%, and 4.9%, respectively).
At the end of the second quarter of 2022, the company had $911 million in cash on hand, an increase from the $539 million recorded at the end of 2021. In the first half of 2022, it reported an operating cash flow of $488 million, up from $469 million in the corresponding period of the previous year. Since Franco-Nevada Corporation (NYSE:FNV) has no debt, it can use its free cash flow to grow its holdings and distribute dividends. Franco-Nevada Corporation (NYSE:FNV) currently has $1.9 billion in the capital on hand.
01. Texas Pacific Land Corporation (NYSE:TPL)
Horizon Asset Management’s Stake Value: $2,240.474 million
Number of Hedge Fund Holders as of Q1 2022: 19
Texas Pacific Land Corporation (NYSE:TPL) was founded in 1888 and is headquartered in Dallas, Texas. It engages in land and resource management, water services, and operations businesses. The company’s Land and Resource Management segment manages approximately 880,000 acres of land.
On August 3, Texas Pacific Land Corporation (NYSE:TPL) reported quarterly earnings of $15.37 per share, missing the EPS GAAP actual estimate by $0.08 per share. This contrasts with earnings per share of $7.36 in the prior year. Texas Pacific Land Corporation (NYSE:TPL) shares have added about 33.16% since the beginning of the year versus the S&P 500’s decline of 10.77%. The stock comprises 47% of Horizon Asset Management’s portfolio.
In its Q2 2022 investor letter, LRT Capital Management mentioned Texas Pacific Land Corporation (NYSE:TPL) and explained its insights for the company. Here is what the fund said:
“Long time readers will know that we rarely invest in commodity businesses. However, there are periods in the market where commodity-based businesses outperform the broad indexes by a wide margin. Therefore, to have balance in the portfolio, we have long searched for a competitively advantaged company in the commodity space. We believe that Texas Pacific Land Trust (NYSE:TPL), meets that criterion. Formed out of assets of formerly bankrupt railroads, TPL controls the largest acreage of land in the Permian basin – the center of the US shale oil industry.
The company has two main sources of income:
- royalties from oil & gas extracted on its properties – essentially a free call option on future oil prices and production; and
- a water business which develops water resources and sells services to the fracking industry.
We see TPL as an effective way to diversify the portfolio into a commodity exposed business that has a history of smart capital allocation and low risk of financial distress during periods of low oil prices. The company has no debt, and $281 million in cash. The company uses most of its cash flows to pay dividends and repurchase shares.”
You can also look at the 7 Best Stocks to Buy According to Stephen Feinberg’s Cerberus Capital Management and 10 Stocks You Should Sell in 2022 According to Billionaire Dan Loeb.
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Disclosure: None. Top 10 Stock Picks of Murray Stahl’s Horizon Asset Management is originally published on Insider Monkey.
