In this article, we talk about the 10 best stocks to buy now according to billionaire Steve Cohen. If you wish to skip our detailed analysis of Cohen’s hedge fund history and investment strategy, go directly to 5 Best Stocks To Buy Now According To Billionaire Steve Cohen.
Steve Cohen is the man behind Point72 Asset Management, a Connecticut-based hedge fund with $25.18 billion of assets under management (AUM) as of March 2022. Worth nearly $12 billion, Cohen made most of his wealth as the founder and boss of now-closed SAC Capital, which averaged annual returns of 25% from 1993 to 2013. Prior to founding SAC Capital with $25 million of his own money in 1993, Cohen worked as a trader for boutique investment bank Gruntal & Co., where his stock market exploits earned him a glaring reputation and significant wealth. He would go on to head a trading group at the firm, manage a $75 million portfolio, and make his company around $100,000 a day.
Steve Cohen is the majority stakeholder of the New York Mets baseball team, and boasts one of the largest private art collections in the world, valued at roughly $1 billion. The New York resident attended University of Pennsylvania’s Wharton School of Business, graduating with a degree in Economics in 1978.
Cohen’s investing genius and wealth story has inspired the lead character of hit TV show Billions named Bobby Axelrod, a hot-shot money-manager stuck in a vicious legal battle with a ruthless and hardworking district attorney. This runs as a parallel to Cohen’s altercations with the SEC, where he eventually settled on a deal which saw him escape prosecution and earn a two-year ban from managing investors’ money.
In 2021, Steve Cohen invested $750 million into Gabe Plotkin’s Melvin Capital, after it lost nearly $7 billion during a tense stand-off with retail investors amid the GameStop short-squeeze frenzy. Plotkin was an employee of Cohen’s at SAC Capital, and the former had earned the latter’s praise on many occasions. In March, Bloomberg reported that Cohen was redeeming the $750 million it had invested to save Melvin Capital from bankruptcy.
As of the first quarter of 2022, Point72 Asset Management owned positions in leading stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Merck & Co., Inc. (NYSE:MRK) and Visa Inc. (NYSE:V), among others. The hedge fund initiated 440 new positions, made additional purchases in 301 stocks, sold out of 360 and reduced holdings in 321 stocks. The fund’s portfolio consists of stocks primarily from the Healthcare, Financials, Services, Technology, Basic Materials, and Others sectors. The top 10 holdings accounted for 11.42% of the overall portfolio.
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Best Stocks To Buy Now According To Billionaire Steve Cohen
10. Seagen Inc. (NASDAQ:SGEN)
Point72 Asset Management’s Stake Value: $200.69 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 49
Seagen Inc. (NASDAQ:SGEN) is an American biotechnology company which specializes in antibody-based drug therapies for the treatment of cancer. Among the hedge funds tracked by Insider Monkey at the end of March, 49 reported ownership of positions in SGEN with combined stakes worth $8.36 billion. This shows a positive trend from the previous quarter where 46 hedge funds were stakeholders in the company.
On July 5, Seagen Inc. (NASDAQ:SGEN) reported that its Tukysa (tucatinib) drug combo for metastatic colorectal cancer showed meaningful anti-tumor activity during a mid-stage trial. As of July 6, the company shares have recorded a 16.96% surge in the last 12 months, and 21.85% in the last 6 months.
At the end of June, Raymond James analyst Dane Leone initiated coverage of Seagen Inc. (NASDAQ:SGEN) with an ‘Outperform’ rating and a $220 price target, noting that the company could be a “high-interest candidate” for acquisition by a number of large biopharmaceutical firms, with Merck (NYSE:MRK) as a viable bidder. He cited the company’s growing commercial portfolio, general increased interest in the antibody drug conjugates (ADC) modality, and “significant optionality” of label expansion for its key programs.
Along with big-names such as Amazon.com, Inc. (NASDAQ:AMZN), Merck & Co., Inc. (NYSE:MRK) and Visa Inc. (NYSE:V), Seagen Inc. (NASDAQ:SGEN) is an exciting stock in billionaire Steve Cohen’s 2022 portfolio.
9. S&P Global Inc. (NYSE:SPGI)
Point72 Asset Management’s Stake Value: $201.44 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 97
S&P Global Inc. (NYSE:SPGI) is a credit ratings agency headquartered in New York. It recently declared a $0.85 per share quarterly dividend, with a yield of 0.97% as of July 6.
On June 3, Barclays analyst Manav Patnaik lowered the firm’s price target on S&P Global Inc. (NYSE:SPGI) to $385 from $450 and maintained an ‘Overweight’ rating on the company shares. The company suspended its FY22 guidance due to the broader market volatility and a weakness in global issuance, and the analyst has cut price targets for both S&P Global and peer Moody’s. However, Deutsche Bank analyst Faiza Alwy sees this period as “transitory and a unique buying opportunity” for long-term investors, and maintained a ‘Buy’ rating on S&P Global Inc. (NYSE:SPGI) shares with a $418 price target, down from $483.
Out of all the hedge funds tracked by Insider Monkey, 97 held stakes in S&P Global Inc. (NYSE:SPGI) at the end of the first quarter, showing vastly improving investor confidence over the previous quarter where 79 hedge funds were long on the company shares. TCI Fund Management held a massive $2.79 billion stake in S&P Global Inc. (NYSE:SPGI) at the end of Q1 2022, making it the firm’s largest shareholder.
Cooper Investors, an investment management firm, had this to say about S&P Global Inc. (NYSE:SPGI) in its Q1 2022 investor letter:
“This quarter, S&P Global announced the successful completion of its acquisition of IHS Markit. The deal makes S&P a global leader across the information services industry. The Fund has been long term shareholders of S&P, building a position back in 2015 when the organisation was still named McGraw-Hill Financial. We saw the initial opportunity as it refocused the business from a publishing and financial conglomerate towards its core data and financial assets. S&P’s credit ratings, benchmarks and analytics businesses in global capital and commodity markets carry leading positions, defensible offerings, consistent growth and high margins – as true today as it was seven years ago. With the increased focus management have applied over a lengthy period we see improved revenue growth, margins and cash flows…” (Click here to see the full text)
8. Visa Inc. (NYSE:V)
Point72 Asset Management’s Stake Value: $205.59 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.81%
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is a digital payments technology company. It was given an unchanged ‘Neutral’ rating by Mizuho analyst Dan Dolev on July 1, who noted that payment vendors such as Visa and Mastercard are “yet to meaningfully correct” after travel-related stocks and online visits to travel sites, both of which serve as benchmarks for booking strength, have weakened.
Point72 Asset Management owned 927,000 shares of Visa Inc. (NYSE:V) during the first quarter worth $205.6 million, representing a massive 296% hike from the quarter before where the fund owned 234,000 shares of the company
Overall, the company remained a popular stock among hedge funds, with a total of 159 bullish hedge fund bets reported at the end of the first quarter, up from 142 hedge funds in the preceding quarter. Chris Hohn’s TCI Fund Management was the top Q1 shareholder of Visa Inc. (NYSE:V) with a huge $4.41 billion stake. Fisher Asset Management and Berkshire Hathaway also held multi-billion dollar stakes in the firm.
In its Q1 2022 investor letter, investment firm Polen Capital talked about the market position and prospects of Visa Inc. (NYSE:V). Here is what was said:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
7. Arista Networks, Inc. (NYSE:ANET)
Point72 Asset Management’s Stake Value: $230.39 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.91%
Number of Hedge Fund Holders: 41
Arista Networks, Inc. (NYSE:ANET) is a California-based company which provides cloud networking solutions around the world. Steve Cohen’s portfolio for the first quarter contained 1.65 million ANET shares, priced at roughly $230 million and representing 0.91% of his overall holdings.
On May 3, Cowen analyst Paul Silverstein raised the firm’s price target on Arista Networks, Inc. (NYSE:ANET) to $154 from $151 and reiterated an ‘Outperform’ rating on the shares. The analyst noted that revenue and demand is tracking quite ahead of expectations even within an adverse supply chain environment, and earnings would be even higher if not for the cost impact of supply chain constraints.
Evercore ISI analyst Amit Daryanani also gave Arista Networks, Inc. (NYSE:ANET) an ‘Outperform’ rating, along with a $160 target and removed his ‘Tactical Outperform’ call on the shares. Daryanani sees ANET as well-positioned to sustain more than 30% growth in revenue on a multiyear basis, and notes that the company is better shielded from supply chain issues in comparison to peers.
41 hedge funds were long Arista Networks, Inc. (NYSE:ANET) at the end of the first quarter, up from 38 hedge funds a quarter earlier. The firm’s largest shareholder was Whale Rock Capital Management, which initiated a $317 million position in the company during the first quarter
Here is what Artisan Partners had to say about Arista Networks, Inc. (NYSE:ANET) in its Q4 2021 investor letter:
“Arista Networks is the market leader for cloud networking equipment used in data centers for public, private and hybrid cloud deployments. The company’s top line growth has recently been bolstered by 400G deployments—the next generation of tech powering data centers—and further enterprise network penetration as customers migrate away from Cisco (~80% market share vs. ~5% for Arista). While the profit cycle is nicely in motion, we pared our exposure as shares began to approach our PMV estimate.”
6. Analog Devices, Inc. (NASDAQ:ADI)
Point72 Asset Management’s Stake Value: $235.72 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.93%
Number of Hedge Fund Holders: 67
Analog Devices, Inc. (NASDAQ:ADI) is a Massachusetts-based semiconductor firm which serves clients in the industries of computers, consumer electronics, communications, military, aerospace, and automotive.
On June 5, Citi analyst Christopher Danely named Analog Devices, Inc. (NASDAQ:ADI) as his top semiconductor pick given the firm’s “defensive nature.” He expects downside to semiconductor consensus estimates for the remainder of 2022 due to lower PC and handset demand, as well as a slowing economy and buildup of inventory.
BofA analyst Vivek Arya was also bullish on Analog Devices, Inc. (NASDAQ:ADI) within the semi space, and gave the stock a ‘Buy’ rating, whilst lowering the price target to $190 from $220. The analyst sees chip demand taking a hit well into 2023 due to consumer weakness, geopolitical tensions and a tighter monetary policy around the globe. However, he notes that unit weakness “could be cushioned by richer non-consumer mix, robust pricing, expanding content, and constrained supply.”
As of the end of the first quarter of 2022, 67 hedge funds held stakes in Analog Devices, Inc. (NASDAQ:ADI) with a collective price tag of $4.81 billion. This is down from 72 hedge funds in the previous quarter with $4.71 billion worth of positions in the company. With a nearly $616 million stake, Egerton Capital Limited was the largest shareholder of Analog Devices, Inc. (NASDAQ:ADI) in the first quarter of 2022.
Madison Funds, an investment management firm, talked about the market position and prospects of Analog Devices, Inc. (NASDAQ:ADI) in its Q3 2021 investor letter. Here is what they said:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Merck & Co., Inc. (NYSE:MRK) and Visa Inc. (NYSE:V), Analog Devices, Inc. (NASDAQ:ADI) is on the radar of investors in 2022.
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