In this article, we will discuss the 10 best stocks to buy now according to Michael Platt’s BlueCrest Capital. You can skip our detailed analysis of Platt’s history, his investment strategy and his hedge-fund performance, and go directly to 5 Best Stocks to Buy Now According to Michael Platt’s BlueCrest Capital.
Michael Edward Platt graduated from the London School of Economics. With a current net worth of almost $13 billion, he is the wealthiest hedge-fund manager of Britain, according to Bloomberg Billionaires Index. He currently serves as the managing partner of Europe’s third largest hedge-fund firm, BlueCrest Capital Management, which he co-founded with American financier, William Reeves.
According to latest reports by Bloomberg, BlueCrest Capital’s primary focus in the fiscal year of 2022 is increased investments in the commodities sector. The fund is on a hiring spree for traders who “can cash in on a blistering rally in commodities”. Commodities from crude oil to copper and aluminum are at multi-year highs due to supply chain issues brought about by the Russia-Ukraine crisis. The global transition from fossil fuels to clean energy is also credited with boosting the demand for metals, making trading in the commodities market much more lucrative and profitable. It is for these reasons that BlueCrest is trying to emulate the success of multi-strategy firms like Millennium Management and Citadel, and increase its stakes in the commodities sector by hiring traders who specialize in this arena. In fact, according to another article by Bloomberg, Platt is offering a 30% share in profits – an incredibly lucrative offer as compared to average market allocations which range from 8% to 20% – to incentivize multi-strategy hedge-fund managers into employment.
Michael Platt’s Investment Strategy
Platt owes his success to a vital decision he made in 2015. The hedge-fund billionaire decided to return about $7 billion in clients’ money in order to dedicate his focus on trading for himself and his partners. Beyond its use of highly leveraged bets to juice returns, little is known about BlueCrest Capital’s trading strategy since then.
Platt is a huge advocate of risk management, which he deems vital to short-term trading. He is a strong advocate of aggressive stop losses, where he will drastically cut trader allocations if they concede even 3% of their capital, but will also reward winning trades with increased allocations. He believes strict stop losses limit one’s downside, and are essential when using leverage. Platt also argues that incurring too many losses can make traders “gun-shy”, which leads them to lose out on opportunities. As markets have immense short-term momentum, selling losers and building winners can be a good way to boost returns.
His investment strategy outlines how Platt splits BlueCrest’s assets between systematic strategies, which heavily rely on pattern-spotting computer algorithms that consequently lead to trend-following strategies, and discretionary trades, which are largely human-driven. Simply put, Platt purchases assets which are on the rise, and sells them off when they are falling. He has also claimed that though he retains overall control of the firm, day-to-day management is delegated to his traders. Moreover, in his first televised interview given to Bloomberg TV in 2011, Platt has said that he remains weary of exposure to banks, peripheral debt risk and illiquid investments, trying to avoid them as best he can.
Hedge-Fund Performance and Projections
Since Platt’s ground-breaking 2015 decision of closing BlueCrest down for third-party investors, the firm’s annual returns have skyrocketed. The investment firm started making aggressive bets on riskier equities and consequently posted annual returns of 50%, 54%, 25%, 50%, 95% in 2016, 2017, 2018, 2019, and 2020, respectively.
In 2021, Platt broke records by returning more than a 30%.
As of the first quarter of 2022, BlueCrest Capital’s investment portfolio remains highly diversified, with Platt making significant investments in the utilities, technology, services, consumer goods, industrial goods and healthcare sectors among others, bringing his portfolio to be valued at around $3.1 billion, a result of a 0.99% increase with respect to the previous quarter. The firm’s bets on interest rates and commodities increased significantly over the first few weeks of 2022, which it continued to hold after cutting risk amid extreme volatility sparked by Russia’s invasion of Ukraine. All in all, BlueCrest Capital Management looks set for a stellar 2022 with some of the most prominent stocks in their portfolio including Tesla Inc. (NASDAQ:TSLA), Dominion Energy Inc. (NYSE:D), and McAfee Corp. (NASDAQ:MCFE).
Michael Platt of BlueCrest Capital Mgmt.
Our Methodology
The companies listed below have been chosen from BlueCrest Capital Management’s 13F investment portfolio from Q1 2022. They have been ranked based on the stakes BlueCrest holds in each stock.
Data from 900+ elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each firm.
10. Change Healthcare Inc (NASDAQ:CHNG)
BlueCrest Capital Management’s Stake Value: $16.6M
Percentage of BlueCrest Capital’s 13F Portfolio: 0.54%
Number of Hedge Fund Holdings: 50
Based in Nashville, Tennessee, Change Healthcare (NASDAQ:CHNG) is a provider of revenue and payment cycle management, connecting payers, providers and patients in the US healthcare system. Founded in 2005, the company operates the biggest financial and administrative information exchange in the US, raking in a revenue of $3.5 billion in the first quarter of 2022.
According to their 13F portfolio for Q1 2022, BlueCrest Capital owns 234,463 shares in Change Healthcare (NASDAQ:CHNG), which are worth more than $16.6 million. This marks Platt increasing his hold over the stock by 166%, with the healthcare company making up for 0.54% of Platt’s investment portfolio.
According to Insider Monkey’s Q1 2022 data, investor interest in Change Healthcare (NASDAQ:CHNG) seems to be on the rise, with 50 hedge-funds long the company this quarter, compared to 48 in Q4 2021. With over 16 million shares worth at around $370 million, Abrams Capital Management is the largest stakeholder in Change Healthcare (NASDAQ:CHNG).
On June 6, Citi analyst Daniel Grosslight raised his price objective on Change Healthcare Inc. (NASDAQ:CHNG) from $25.75 to $27.75, and maintained his ‘Buy’ rating on the stock.
Hence, by cementing its place among stocks like Tesla, Inc. (NASDAQ:TSLA), Dominion Energy Inc. (NYSE:D), and McAfee Corp. (NASDAQ:MCFE), Change Healthcare (NASDAQ:CHNG) makes its place on the list of the 10 best stocks to buy according to Platt’s BlueCrest Capital.
9. Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM)
BlueCrest Capital Management’s Stake Value: $19.2M
Percentage of BlueCrest Capital’s 13F Portfolio:0.62 %
Number of Hedge Fund Holdings: 81
Headquartered in Hsinchu Science Park, Taiwan, Taiwan Semiconductor Mfg. (NYSE:TSM) is a Taiwanese multinational, specializing in semiconductor manufacturing and design. Founded in 1987, it is one of the world’s largest dedicated, independent, semiconductor foundries, and one of the largest companies in Taiwan. BlueCrest Capital, in the first quarter of 2022, bought a significant stake of more than $19.2 million in Taiwan Semiconductor Mfg. (NYSE:TSM). The company contributes 0.62% of BlueCrest’s 13F investment portfolio.
On June 21, Loop Capital analyst Charles Park initiated coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock with a ‘Buy’ rating and a price target of NT$600, citing the firm a global leader in the foundry business. Investor interest in the stock is also on the rise with 81 hedge funds long Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) this quarter, as compared to 72 in the preceding quarter.
Baron Funds, an asset management firm, mentioned Taiwan Semiconductor Mfg. (NYSE:TSM) in their investor letter for Q1 2022, a copy of which can be obtained here. This is what they had to say:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) detracted in the first quarter due to rising geopolitical tensions, macroeconomic uncertainties, and concerns over softening demand for consumer electronics. We retain conviction that Taiwan Semi’s (NYSE:TSM) technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver above its 15% to 20% revenue growth target over the next several years.”
8. Essential Utilities Inc. (NYSE:WTRG)
BlueCrest Capital Management’s Stake Value: $19.8M
Percentage of BlueCrest Capital’s 13F Portfolio: 0.64%
Number of Hedge Fund Holdings: 22
With a history dating back to 1886, Essential Utilities Inc. (NYSE:WTRG) is a utility company which specializes in the provision of drinking water and wastewater treatment infrastructure and services. According to the company website, Essential Utilities Inc. (NYSE:WTRG) has stakes in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana and Virginia. As of Q1 2022, Impax Asset Management is the largest shareholder in the stock, owning over 5 million shares which are worth more than $256.9 million.
Platt’s BlueCrest Capital has been bullish on Essential Utilities Inc. (NYSE:WTRG) for a long time, with a total stake of $19.8 million in the stock as of Q1 2022, as opposed to the previous quarter, when the hedge-fund held a stake of $10.7 million only. Platt has strengthened his hold over the stock by 96% this quarter, with Essential Utilities Inc. (NYSE:WTRG) contributing 0.64% of BlueCrest’s 13F investment portfolio.
7. PG&E Corp. (NYSE:PCG)
BlueCrest Capital Management’s Stake Value: $29.2M
Percentage of BlueCrest Capital’s 13F Portfolio: 0.95%
Number of Hedge Fund Holdings: 51
Headquartered in San Francisco, California, PG&E Corp. (NYSE:PCG) is an American investor-owned utility company with a publicly traded stock. The company specializes in the provision of natural gas and electricity to over 5.2 million households in northern California, from Bakersfield and northern Santa Barbara County, almost to the Oregon and Nevada state lines. As of the latest quarter, Dan Loeb’s Third Point is the largest stakeholder in the stock with a stake value of $827 million. Meanwhile, Michael Platt’s BlueCrest Capital has strengthened its hold on the stock by 92% this quarter, buying 260,022 shares valued at over $29.2 million. PG&E Corp. (NYSE:PCG) contributes 0.95% to Platt’s 13F portfolio.
On April 12, Mizuho analyst Paul Fremont elevated the price target on PG&E Corp.(NYSE:PCG) to $18 from $16, and maintained a ‘Buy’ rating on the shares, after the company announced a settlement agreement in the Kincade and Dixie fires. In its 2022 guidance, PG&E Corporation (NYSE:PCG) expects GAAP earnings ranging between $0.89 to $1.23 and non-GAAP core earnings per share of $1.07 to $1.13, versus consensus of $1.12.
Third Point Management, an investment management firm, expressed their confidence in PG&E Corp. (NYSE:PCG) in their Q1 2022 investor letter. This is what they said:
“We continue to see immense value and potential in our position in Pacific Gas & Electric (NYSE:PCG), which emerged from bankruptcy just two years ago. PG&E’s (NYSE:PCG) new CEO, Patti Poppe, has transformed the organization, creating a new leadership and safety culture around a talented, committed, and dynamic executive team that is rethinking the way the Company addresses the energy needs of Northern Californians. California is at the forefront of the new energy transition with aggressive renewable procurement goals and high electric vehicle adoption, yet the state faces escalating climate change risks due to extreme drought conditions and wildfires. These conditions present unique challenges to utilities operating in the state. Patti and her team have brought new and creative solutions to these challenges with her focus on a lean operating system and an ambitious undergrounding plan.
In April, PG&E Corporation (NYSE:PCG) reported a straightforward and uneventful set of a results, delivering on its promises to customers and investors. As investors, we celebrate that simplicity. At current prices, the Company trades at under 12x 2022 consensus earnings compared to the utility index average of 21x and below its closest California peer, Edison International, at 15x. While there is an overhang from shares to be monetized by the PG&E Fire Victim Trust, PG&E (NYSE:PCG) will benefit from the reinstatement of a cash dividend in 2023 and if, as hoped, it is included in the S&P 500 index. Over the next year, we think PG&E (NYSE:PCG) will continue to re-rate towards industry averages while also growing earnings at an industry-leading 10% per year. In this type of market environment, the financial equation of consistent earnings growth and multiple re-rating makes for a wonderfully boring story and a solid anchor for our portfolio as Third Point’s largest position.”
It is for these reasons that Platt includes PG&E Corp. (NYSE:PCG) in his 13F investment portfolio alongside heavyweights like Tesla, Inc. (NASDAQ:TSLA), Dominion Energy Inc. (NYSE:D), and McAfee Corp. (NASDAQ:MCFE).
6. NiSource Inc. (NYSE:NI)
BlueCrest Capital Management’s Stake Value: $31.1M
Percentage of BlueCrest Capital’s 13F Portfolio: 1.01%
Number of Hedge Fund Holdings: 28
Based in Merryville, Indiana, NiSource Inc. (NYSE:NI) is one of the biggest fully-regulated utility companies in the US, distributing natural gas to 3.5 million customers, and electricity to 500,000, across six states. Founded in 1912, NiSource Inc. (NYSE:NI) largely operates through its local subsidiaries, Columbia Gas and NIPSCO. As of the first quarter of 2022, Millennium Management is the largest shareholder in the stock, owning more than 5.3 million shares valued at more than $171.5 million.
Platt first purchased a stake in the company in the fourth quarter of 2013. Steadily adding to the position until late 2015, he sold this stake completely in the second quarter of 2016, before opening a new position in the third quarter. This stake was sold off too. In 2018, he bought some shares of NiSource Inc. (NYSE:NI) before selling them off again. BlueCrest Capital has bought new stakes in the company in Q1 2022, buying 261,760 shares which are are worth more than $31.1 million in value. This constitutes NiSource Inc. (NYSE:NI) contributing 1.01% to BlueCrest Capital’s investment portfolio.
Investor interest in NiSource Inc. (NYSE:NI) has also been seen to pick up recently, with 28 holdings making bullish advances towards the stock in 2022, as compared to 26 just a quarter ago. These factors have aided NiSource Inc. (NYSE:NI) in making it to the list of 10 best stocks to buy now according to Platt’s BlueCrest Capital, alongside prominent stocks like Tesla, Inc. (NASDAQ:TSLA), Dominion Energy Inc. (NYSE:D), and McAfee Corp. (NASDAQ:MCFE).
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Disclosure: None. 10 Best Stocks to Buy Now According to Michael Platt’s BlueCrest Capital. is originally published on Insider Monkey.
