In this article, we will discuss the top 5 stock picks of Peter Avellone’s Cartenna Capital. If you want to read our detailed analysis of Avellone’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stock Picks of Peter Avellone’s Cartenna Capital.
5. General Dynamics Corporation (NYSE: GD)
Avellone’s Stake Value: $14,082,000
Percentage of Peter Avellone’s 13F Portfolio: 4.02%
Number of Hedge Fund Holders: 37
General Dynamics Corporation (NYSE: GD) is a publicly listed aerospace and military company based in the United States. It was founded in 1899 and is ranked fifth on the list of top 10 stock picks of Peter Avellone’s Cartenna Capital. Shares of General Dynamics Corporation (NYSE: GD) are up 32.37% in the past 12 months.
On August 19, a $136.5 million ID/IQ contract was awarded to General Dynamics Information Technologies, part of General Dynamics Corporation (NYSE: GD), to consolidate all Tier 1 information technology. On July 29, Credit Suisse raised the price target on General Dynamics Corporation (NYSE: GD) from $182 to $198 and maintained a “Neutral” rating on the shares.
The hedge fund chaired by Peter Avellone holds 74,800 shares in General Dynamics Corporation (NYSE: GD), worth $14.08 million. Hedge funds are loading up on General Dynamics Corporation (NYSE: GD), as Insider Monkey’s data shows that 37 hedge funds held a stake in the company in the second quarter of 2021, compared to 31 funds in the previous quarter.
Oakmark Funds, in its first-quarter 2021 investor letter, mentioned General Dynamics Corporation (NYSE: GD). Here is what the fund said:
“The second new U.S. equity purchase was General Dynamics, a leading U.S. defense contractor and owner of the world’s premier business jet franchise (Gulfstream). We were able to purchase this high-quality and durable business at a meaningful discount to our estimate of its intrinsic value after a series of near-term concerns hurt its share price. Taking a longer term view, the company’s business jet franchise should benefit from a multi-year investment program in new, differentiated product. Also, its free cash flow conversion is set to improve materially and the company is poised to benefit from a highly visible ramp up in revenue related to next generation nuclear-powered submarines. As these positives come into clearer view, we expect sentiment to improve, along with the company’s share price.”
4. Martin Marietta Materials, Inc. (NYSE: MLM)
Avellone’s Stake Value: $14,291,000
Percentage of Peter Avellone’s 13F Portfolio: 4.08%
Number of Hedge Fund Holders: 34
Martin Marietta Materials, Inc. (NYSE: MLM) is a natural resource-based building materials firm that sells aggregates and heavy construction materials. The company was incorporated in 1939 and is placed fourth on the list of top 10 stock picks of Peter Avellone’s Cartenna Capital. Martin Marietta Materials, Inc. (NYSE: MLM) shares have returned 79.32% to investors over the course of the past 12 months.
On August 31, Martin Marietta Materials, Inc. (NYSE: MLM) agreed to buy Ferrovial, S.A.’s (OTC: FRRVF) Southern Crushed Concrete operation in the United States for $140 million. On August 2, DA Davidson analyst Brent Thielman raised the price target on Martin Marietta Materials, Inc. (NYSE: MLM) to $400 from $350 but maintained a “Neutral” rating on the shares.
Martin Marietta Materials, Inc. (NYSE: MLM) is a new arrival on Peter Avellone’s portfolio, as his hedge fund owns about 40,620 shares of the company, worth $14.29 million. Robert Joseph Caruso’s Select Equity Group is Martin Marietta Materials, Inc.’s (NYSE: MLM) most significant stakeholder, with 3.09 million shares worth $1.09 billion.
3. Raytheon Technologies Corporation (NYSE: RTX)
Avellone’s Stake Value: $14,588,000
Percentage of Peter Avellone’s 13F Portfolio: 4.17%
Number of Hedge Fund Holders: 53
Raytheon Technologies Corporation (NYSE: RTX) is a defense and aerospace business that delivers products and services to commercial, military, and government clients worldwide. It was founded in 2020 and ranks third on the list of top 10 stock picks of Peter Avellone’s Cartenna Capital.
On August 13, The US Department of Defense awarded Raytheon Technologies Corporation (NYSE: RTX) a $960 million indefinite-delivery/indefinite-quantity (IDIQ) contract. On July 28, Raytheon Missiles and Defense, one of four business segments of Raytheon Technologies Corporation (NYSE: RTX), was granted a $482.9 million modification to contract FA8675-21-C-0034 for Production Lot 35 of the Advanced Medium-Range Air-to-Air Missile (AMRAAM).
Cartenna Capital holds more than 171,000 shares in Raytheon Technologies Corporation (NYSE: RTX), worth $14.59 million. This represents 4.17% of their portfolio. Raytheon Technologies Corporation (NYSE: RTX) saw a decrease in hedge fund sentiment recently. The number of hedge fund positions declined to 53 in the second quarter of 2021 compared to 58 positions in the previous quarter.
ClearBridge Investments, in its second-quarter 2021 investor letter, mentioned Raytheon Technologies Corporation (NYSE: RTX). Here is what the fund has to say about Raytheon Technologies in its letter:
“Broader market leadership was a relative benefit for the ClearBridge Large Cap Value Strategy, which outperformed the Russell 1000 Value Index in the second quarter… Separately, Raytheon Technologies benefited from an improving health outlook that is contributing to a faster than anticipated recovery in air travel, which should drive stronger results for Raytheon’s commercial aerospace business.”
2. TE Connectivity Ltd. (NYSE: TEL)
Avellone’s Stake Value: $14,873,000
Percentage of Peter Avellone’s 13F Portfolio: 4.25%
Number of Hedge Fund Holders: 39
TE Connectivity Ltd. (NYSE: TEL) and its subsidiaries produce and market connectivity and sensor systems. It was incorporated in 2000 and stands second on the list of top 10 stock picks of Peter Avellone’s Cartenna Capital.
On July 29, Truist analyst William Stein raised the price target on TE Connectivity Ltd. (NYSE: TEL) to $149 from $139 and maintained a “Hold” rating on the shares. On July 28, TE Connectivity Ltd. (NYSE: TEL) announced earnings for the third quarter of 2021. It reported earnings per share of $1.79, surpassing the estimates by $0.21. Revenue over the period was $3.8 billion, up 52.0% year over year, beating the analysts’ expectation by $70 million.
Cartenna Capital holds 110,000 shares in TE Connectivity Ltd. (NYSE: TEL), worth over $14.87 million, representing 4.25% of their portfolio. The stock is a new arrival on Peter Avellone’s portfolio. Harris Associates is a leading shareholder of TE Connectivity Ltd. (NYSE: TEL), with 9.38 million shares worth $1.27 million.
In its first quarter 2021 investor letter ClearBridge Investments, mentioned TE Connectivity Ltd. (NYSE: TEL). Here is what the fund said:
“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 information technology (IT), where TE Connectivity performed well but trailed the sector in the first quarter after a strong 2020.”
1. Howmet Aerospace Inc. (NYSE: HWM)
Avellone’s Stake Value: $16,546,000
Percentage of Peter Avellone’s 13F Portfolio: 4.73%
Number of Hedge Fund Holders: 47
Howmet Aerospace Inc. (NYSE: HWM) is an international provider of sophisticated engineering solutions for the aerospace and transportation industries. Howmet Aerospace Inc. (NYSE: HWM) ranks first on the list of top 10 stock picks of Peter Avellone’s Cartenna Capital. Howmet Aerospace Inc. (NYSE: HWM) shares have returned 79.92% to investors over the course of the past 12 months.
On August 19, Howmet Aerospace Inc. (NYSE: HWM) announced that it issued 3.000% notes due 2029, whose principal amount is $700 million. The proceeds will be used for general corporate purposes and to fund the purchase price for up to $600 million of outstanding 6.875% Notes due 2025. On August 4, Howmet Aerospace Inc. (NYSE: HWM) declared earnings for the second quarter of 2021. It posted earnings per share of $0.22, beating the estimates by $0.00. Revenue for the second quarter was $1.20 billion, down 4.63% YoY, missing the anticipation by $20.90 million.
Peter Avellone’s Cartenna Capital holds 480,000 shares in Howmet Aerospace Inc. (NYSE: HWM), worth $16.55 million, representing 4.73% of their portfolio. Cartenna Capital has increased its stake in the firm by 22% in the second quarter of 2021. Howmet Aerospace Inc. (NYSE: HWM) saw a decrease in hedge fund sentiment recently, as Insider Monkey’s data shows that 47 hedge funds held stake in the company in the second quarter of 2021, compared to 51 funds in the quarter earlier.
In its fourth-quarter 2020 investor letter, FPA Crescent Fund mentioned Howmet Aerospace Inc. (NYSE: HWM). Here is what the fund said:
“Howmet saw its stock price decline by around two-thirds from their Q1 2020 highs. Howmet’s price increased about three times from its low and ended the year at its all-time high. The value of its necessary and large market share business did not fluctuate as much as its stock price.”
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