In this article, we will discuss the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital.
Renowned billionaire hedge fund manager, philanthropist, and environmentalist Thomas Steyer is the founder and former senior managing partner of the California-based global institutional asset management firm Farallon Capital Management. After earning his B.A. in Economics and Political Science from Yale University, Steyer began his career at Morgan Stanley. In 1979, he continued his education, earning his M.B.A from the Stanford Graduate School of Business. He later joined The Goldman Sachs Group where he served as an associate in the risk arbitrage division till 1985. A year later, he founded his own hedge fund in San Francisco.
According to the most recent 13F Filings, Farallon Capital Management manages more than $22.48 billion in its investment portfolio. The fund invests heavily in the Healthcare sector, which makes up over 36.5% of the investment fund’s portfolio. A majority of the companies present in the fund’s portfolio are large-cap stocks.
Some of the top stocks present in the investment portfolio of Farallon Capital Management at the end of the second quarter of 2021 include Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), T-Mobile Us, Inc. (NASDAQ:TMUS) and Willis Towers Watson Public Limited Company (NASDAQ:WLTW), among other discussed in detail below.
Our Methodology
With this background in mind, let us now look towards the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital. We made use of Farallon Capital Management’s 13F portfolio for the second quarter for this analysis.
Why should we pay attention to hedge fund activity? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Top 10 Stocks To Buy According To Thomas Steyer’s Farallon Capital
10. Aramark (NYSE:ARMK)
Farallon Capital’s Stake Value: $454.8 million
Percentage of Farallon Capital’s 13F Portfolio: 2.02%
Number of Hedge Fund Holders: 36
Aramark (NYSE:ARMK) is a Pennsylvania-based company that operates as food services, facilities, and uniform service provider. The company serves clients in various industries, including education and healthcare. Aramark (NYSE:ARMK) ranks tenth on our list of the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital.
On September 2, RBC Capital analyst Ashish Sabadra assumed coverage of Aramark (NYSE:ARMK) with a Sector Perform rating and $38 price target.
Of the 873 elite funds tracked by Insider Monkey, 36 were long in Aramark (NYSE:ARMK) at the end of June, compared to 39 in the first quarter of 2021. Thomas Steyer’s Farallon Capital Management holds over 12.2 million shares of Aramark (NYSE:ARMK), amounting to over $454.8 million and representing 2.02% of the fund’s portfolio value.
9. Slack Technologies, Inc. (NYSE:WORK)
Farallon Capital’s Stake Value: $462.4 million
Percentage of Farallon Capital’s 13F Portfolio: 2.05%
Number of Hedge Fund Holders: 61
Slack Technologies, Inc. (NYSE:WORK) is a California-based software development company that provides a communications platform for its clients worldwide. It ranks ninth on the list of top 10 stocks to buy according to Thomas Steyer’s Farallon Capital.
According to the latest filings, Farallon Capital Management owns 10.4 million shares of Slack Technologies, Inc. (NYSE:WORK) in the second quarter of 2021, worth $462.3 million. There were 61 hedge funds in our database that held stakes in Slack Technologies, Inc. (NYSE:WORK) in the second quarter, compared to 60 funds in the previous quarter.
8. Microsoft Corporation (NASDAQ:MSFT)
Farallon Capital’s Stake Value: $464 million
Percentage of Farallon Capital’s 13F Portfolio: 2.06%
Number of Hedge Fund Holders: 238
On September 17, Tigress Financial analyst Ivan Feinseth raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $366 from $303, and kept a Buy rating on the shares.
As of Q2 2021, Thomas Steyer’s hedge fund held over 1.7 million shares of the tech giant. These shares were valued at $464 million and represented 2.06% of his hedge fund’s portfolio value. By the end of the second quarter of 2021, 238 hedge funds out of the 873 tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), worth roughly $62.46 billion, compared to 251 hedge funds in the previous quarter, with stakes worth approximately $58.9 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
7. T-Mobile US, Inc. (NASDAQ:TMUS)
Farallon Capital’s Stake Value: $499.4 million
Percentage of Farallon Capital’s 13F Portfolio: 2.22%
Number of Hedge Fund Holders: 100
T-Mobile US, Inc. (NASDAQ:TMUS) is ranked seventh on our list of top 10 stock to buy according to Thomas Steyer’s Farallon Capital. The firm provides communication services and is headquartered in Washington. According to the latest filings, Farallon Capital Management owned 3.4 million shares in the company at the end of the second quarter of 2021 worth $499.4 million, representing 2.22% of the portfolio.
At the end of the second quarter of 2021, 100 hedge funds in the database of Insider Monkey held stakes worth $8.02 billion in T-Mobile US, Inc. (NASDAQ:TMUS), up from 98 the preceding quarter worth $9.06 billion.
On September 20, investment advisory Loop Capital initiated coverage of T-Mobile US, Inc. (NASDAQ:TMUS) stock with a Buy rating and a price target of $160.
ClearBridge Investments, an investment management firm, in its first-quarter 2021 investor letter mentioned T-Mobile US, Inc. (NASDAQ:TMUS). Here is what the firm 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 communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”
6. Alphabet Inc. (NASDAQ:GOOG)
Farallon Capital’s Stake Value: $533.6 million
Percentage of Farallon Capital’s 13F Portfolio: 2.37%
Number of Hedge Fund Holders: 155
As of the end of the June quarter, 155 hedge funds out of the 873 tracked by Insider Monkey held stakes in Alphabet Inc. (NASDAQ:GOOG). Thomas Steyer’s Farallon Capital Management currently holds 212,917 shares in the company, worth more than $533.6 million, accounting for 2.37% of the fund’s total investment portfolio.
On October 12, JPMorgan analyst Doug Anmuth maintained an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) with a $3,250 price target, noting that the company was the most liked mega-cap internet stock.
In its Q2 2021 investor letter, Mawer Investment Management named Alphabet Inc. (NASDAQ:GOOG) among the companies that reported strong results. Here is what the fund said:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Alphabet. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
5. Boston Scientific Corporation (NYSE:BSX)
Farallon Capital’s Stake Value: $543.7 million
Percentage of Farallon Capital’s 13F Portfolio: 2.41%
Number of Hedge Fund Holders: 51
Boston Scientific Corporation (NYSE:BSX) is a Massachusetts-based manufacturing company that designs, produces and sells devices for the medical industry.
On October 6, Piper Sandler analyst Matt O’Brien maintained an Overweight rating on Boston Scientific Corporation (NYSE:BSX) with a $175 price target on its shares.
By the end of the second quarter of this year, Thomas Steyer’s Farallon Capital held 12.7 million shares of Boston Scientific Corporation (NYSE:BSX) with the stake equaling $543.7 million and representing 2.41% of the investment firm’s portfolio. Of the 873 elite funds tracked by Insider Monkey, 51 held stakes in the company in the second quarter of 2021, up from 44 hedge funds in the preceding quarter.
Artisan Partners, in its second-quarter investor letter mentioned Boston Scientific Corporation (NYSE:BSX). Here is what the fund said:
“Among our top contributors (includes) Boston Scientific. Shares of Boston Scientific were volatile throughout most of 2020 as the pandemic drove significant drops in elective medical procedures, though our longer-term constructive view and belief elective medical procedures would bounce back post pandemic prompted us to add to our position. We have been rewarded with shares rebounding this year alongside a recovery in elective medical procedures. Longer-term, we believe the company’s investments in higher growth categories will drive revenue growth to the higher end of its peer group with rising margins.”
4. Aon Plc (NYSE:AON)
Farallon Capital’s Stake Value: $630.95 million
Percentage of Farallon Capital’s 13F Portfolio: 2.8%
Number of Hedge Fund Holders: 68
Aon Plc (NYSE:AON) operates as a global professional services firm which provides a range of financial risk-mitigation and insurance products.
After the second quarter of 2021, Thomas Steyer’s hedge fund owns 2.64 million shares worth $630.9 million in Aon Plc (NYSE:AON), representing 2.8% of the fund’s overall holdings value.
On September 2, MKM Partners analyst Harry Fong raised the price target on Aon Plc (NYSE:AON) to $350 from $300, and kept a Buy rating on the shares of the company.
As of Q2 2021, 68 hedge funds out of 873 tracked by Insider Monkey held stakes in Aon Plc (NYSE: AON) worth $8.12 billion, in comparison to $7.76 billion worth of stakes in the company held by 72 hedge funds in the previous quarter.
Polen Capital, an investment management firm, published its insights on Aon Plc (NYSE: AON) in its investor letter for Q2 2021. Here’s what they had to say:
“In the case of Aon, we purchased a small initial position in June. Within days of our initial purchase, the U.S. Department of Justice challenged Aon’s pending merger with Willis Towers Watson, and the stock fell as a result. Outside this event, Aon’s business continues to be well-positioned and operating exceptionally well, in our opinion. We detail our investment case for the business in the Portfolio Activity section. Importantly, while we remain confident that Aon can find a path forward with the U.S. Department of Justice, the consummation of the merger is not required for our investment case.”
3. Thermo Fisher Scientific Inc. (NYSE:TMO)
Farallon Capital’s Stake Value: $678 million
Percentage of Farallon Capital’s 13F Portfolio: 3.01%
Number of Hedge Fund Holders: 87
Thermo Fisher Scientific Inc. (NYSE:TMO) ranks third on the list of the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital. The Massachusetts-based company is a provider of scientific instruments, reagents and consumables, and software services.
As of the end of the second quarter, 87 hedge funds tracked by Insider Monkey reported owning stakes in Thermo Fisher Scientific Inc. (NYSE:TMO). The total worth of these stakes is $7.39 billion.
On September 23, Goldman Sachs analyst Matthew Sykes upgraded Thermo Fisher Scientific Inc. (NYSE:TMO) stock to Conviction Buy from Buy, raising the price target to $690 from $600.
In its Q2 2021 investor letter, ClearBridge Investments mentioned Thermo Fisher Scientific Inc. (NYSE:TMO). Here is what they said:
“Two additional names in the health care sector in the quarter, partially funded with a sale, made strong contributions and helped push our relative exposure to the sector from underweight to overweight. We added Thermo Fisher Scientific to increase our exposure to health care tools, which has been an attractive and core segment within health care. Thermo Fisher’s instruments are used to monitor and protect air, water, and food quality, and the company has strong long-term fundamentals, a top-tier management team and a diversified business.”
2. IQVIA Holdings Inc. (NYSE:IQV)
Farallon Capital’s Stake Value: $694.7 million
Percentage of Farallon Capital’s 13F Portfolio: 3.08%
Number of Hedge Fund Holders: 69
IQVIA Holdings Inc. (NYSE:IQV) is a multinational company based in North Carolina that specializes in health information technology and clinical research.
On September 10, Argus analyst Jasper Hellweg raised his price target on IQVIA Holdings Inc. (NYSE:IQV) to $290 from $260 and maintained a “Buy” rating on the shares.
According to the recent 13F Filings, Farallon Capital Management holds over 2.86 million shares in IQVIA Holdings Inc. (NYSE:IQV), worth $694.6 million. This represents 3.08% of the fund’s portfolio value. Of the 873 hedge funds tracked by Insider Monkey, 69 held stakes in Holdings Inc. (NYSE:IQV) in the second quarter of 2021, up from 62 funds a quarter earlier.
1. Willis Towers Watson Public Limited Company (NASDAQ:WLTW)
Farallon Capital’s Stake Value: $799.2 million
Percentage of Farallon Capital’s 13F Portfolio: 3.55%
Number of Hedge Fund Holders: 70
Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is a leading British multinational risk management, insurance brokerage and advisory company.
As of Q2 2021 Thomas Steyer’s Farallon Capital Management holds over 3.47 million shares of Willis Towers Watson Public Limited Company (NASDAQ:WLTW), amounting to more than $799.2 million in worth and representing 3.55% of the fund’s portfolio.
On September 10, MKM Partners analyst Harry Fong raised his price target on Willis Towers Watson Public Limited Company (NASDAQ:WLTW) to $285 from $250, and kept a Buy rating on the shares of the company.
You can also take a peek at 10 Best Safe Dividend Stocks According to Billionaire Dan Loeb and 10 Best Robinhood Stocks Under $20.
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Disclosure: None. Top 10 Stocks To Buy According To Thomas Steyer’s Farallon Capital is originally published on Insider Monkey.
