In this article, we discuss the 10 best stocks to buy according to billionaire Brian Higgins. If you want to skip our detailed analysis of Higgins’ history and hedge fund performance, go directly to the 5 Best Stocks to Buy According to Billionaire Brian Higgins.
Brian Higgins founded King Street Capital Management in 1995 with O. Francis Biondi. The fund deals in distressed debts, equity, bonds, warrants, and foreign exchange. The hedge fund is well known for its deals in public equity and fixed income market. Among the funds that King Street manages are:
- Flagship Funds
- European Funds
- Global Drawdown Funds
- Rockford Tower
- Tactical Credit Opportunity and
- Real Estate Fund
Brian Higgins’ net worth is approximately $1.8 billion.
While most hedge funds reported negative returns in 2008, King Street posted a 2.5% return during the period. In 2020 the hedge fund gained 51.48% returns compared to 18.25% return posted by SPDR S&P 500 ETF Trust (NYSE: SPY). While it gained about 7.87% in the first quarter of 2021 compared to 5.17% return posted by S&P 500.
Among the notable holdings of Higgins as of the first quarter of 2021 include T-Mobile Us Inc (NASDAQ: TMUS), Wells Fargo & Company (NYSE: WFC), QUALCOMM Incorporated (NASDAQ: QCOM) and Booking Holdings Inc. (NASDAQ: BKNG).
King Street increased its holding in Wells Fargo & Company (NYSE: WFC) by 67% in the first quarter. On June 4, BofA Securities analyst Erika Najarian upgraded Wells Fargo & Company (NYSE: WFC) from “Neutral” to “Buy” with a price target of $60.00.
QUALCOMM Incorporated (NASDAQ: QCOM), in which Brian Higgins has a $46.41 million stake, is also gaining a lot of attention of investors. On June 10, market research firm Trend Force declared that Qualcomm (NASDAQ: QCOM) topped the list of 10 IC design (fabless) companies in the first quarter in terms of revenue. Qualcomm’s first quarter of revenue was up 62.2% YoY to $8.24 billion. On April 28, QUALCOMM Incorporated (NASDAQ: QCOM) declared its second quarter 2021 revenue of $7.94 billion, up 52% YoY, beating the estimates by $320 million.
Booking Holdings Inc. (NASDAQ: BKNG), in which the fund owns 28,900 shares, is in the limelight as investors pile into stocks to gain from the economic recovery. On May 20, Bank of America initiated coverage on Booking Holdings Inc. (NASDAQ: BKNG), rating the stock as “Buy.” On May 5, the company declared its first quarter 2021 earnings per share of -$5.26 beating the market estimates by $0.80. Booking Holdings Inc. (NASDAQ: BKNG) ranks 18th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Before investing, you should practice caution and do a lot of research, as financial volatility is making things difficult even for the smart investors. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, 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 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
New York Stock Exchange
Image: flickr.com
With this context and industry outlook in mind, let’s start our list of the 10 best stocks to buy according to billionaire Brian Higgins. We used Higgins’ hedge fund’s Q1 portfolio for this analysis.
Best Stocks to Buy According to Billionaire Brian Higgins
10. GoodRx Holdings, Inc. (NASDAQ: GDRX)
Higgins’ Stake Value: $19,510,000
Percentage of Brian Higgins’ 13F Portfolio: 1.45%
Number of Hedge Fund Holders: 24
GoodRx Holdings, Inc. (NASDAQ: GDRX) is an American health protection company that functions as an e-health platform. It was incorporated in 2015 and is placed tenth on our list of 10 best stocks to buy according to billionaire Brian Higgins.
Just like T-Mobile Us Inc (NASDAQ: TMUS), Wells Fargo & Company (NYSE: WFC), QUALCOMM Incorporated (NASDAQ: QCOM), and Booking Holdings Inc. (NASDAQ: BKNG), GoodRx Holdings, Inc. (NASDAQ: GDRX) is one of the best stocks to buy according to Brian Higgins. On May 13, Vericast Corp. sold its pharmaceutical company RxSaver to GoodRx Holdings for $50 million. RxSaver enables comparisons of prescription drug prices among drugstores. In May 28, Baird rated the stock as “Neutral,” with a price target of $37.00.
The stock accounts for about 1.45% of King Street Capital’s portfolio, as the hedge fund owns a $19.51 million stake in the company. Out of the hedge funds being tracked by Insider Monkey, Silver Lake Partners is a leading shareholder in GoodRx Holdings, Inc. (NASDAQ:GDRX), with 3.03 million shares worth more than $118.24 million.
Baron Funds, in their fourth quarter 2020 investor letter, mentioned GoodRx Holdings, Inc. Here is what the fund said:
“GoodRx Holdings, Inc. operates the nation’s largest online platform providing users free access to drug pricing information and pharmacy discounts. After a well-received IPO, the shares fell on Amazon.com, Inc.’s announcement that it has entered the online pharmacy space. Although Amazon is a formidable rival, we believe its success is not assured, as its participation is limited to the low-penetration mail order segment of the market. GoodRx has the advantages of the leading brand in its space, best pricing, a tie-in with its telehealth unit, and nascent opportunities in referrals from drug manufacturers.”
9. Cheniere Energy, Inc. (NYSE: LNG)
Higgins’ Stake Value: $43,203,000
Percentage of Brian Higgins’ 13F Portfolio: 3.23%
Number of Hedge Fund Holders: 40
Cheniere Energy, Inc. (NYSE: LNG) is a liquefied natural gas company located in the United States. Cheniere Energy, Inc. (NYSE: LNG) was incorporated in 1983 and is ranked ninth on our list of 10 best stocks to buy according to billionaire Brian Higgins. Cheniere Energy currently has a $21.11 billion market capitalization and was able to deliver a 70.25% return in the past 12 months.
On May 4, the company declared a first quarter 2021 revenue of $3.09 billion, beating the market estimates by $210 million. Cheniere Energy, Inc. (NYSE: LNG) stock touched its 52 weeks high of $80.76 after its Q1 revenue jumped 14% YoY. The EPS was $1.54 for the first quarter up from $1.43 a year ago.
On January 11, Raymond James analyst Justin Jenkins upgraded Cheniere Energy, Inc. (NYSE: LNG) from “Outperform” to “Strong Buy,” with a price target of $80.00. On June 22, Citi rated the stock as “Buy,” raising the price target to $130 from $95.
The stock is a new arrival on Brian Higgins’ portfolio, as his hedge fund bought about 599,964 shares of the company, worth $43.20 million. In the first quarter of 2021, 40 hedge funds in Insider Monkey’s database of 887 funds held stakes in Cheniere Energy, Inc. (NYSE: LNG), compared to 38 funds in the fourth quarter of 2020. Icahn Capital LP is the largest stock holding of Cheniere Energy, accounting for 4.88% of the overall portfolio holding 16.17 million shares.
8. Carvana Co. (NYSE: CVNA)
Higgins’ Stake Value: $1,863,000
Percentage of Brian Higgins’ 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 64
Carvana Co. (NYSE: CVNA) functions as an electronic commerce platform for buying and selling second-hand cars in the United States. The company was founded in 2012 and is placed eighth on our list of 10 best stocks to buy according to billionaire Brian Higgins. Carvana stock has offered investors returns of 133.37% over the course of the past 12 months.
Just like T-Mobile Us Inc (NASDAQ: TMUS), Cheniere Energy, Inc. (NYSE: LNG), Wells Fargo & Company (NYSE: WFC), QUALCOMM Incorporated (NASDAQ: QCOM), and Booking Holdings Inc. (NASDAQ: BKNG), Carvana Co. (NYSE: CVNA) is one of the best stocks to buy according to Brian Higgins. On May 26, RBC Capital analyst Brad Erickson initiated a coverage on the stock, rating it as “Outperform” with a price target of $300.00. On May 6, Carvana Co. announced its first quarter 2021 revenue of $2.25 billion, up 104.5% YoY, beating the market estimates by $300 million. Gross profit jumped 15% YoY to $338 million in first quarter of 2021.
Billionaire Brian Higgins initiated a new stake in Carvana Co. (NYSE: CVNA) in the first quarter of 2021, buying 7,100 shares of the company, worth $1.86 million. In the first quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $7.54 billion in Carvana Co. (NYSE: CVNA), up from 63 the preceding quarter worth $7.07 billion.
In its the first quarter of 2021 investor letter, Steel City Capital, an investment management firm, highlighted a few stocks, and Carvana Co. was one of them. Here is what the fund said:
“Carvana’s (CVNA) 4Q’20 results weren’t particularly great. EBITDA was negative ($70) million, a stark turnaround on a sequential basis from a first-ever EBITDA profit of $21 million in 3Q’20. The culprit was a steep drop off in retail unit GPU ($1,265 vs. $1,857) and wholesale unit GPU ($358 vs. $1,113) as some of the COVID-driven aberrations in the used car market began to abate.
The company’s presentation of EBITDA (calculated “bottom up”) is dubious, as it commingles non-operating items including mark-to-market changes in its retained securitization portfolio. With the exception of 1Q’20, when ABS markets were going haywire, this line item provided a tailwind throughout 2020, including a gain of $5 million in 4Q’20. Also on the non-operating self-help front, management released a reserve for vehicle service contract cancellations in 4Q’20, adding another $7 million to EBITDA, and boosting “Other” GPU by $96.” (Click here to read full text)
7. The TJX Companies, Inc. (NYSE: TJX)
Higgins’ Stake Value: $4,571,000
Percentage of Brian Higgins’ 13F Portfolio: 0.34%
Number of Hedge Fund Holders: 63
The TJX Companies, Inc. (NYSE: TJX) is an American international company, which functions as a retail-family clothing store. The company was founded in 1956, and stands seventh on our list of 10 best stocks to buy according to billionaire Brian Higgins. TJX shares have gained about 20.38% in value over the last 12 months.
On May 27, The TJX Companies, Inc. (NYSE: TJX) declared a quarterly dividend of $0.26 per share in line with the previous. Earlier on May 19, the company announced its first quarter 2021 earnings per share of $0.44, beating the market predictions by $0.13. The company also declared revenue of $10.09 billion, up 128.8% YoY, beating the estimates by $1.48 billion. On April 23, RBC Capital initiated coverage on TJX with an “Outperform” rating and a $78.00 price target.
The TJX Companies is a new addition in Brian Higgins hedge fund’s portfolio, as King Street Capital bought 69,100 shares of the company, worth $4.57 million. A total of 63 hedge funds tracked by Insider Monkey were bullish on The TJX Companies, Inc. (NYSE: TJX) in the first quarter of 2021, down from 68 funds a quarter earlier.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned The TJX Companies, Inc. Here is what ClearBridge Investments has to say about The TJX Companies, Inc. in its letter:
“New positions that should thrive in a reopening of the economy and a financially healthy consumer eager to spend include: TJX, an off-brand retailer with a strong presence in the U.S. and Europe that should continue to benefit from the demise of traditional retailers, particularly as consumer spending resumes.”
6. 8×8, Inc. (NYSE: EGHT)
Higgins’ Stake Value: $63,747,000
Percentage of Brian Higgins’ 13F Portfolio: 4.76%
Number of Hedge Fund Holders: 24
8×8, Inc. (NYSE: EGHT) is an American provider of IP telephony. 8×8, Inc. was incorporated in 1987 and ranks sixth on our list of 10 best stocks to buy according to billionaire Brian Higgins. 8×8 stock has returned 76.81% to investors over the last 12 months.
On May 26, 8×8, Inc. (NYSE: EGHT) announced a collaboration with Sandler Partners. The partnership allows Sandler Partners to provide 8×8 XCaaS to more than 9,000 technology partners. On May 10, 8X8 declared its FY 2021 where earnings per share of -$1.57 compared to -$1.72 a year ago. The company also declared its revenue of $532.34 million, up from $446.24 million in FY 2020. On June 8,the communications firm 8×8 gained 4.2% after hours, after CEO David Sipes bought 43,000 shares at $23.47, worth over $1 million of company stock.
Brian Higgins’ King Street Capital currently holds 1.97 million shares of 8×8 Inc. that amounts to $63.75 million. Higgins upped his stake in the company by 185% in the last quarter and it now occupies 4.76% of his total portfolio. In the first quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $1.01 billion in8x8, Inc. (NYSE: EGHT), down from 26 the preceding quarter worth $1.20 billion.
Just like T-Mobile Us Inc (NASDAQ: TMUS), Cheniere Energy, Inc. (NYSE: LNG), Wells Fargo & Company (NYSE: WFC), QUALCOMM Incorporated (NASDAQ: QCOM), and Booking Holdings Inc. (NASDAQ: BKNG), 8×8, Inc. (NYSE: EGHT) is one of the best stocks to buy according to Brian Higgins.
Click to continue reading and see 5 Best Stocks to Buy According to Billionaire Brian Higgins.
Suggested articles:
- Billionaire Lee Cooperman’s Top 10 Stocks
- Billionaire Izzy Englander’s Top 10 Stock Picks
- Billionaire David Abrams’ Top Stock Picks
Disclosure: None. 10 Best Stocks to Buy According to Billionaire Brian Higgins is originally published on Insider Monkey.
