In this article, we will be discussing the 10 best stocks to buy according to billionaire Paul Tudor Jones. To skip our detailed analysis of Jones’s hedge fund returns, investment philosophy, and history, you can click to skip ahead to the 5 Best Stocks to Buy According to Billionaire Paul Tudor Jones.
Paul Tudor Jones, American billionaire, hedge fund manager, and philanthropist, is the founder of Tudor Investment Corporation, an asset management firm based in Stamford, Connecticut. He is also the founder of the Robin Hood Foundation, which works to reduce poverty. One of Jones’s most renowned successes includes his predictions of the 1987 Black Monday, which allowed him to triple his money through short bets.
Jones his investment career as a trader at E. F. Hutton & Co in 1976. In 1980 he went solo and founded Tudor Investment Corporation, eventually growing it to over $7.0 billion in assets. Tudor Investment Corporation focuses on global macro trading, fundamental equity investing in the US and Europe, emerging markets, venture capital, commodities, and technical trading systems, among other things. The Tudor Group’s investment strategies include discretionary global macro, quantitative global macro, and growth equity, among others. The fund has been largely successful since its inception. In 1987, Tudor Investment returned 125.9% by betting on the US stock market crash and earned around $100 million. In 1990, the firm returned 87.4% by shorting the Japanese equities market. Yet, the fund’s days of high returns came to a standstill in the 2000s when between 2010 – 2012, it only returned 5% annually. 2013 onwards, Tudor Investment’s returns started rising again, with 14.3% in returns that year, and by 2018, Tudor Investment’s Tudor Momentum Fund brought in 24.15%.
Paul Tudor Jones
Jones positions himself as a conservative investor, but has recently mentioned that he is also betting on Bitcoin since last year. In a recent interview on CNBC, the investor expressed concerns that the Fed was not addressing the rising consumer prices and said he would go “all-in” on the inflation trade (a strategy that involves profiting from inflation or expected inflation) if the Fed did not change its policy at the following meeting (it didn’t). He also added that he is certain that his portfolio should consist of ” 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities”.
We follow Paul Tudor Jones and Tudor Investment as part of our hedge fund strategy. Through extensive research, we have been able to identify a select group of companies that hedge funds have been betting on that has outperformed SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by more than 124 percentage points. We have been sharing these picks in our monthly newsletters and they have returned 206.8% between March 2017 and May 2021, vs 91% for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) (see the details here).
As part of our strategy, we’re looking into Tudor Investment Corp’s quarterly 13F filings to see which companies represent Jones’ top bets and what changes he’s been making to his holdings. During the first quarter of 2021, Jones has strengthened his position in ETFs, but also pharmaceuticals. For example, from his top 10 holdings, which we’re going to discuss in this article, three are represented by new positions, two of which are ETFs, Materials Select Sector SPDR Fund (NYSEARCA:XLB) and VanEck Vectors Semiconductor ETF (NASDAQ:SMH).
Moreover, Materials Select Sector SPDR Fund (NYSE:XLB) represents Tudor Investment’s second-largest position, preceded by SPDR S&P 500 ETF Trust (NYSEARCA:SPY). During the first quarter, the fund acquired a $167 million position in Materials Select Sector SPDR Fund (NYSE:XLB), although it significantly lower compared to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which was more than quadrupled to $310 million.
Without further ado, let’s take a closer look at 10 best stocks to buy, according to billionaire Paul Tudor Jones.
10. iShares Semiconductor ETF (NASDAQ:SOXX)
Value: $42.96 million
Shares: 101,337
Percentage of 13F Portfolio: 0.86%
Our list of best stocks to buy according to billionaire Paul Tudor Jones starts with an Exchange-Traded Fund. In iShares Semiconductor ETF (NASDAQ:SOXX), Tudor Investment trimmed its stake by 12% on the quarter to 101,337 shares.
iShares Semiconductor ETF (NASDAQ:SOXX) offers investors exposure to a basked of (mostly) US-based semiconductor manufacturers, with NVIDIA Corporation (NASDAQ:NVDA), Broadcom Inc (NASDAQ:AVGO), and Intel Corporation (NASDAQ:INTC) occupying the top three spots in its portfolio. As the semiconductor industry has been on the rise, iShares Semiconductor ETF (NASDAQ:SOXX) has rewarded its investors handsomely by more than quadrupling in value over the last five years. Jones has been holding iShares Semiconductor ETF (NASDAQ:SOXX) since the first quarter of 2021 and has seen the stock gain roughly 50%, although as sales of semiconductors continue to growth, the ETF is likely to continue its climb.
9. Xilinx, Inc. (NASDAQ:XLNX)
Value: $47.46 million
Shares: 383,070
Percentage of 13F Portfolio: 0.95%
Xilinx, Inc. (NASDAQ:XLNX) is a developer of programmable devices and associated technology across the globe. The company provides integrated circuits and programmable logic devices among other products and ranks 9th on our list of the best stocks to buy according to billionaire Paul Tudor Jones.
This June, Xilinx, Inc. (NASDAQ:XLNX) acquired Silexica, bringing in the company’s C/C++ programming and analysis tools and SLX FPGA tool suite to be integrated with the Xilinx Vitis unified software platform for the benefit of software developers using Xilinx, Inc. (NASDAQ:XLNX) technology.
In the fiscal fourth quarter of 2021, Xilinx, Inc. (NASDAQ:XLNX) recorded an EPS of $0.82, beating estimates by $0.03. The company’s revenue amounted to $850.99 million, up by 12.56% year-over-year and topping estimates by $37.96 million.
By the end of the first quarter of 2021, 57 hedge funds out of the 866 tracked by Insider Monkey held stakes in Xilinx, Inc. (NASDAQ: XLNX) worth roughly $3.58 billion in aggregate, lower than 66 hedge funds with $3.83 billion worth of stock a quarter earlier.
8. Zoom Video Communications, Inc. (NASDAQ:ZM)
Value: $49.08 million
Shares: 152,766
Percentage of 13F Portfolio: 0.98%
Zoom Video Communications, Inc. (NASDAQ:ZOOM) is a provider of a video-first communications platform in the US and internationally. The company’s platform schedules Zoom Meetings with HD video, voice, chat, and other features. It ranks 8th on our list of the best stocks to buy according to billionaire Paul Tudor Jones.
In June, Needham initiated coverage of Zoom Video Communications, Inc. (NASDAQ:ZOOM) with a Hold rating, while RBC Capital set an Outperform rating and a $450 price target on the stock.
For the first quarter of fiscal 2022, Zoom Video Communcations, Inc. (NASDAQ:ZOOM) reported an EPS of $1.32, versus estimates of $0.98, while its revenue surged by 191.39% on the year to $956.24 million, topping expectations by $48.06 million.
By the end of the first quarter of 2021, 54 hedge funds followed by Insider Monkey held stakes in Zoom Video Communications, Inc. (NASDAQ:ZOOM) with a total value of $5.67 billion. This is compared to 59 hedge funds and $6.0 billion, respectively, a quarter earlier.
Artisan Partners, a high value-added investment management firm, mentioned Zoom Video Communications, Inc. (NASDAQ: ZM) in its first-quarter 2021 investor letter:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
7. C3Ai Inc (NYSE:AI)
Value: $49.43 million
Shares: 750,000
Percentage of 13F Portfolio: 1.07%
Next in the list of best stocks to buy according to billionaire Paul Tudor Jones is C3Ai Inc (NYSE:AI). The investor first disclosed ownership in the company in its fourth-quarter 13F filing, around the time the company went public. The Artificial Intelligence software company went public at the beginning of December, pricing its IPO at $42 per share. The stock opened its first trading day at $100, which was more than 130% above the IPO Price. it continued to climb in the following days, reaching a peak value of more than $177. However, since February, the stock has been losing ground and is currently 44% in the red since it began trading.
It’s not completely clear why C3Ai Inc (NYSE:AI) has been losing ground, as the company reported better-than-expected financial results and even inked a partnership with Royal Dutch Shell plc ADR Class A (NYSE:RDS.A), Baker Hughes Co (NYSE:BKR), and Microsoft Corporation (NASDAQ:MSFT) to launch an open ecosystem of AI-based solutions for the energy industry. However, its likely that despite the solid prospects, C3Ai Inc (NYSE:AI) was quite expensive and many concerns remain such as the quite narrow customer base. C3Ai Inc (NYSE:AI) provides an enterprise AI platform that allows building and scaling various applications. As AI continues to grow, C3Ai Inc (NYSE:AI) stands to benefit, but investors were probably not comfortable with post-IPO valuation and took it down a notch.
6. VanEck Vectors Semiconductor ETF (NASDAQ:SMH)
Value: $53.36 million
Shares: 219,102
Percentage of 13F Portfolio: 1.07%
VanEck Vectors Semiconductor ETF (NASDAQ:SMH) is an exchange-traded fund that provides its investors exposure to the semiconductor industry in the US. The fund ranks 6th on our list of the best stocks to buy according to Paul Tudor Jones. The investor added VanEck Vectors Semiconductor ETF (NASDAQ:SMH) to its equity portfolio during the first quarter of 2021, joining funds like Israel Englander’s Millennium Management, Ken Griffin Citadel Advisors and others.
VanEck Vectors Semiconductor ETF (NASDAQ:SMH) has appreciated by 14.48% year to date. Some of the fund’s major holdings include NVIDIA Corporation (NASDAQ:NVDA) (8.62%), Intel Corporation (NASDAQ:INTC) (5.39%), and Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) (14.69%). It has $5.43 billion in assets under management, and its total returns in the past year were 69.24%, versus the S&P 500’s 10.4%.
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Disclosure: None. 10 Best Stocks to Buy According to Billionaire Paul Tudor Jones is originally published on Insider Monkey.
