In this article, we discuss the 10 best large-cap stocks to buy according to Columbus Hill Capital Management. You can skip our detailed analysis of the hedge fund’s performance and go directly to read the 5 Best Large-Cap Stocks to Buy According to Columbus Hill Capital Management.
Columbus Hill Capital Management is a hedge fund based in New Jersey and was founded in 2006. Currently, Kevin Eng is serving as the Chief Investment Officer and Chief Operating Officer of the firm. His investment experience spans over 25 years as he worked with many firms before founding Columbus Hill Capital Management.
The hedge fund aims to generate risk-adjusted returns through all episodes of the market cycle, by investing in growth stocks with attractive valuations to achieve long-term gains. In times of financial volatility, the fund also seeks investment opportunities in distressed stocks using the experience of portfolio managers.
As of Q2, Columbus Hill’s 13F portfolio is diversified across six sectors: technology, finance, healthcare, services, industrial goods, and basic materials. The fund’s portfolio value stands at over $836.8 million, up 1.02% from the previous quarter. The major investments in the portfolio are in large-cap stocks. Some of the notable large-cap stocks in the fund’s 13F portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Sea Limited (NYSE:SE), Wells Fargo & Company (NYSE:WFC), and Uber Technologies, Inc. (NYSE:UBER).
Our Methodology:
Let’s analyze our list of the best large-cap stocks to buy according to Columbus Hill Capital Management. We used Columbus Hill’s 13F portfolio for Q2 2021 for this analysis.
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Best Large-Cap Stocks to Buy According to Columbus Hill Capital Management
10. JD.com, Inc. (NASDAQ:JD)
Columbus Hill Capital Management’s Stake Value: $16,324,000
Percent of Columbus Hill Capital Management’s 13F Portfolio: 1.95%
Number of Hedge Fund Holders: 76
JD.com, Inc. (NASDAQ:JD), a Chinese e-commerce company, reported solid Q2 results, posting an EPS of $0.45, beating the estimates by $0.11. The company’s revenue for the quarter stood at $39.3 billion, up 37.9% from the prior-year quarter.
In Q2, Capital Hill started building its position in JD.com, Inc. (NASDAQ:JD), with 204,541 shares, valued at over $16.3 million. The company accounts for 1.95% of the hedge fund’s 13F portfolio. Recently, Mizuho lifted its price target on JD.com, Inc. (NASDAQ:JD) to $95, with a Buy rating on the shares.
At the end of Q2, 76 hedge funds tracked by Insider Monkey reported owning stakes in JD.com, Inc. (NASDAQ:JD), up from 75 in the previous quarter. The total value of these stakes is over $10.6 billion.
Like Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Sea Limited (NYSE:SE), Wells Fargo & Company (NYSE:WFC), and Uber Technologies, Inc. (NYSE:UBER), JD.com, Inc. (NASDAQ:JD) is one of the notable stocks to invest in.
Arisaig Partners mentioned JD.com, Inc. (NASDAQ:JD) in its Q2 2021 investor letter. Here is what the firm has to say:
“JD.com, for example, continues to display impressive operating momentum, with sales on track to grow around 30% this year by our estimates. Looking longer term, this company is making a credible claim to be the dominant player in Chinese grocery ecommerce, an enormous chunk of overall consumption in China, and the last one yet to move online in a big way. We think that JD has a clear advantage over rivals here thanks to its integrated and fully self-managed logistics capabilities. Whereas an offline big box retailer might have 10-20,000 SKUs, JD offers 8 million. 90% of orders fulfilled by JD Logistics can be delivered on the same day or the next day to 500 million customers. The fact that JD has just 30 days of inventory tells us that this is a highly-optimised fulfilment chain. It is very hard to be both fast and efficient, and in order to achieve this it is necessary to know what inventory to hold in which warehouse, and when to hold it (“right place, right time, right person”), a highly information-intensive challenge. The only other retailer that comes close to being able to manage that level of complexity is Amazon, and indeed these are capabilities that are very hard to replicate, taking decades of painstaking investment, trial and error testing, and data accumulation.
Moreover, far from being some sort of ‘victim’, this company is most likely a beneficiary of tighter regulation in this sector. A recurrent message running through JD’s recent investor day was that of “deep purpose”, the objective being to create shared value for a broader ecosystem of customers, merchants and employees. As we describe in the next section on “Navigating China”, this form of alignment with the strategic objectives of the government is a very China-specific way of conceptualising ESG, and essential for all businesses that operate in this country to get right…” (Click here to see the full text)
9. Alphabet Inc. (NASDAQ:GOOG)
Columbus Hill Capital Management’s Stake Value: $1,831,000
Percent of Columbus Hill Capital Management’s 13F Portfolio: 0.21%
Number of Hedge Fund Holders: 155
In Q2 2021, Capital Hill owns 750 shares in Alphabet Inc. (NASDAQ:GOOG), valued at over $1.8 million. The company represents 0.21% of the hedge fund’s 13F portfolio.
Alphabet Inc. (NASDAQ:GOOG) announced its Q3 results on October 26, posting a GAAP EPS of $27.99, beating the estimates by $4.67. The company’s Google Services revenue stood at $59.8 billion, versus the estimates of $58.1 billion. In the past year, Alphabet Inc. (NASDAQ:GOOG) gained 67%.
Recently, Piper Sandler lifted its price target on Alphabet Inc. (NASDAQ:GOOG) to $3,150, while keeping an Overweight rating on the shares. The firm’s analyst highlighted the company’s strong Q3 results.
At the end of Q2, 155 hedge funds tracked by Insider Monkey reported owning stakes in Alphabet Inc. (NASDAQ:GOOG), compared with 159 in the previous quarter. The total value of these stakes is over $33.7 billion. Ivy Lane Capital was the largest shareholder of Alphabet Inc. (NASDAQ:GOOG) in Q2, owning shares worth $24.3 billion.
Alger mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter. Here is what the firm has to say:
“Alphabet Inc. was among the top contributors to performance during the third quarter. Alphabet is a leading internet search provider and is a beneficiary in the share shift of advertising dollars from traditional mediums like television, radio and newspapers to digital platforms. The company is a leader in implementing Al, autonomous vehicles and cloud computing it and owns the highly trafficked YouTube property. Alphabet contributed to performance due to a strong quarterly report highlighted by revenue growth that beat consensus expectations across segments. The company’s core search revenues have increased 10% over the past two years, with cloud computing increasing 8%. Results from YouTube also exceeded expectations. When discussing quarterly results, Alphabet management said retail, entertainment and travel were end markets that were particularly strong. The fixed cost structure of Alphabet’s search service resulted in profitability resulting from the increase in revenues being better than expected.”
8. Mastercard Incorporated (NYSE:MA)
Columbus Hill Capital Management’s Stake Value: $22,085,000
Percent of Columbus Hill Capital Management’s 13F Portfolio: 2.63%
Number of Hedge Fund Holders: 156
Mastercard Incorporated (NYSE:MA) is an American financial services company that also deals in digital payments across the globe. On September 20, the company announced a quarterly dividend of $0.44 per share, yielding 0.52%. Mastercard Incorporated (NYSE:MA) has a track record of seven years of consistent dividend growth.
Codex Capital is the largest shareholder of Mastercard Incorporated (NYSE:MA), with shares worth $8.4 billion. At the end of Q2, 156 hedge funds tracked by Insider Monkey were bullish on Mastercard Incorporated (NYSE:MA), compared with 151 in the previous quarter. The total value of these stakes is over $17.09 billion.
Polen Capital mentioned Mastercard Incorporated (NYSE:MA) in its Q3 2021 investor letter. Here is what the firm has to say:
“Mastercard faced pressure as some believe these “old payment infrastructure” businesses will be disrupted by newer fintech companies using blockchain, buy now, pay later (BNPL), or other innovations to provide better/cheaper payment services. However, we believe that some of these technologies have meaningful limitations which could benefit existing payment networks. For example, BNPL transactions are often funded with cards and turn a one-time transaction into many smaller ones with more transaction fees for Mastercard. Just like with regulation, we continually monitor for competition and technological disruption. As of now, we do not see a significant risk in the foreseeable future to this company.”
7. Microsoft Corporation (NASDAQ:MSFT)
Columbus Hill Capital Management’s Stake Value: $24,811,000
Percent of Columbus Hill Capital Management’s 13F Portfolio: 2.96%
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ:MSFT) announced its fiscal Q1 results on October 26 and posted an EPS of $2.27, beating the estimates by $0.19. The company’s revenue for the quarter stood at $45.3 billion, showcasing a 21.8% year-over-year growth.
As of Q2, Columbus Hill owns over 91,588 shares in Microsoft Corporation (NASDAQ:MSFT), worth over $24.8 million. The company represents 2.96% of the hedge fund’s 13F portfolio. Recently, JPMorgan lifted its price target on Microsoft Corporation (NASDAQ:MSFT) to $320, with an Overweight rating on the shares.
Of the 873 hedge funds tracked by Insider Monkey, 238 hedge funds reported owning stakes in Microsoft Corporation (NASDAQ:MSFT), compared with 251 in the previous quarter. The total value of these stakes is over $62.4 billion.
Like Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Sea Limited (NYSE:SE), Wells Fargo & Company (NYSE:WFC), and Uber Technologies, Inc. (NYSE:UBER), analysts and investors are also paying attention to Microsoft Corporation (NASDAQ:MSFT) in 2021.
Alger mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter. Here is what the firm has to say:
“Microsoft Corporation was among the top contributors to performance during the third quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 51% in the second quarter. This high unit volume growth is a primary driver of the company’s higher share price, but the company’s strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
6. UnitedHealth Group Incorporated (NYSE:UNH)
Columbus Hill Capital Management’s Stake Value: $26,288,000
Percent of Columbus Hill Capital Management’s 13F Portfolio: 3.14%
Number of Hedge Fund Holders: 105
UnitedHealth Group Incorporated (NYSE:UNH) presented a positive hedge fund sentiment in Q2, as 108 hedge funds tracked by Insider Monkey were bullish on UnitedHealth Group Incorporated (NYSE:UNH), up from 89 in the previous quarter. The total value of these stakes is over $13 billion. With a market cap of $432.3 billion, UnitedHealth Group Incorporated (NYSE:UNH) remains one of the best large-cap stocks to buy according to Columbus Hill Capital Management.
On October 14, UnitedHealth Group Incorporated (NYSE:UNH) reported its Q3 results, with an EPS of $4.52, beating the estimates by $0.10. Recently, Wells Fargo lifted its price target on UnitedHealth Group Incorporated (NYSE:UNH) to $520, with an Overweight rating on the shares. The firm’s analyst showed confidence in the company’s future earnings momentum.
In Q2, Columbus Hill increased its stake in UnitedHealth Group Incorporated (NYSE:UNH) by 7% and now owns 65,648 shares in the company, valued at $26.2 million. The company represents 3.14% of the hedge fund’s 13F portfolio.
Wedgewood Partners mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2021 investor letter. Here is what the firm has to say:
“UnitedHealth Group detracted from performance due to investor concerns about Medicare premiums as well as post-COVID medical cost trends. Medicare enrollment should continue to grow at double-digits at UnitedHealthcare. Meanwhile the Company’s Optum segment should be able to help bend the cost curve if indeed post-COVID volumes pick up to above pre-COVID levels. In any case, we do not think the long-term normalized trend of medical care in the U.S. has changed substantially and would look to add to our new position on any continuing short-term concerns.”
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Disclosure. None. 10 Best Large-Cap Stocks to Buy According to Columbus Hill Capital Management is originally published on Insider Monkey.
