In this article, we discuss the top 5 stock picks of William Von Mueffling’s Cantillon Capital Management. If you want to read our detailed analysis of Mueffling’s history, investment philosophy, and hedge fund performance, go directly to Top 10 Stock Picks of William Von Mueffling’s Cantillon Capital Management.
5. American Tower Corporation (NYSE:AMT)
Cantillon Capital Management’s Stake Value: $471,366,000
Percentage of Cantillon Capital Management’s 13F Portfolio: 3.93%
Number of Hedge Fund Holders: 52
American Tower Corporation (NYSE:AMT) is a prominent independent multi-tenant communications real estate owner, operator, and developer. More than 220,000 cell towers are owned and operated by American Tower Corporation (NYSE:AMT) in the United States, Asia, Latin America, Europe, and Africa. Following the acquisition of CoreSite, it also owns and runs 25 data centers in eight U.S. markets.
American Tower Corporation (NYSE:AMT) has a strong dividend history. Since 2012, the corporation has increased its dividend each year. On September 22, American Tower (NYSE:AMT) announced a quarterly dividend of $1.47 per share, a 2.8% increase over the previous payout of $1.43.
On October 3, KeyBanc analyst Brandon Nispel reduced his price objective on American Tower Corporation (NYSE:AMT) from $300 to $264 and maintained an ‘Overweight’ rating on the stock. The analyst predicted that all towers would likely fall short of 2023 adjusted funds from operations estimates due to rising interest rates.
Akre Capital Management is a prominent stakeholder of American Tower Corporation (NYSE:AMT), with 6.97 million shares of the company, worth over $1.78 billion. Insider Monkey found 52 hedge funds bullish on American Tower Corporation (NYSE:AMT) at the close of the second quarter of 2022. Those funds held collective stakes in the company valued at $4.37 billion, up from $4.10 billion in the first quarter of 2022, when 50 hedge funds were long AMT shares.
Here is what Baron Funds had to say about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter:
“American Tower is a leading global tower company with 220,000 communication sites globally and over 40,000 in the U.S. We added to our position during the market dislocation and as it became increasingly clear that the company would put permanent equity financing in place at better-than-expected terms for its previously announced acquisition of CoreSite (thereby removing the “equity overhang”).
In addition, the company stepped back from a large potential deal in Europe, which would have required significant incremental funding, due to unfavorable contract terms and price. This decision further reinforced our confidence in management’s capital allocation discipline knowing that these were highly sought-after assets.”
4. Analog Devices, Inc. (NASDAQ:ADI)
Cantillon Capital Management’s Stake Value: $473,871,000
Percentage of Cantillon Capital Management’s 13F Portfolio: 3.95%
Number of Hedge Fund Holders: 61
Analog Devices, Inc. (NASDAQ:ADI) is a global high-performance semiconductor firm that designs, develops, manufactures, and sells integrated circuits (ICs). John Armitage’s Egerton Capital Limited is a significant stakeholder of Analog Devices, Inc. (NASDAQ:ADI), with 4.46 million shares worth over $650.84 million.
On October 3, Citi analyst Christopher Danely maintained a ‘Buy’ rating and a $195 price target on Analog Devices, Inc. (NASDAQ:ADI). According to Danely, Analog Devices, Inc. (NASDAQ:ADI) could succeed during the downturn owing to its high, consistent margins, awareness of and readiness for the slowdown, and end-market positioning.
Analog Devices, Inc. (NASDAQ:ADI) has recently experienced a decrease in hedge fund interest. The company was in 61 hedge fund portfolios at the end of the second quarter of 2022. There were 67 funds in our database with Analog Devices, Inc. (NASDAQ:ADI) positions at the end of the first quarter of 2022. Cantillon Capital Management owned more than 3.24 million shares in the firm valued at over $473.87 million, representing 3.95% of the portfolio of the hedge fund.
3. Broadcom Inc. (NASDAQ:AVGO)
Cantillon Capital Management’s Stake Value: $500,905,000
Percentage of Cantillon Capital Management’s 13F Portfolio: 4.18%
Number of Hedge Fund Holders: 66
Broadcom Inc. (NASDAQ:AVGO) is a significant semiconductor device designer, developer, and global supplier. Fisher Asset Management is the largest stakeholder of Broadcom Inc. (NASDAQ:AVGO), with 1.47 million shares worth about $716.29 million.
William Stein, a Truist analyst, reduced his price objective on Broadcom Inc. (NASDAQ:AVGO) from $658 to $630 on September 2 while retaining a ‘Buy’ recommendation. Stein stated that owing to the company’s 3.3% dividend yield, his prediction of a 20% dividend growth this year, and the benefits of M&A, investors should purchase shares of Broadcom Inc. (NASDAQ:AVGO).
In the second quarter of 2022, 66 hedge funds were long Broadcom Inc. (NASDAQ:AVGO), with a total stake value of $4.03 billion. Cantillon Capital Management reduced its stake in Broadcom Inc. (NASDAQ:AVGO) by 1% in the second quarter, ending the period with a position worth $500.91 million.
2. Alphabet Inc. (NASDAQ:GOOG)
Cantillon Capital Management’s Stake Value: $647,894,000
Percentage of Cantillon Capital Management’s 13F Portfolio: 5.4%
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG), the American technology conglomerate. announced the release of the Pixel 7 and Pixel 7 Pro on October 6 with significant camera upgrades. In addition, the new smartphones come with a number of significant improvements, including new Tensor G2 chips from Google and improved AI-powered apps like Google Assistant.
On October 4, BofA analyst Justin Post maintained a ‘Buy’ rating on Alphabet Inc. (NASDAQ:GOOG) while trimming his price objective to $114 from $125. Due to the anticipated top-down effects of a Western economic GDP slump as well as potential headwinds from TikTok commercialization, Amazon.com, Inc. (NASDAQ:AMZN)’s ad growth and new ad-supported streaming competitors, he has lowered his estimates for both Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:META).
Cantillon Capital Management held 297,300 shares of Alphabet Inc. (NASDAQ:GOOG) on June 30, amounting to a $647.89 million stake and representing 5.4% of the fund’s portfolio. 153 hedge funds from the second quarter database of Insider Monkey reported long bets on Alphabet Inc. (NASDAQ:GOOG), with combined stakes worth $22.30 billion. One of the firm’s notable shareholders is Chris Hohn’s TCI Fund Management, which recently increased its stake by 5%, equalling $5.42 billion.
In its Q2 2022 investor letter, Lakehouse Capital mentioned Alphabet Inc. (NASDAQ:GOOG). Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOG) reported another strong quarterly result despite the tough macroeconomic conditions. Revenue increased by 13% as Search proved resilient, primarily led by strength in the travel and retail verticals. YouTube advertising growth was lighter and moderated due to a tough comparison period and a general softening in brand advertising spend. That said, YouTube’s user engagement and time spent still continues to grow which bodes well for future monetisation opportunities. Google Cloud outpaced the company’s overall growth with revenue increasing by 36% and while it has yet to show any signs of profitability, we remain supportive of Alphabet continuing to reinvest in its cloud business given the size of the market opportunity ahead. On the cost front, the company added another 10,000 employees during the quarter, but notably, the CFO mentioned that hiring will likely slow down over the next twelve months as the company focuses on greater operating efficiency. Overall, we’re pleased with how the company has performed and are confident that management will be able to control costs, if or when the economic environment becomes more challenging.”
1. S&P Global Inc. (NYSE:SPGI)
Cantillon Capital Management’s Stake Value: $719,580,000
Percentage of Cantillon Capital Management’s 13F Portfolio: 6%
Number of Hedge Fund Holders: 84
S&P Global Inc. (NYSE:SPGI) provides credit ratings, benchmarking, statistics, and workflow solutions. On September 28, S&P Global (NYSE:SPGI) announced a quarterly dividend of $0.85 per share, in line with the previous. S&P Global Inc. (NYSE:SPGI) has increased its dividend every year for at least the last 49 years and has paid a dividend each year since 1937.
On August 29, Oppenheimer analyst Owen Lau retained an ‘Outperform’ rating on the stock while raising his price objective on S&P Global to $419 from $404. The analyst, who was becoming more positive about the firm, claimed that the shares of S&P Global had a solid start to Q3, rising 8.0% and beating the S&P 500 by 80 basis points.
In the second quarter of 2022, 84 hedge funds were bullish on S&P Global Inc. (NYSE:SPGI), down from 97 in the preceding quarter. Chris Hohn’s TCI Fund Management is a significant stakeholder of S&P Global Inc. (NYSE:SPGI), with 8.77 million shares worth over $2.96 billion.
In its Q2 2022 investor letter, Baron Funds mentioned S&P Global Inc. (NYSE:SPGI). Here is what the fund said:
“Another example is S&P Global (NYSE:SPGI), the leading rating agency and data provider, whose stock declined 29.0% year-to-date and 17.5% during the second quarter as a result of growing investor concerns over the slowdown in debt issuance. While debt issuance volumes have seen a dramatic decline – the worst quarterly decline in a decade (down 41% year-over-year in the second quarter based on Goldman Sachs estimates), – and this led management to withdraw its 2022 guidance in early June, we do not believe it would result in a permanent loss of capital.
First, ratings represent only about 30% of S&P Global’s total revenues. Second, despite inherent volatility in quarterly or annual issuance, over the long-term issuance volumes follow the trends in levels of debt outstanding, which has compounded in the mid-single digits for many years. Lastly, we believe that S&P Global’s strong competitive positioning will enable it to continue benefiting from pricing power, while taking advantage of secular tailwinds such as the growth in passive and ESG investing, international expansion, and the growing demand for data analytics.”
You can also take a peek at Top 9 Stock Picks of Eduardo Costa’s Calixto Global Investors and Top 10 Stock Picks of Roberto Mignone’s Bridger Management.
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