In this article, we discuss 10 Blue Chip Stocks to Buy Now According to billionaire D. E. Shaw. You can skip our detailed analysis of D E Shaw’s strategy and the current market outlook and go directly to 5 Blue Chip Stocks to Buy Now According to Billionaire D. E. Shaw.
David E. Shaw is the founder of D. E. Shaw & Co, a quantitative hedge fund. In 1980, he received a bachelor’s degree from the University of California, San Diego, and a PhD from Stanford University. He was a professor at Columbia University until 1986, when he opted to pursue a career in computational finance.
Shaw subsequently joined Morgan Stanley, where he served as vice president of technology for two years until establishing his own business in 1988. He resigned from active management of the hedge fund in 2001, preferring to focus on his research in computational biochemistry. He is presently the head scientist at D.E. Shaw Research.
D. E. Shaw & Co. is based out of New York and is run by David Shaw. D. E. Shaw & Co. is a hedge fund with 34 clients and discretionary assets under management (AUM) of $128 billion. Their last reported 13F filing for Q2 2022 included $85 billion in managed 13F securities and a top 10 holdings concentration of 8.52%. D. E. Shaw & Co.’s largest holding is Amazon.com, Inc. (NASDAQ:AMZN), with 10,919,300 shares held. The fund is known for developing complicated mathematical models and sophisticated computer programs to exploit anomalies in the financial market. The staff at D. E. Shaw & Co. includes world-class mathematicians, physicists, computer scientists, economists, analysts, business-builders, and system architects relying on specialized trading, operational, and compliance expertise developed over 30 years.
Among its holdings, D. E. Shaw & Co owns many blue chip stocks. A blue-chip company is a large corporation with a stellar reputation. These are often large, well-established, and financially strong corporations that have been in operation for many years and have consistent earnings, often paying dividends to shareholders. Investors like blue chip stocks because of the companies’ history of weathering difficult times.
Given the present market volatility with the Federal Reserve increasing interest rates, stocks could continue to decline if economic data doesn’t meet expectations. Nevertheless, there could be an opportunity for long term investors who invest in quality blue chips given the low valuations.
David E. Shaw of D.E. Shaw
Methodology
For our list, we took 10 stocks from David E. Shaw’s D E Shaw 13F portfolio at the end of Q2 2022 that we think have the right mixture of industry leadership, strong fundamentals, and growth potential. We then ranked them from #10 to #1 based on the stake value of D E Shaw portfolio in those stocks in the second quarter. We also provided the number of hedge funds in our database that held shares in the stock at the end of Q2 2022.
10 Blue Chip Stocks to Buy Now According to Billionaire D. E. Shaw.
10. QUALCOMM, Inc. (NASDAQ:QCOM)
D E Shaw’s stake value: $355 million
Percentage of D E Shaw’s Portfolio: 0.41%
Number of Hedge Fund Holders: 71
QUALCOMM, Inc. (NASDAQ:QCOM) designs processors for cellphones and develops and licences wireless technologies. The company’s most important patents revolve around CDMA and OFDMA wireless communications protocols, which form the backbone of all 3G and 4G networks. The company is also a pioneer in 5G network technologies. Qualcomm’s IP is licenced by practically all wireless device manufacturers. The company is also the largest wireless chip supplier in the world, supplying practically every significant phone manufacturer with cutting-edge CPUs. During Q2 2022, D E Shaw decreased its stake in the company by 3%. The fund’s total stake in the company amounted to roughly $355 million, which represented 0.41% of its 13F portfolio.
Recently, QUALCOMM, Inc. (NASDAQ:QCOM) signed a pact with Meta Platforms, Inc. (NASDAQ:META) to produce custom chipsets for the social media giant’s Quest virtual reality devices. If Meta Platforms, Inc. (NASDAQ:META)’s metaverse is a success, there could be more demand for QUALCOMM, Inc. (NASDAQ:QCOM)’s chips.
At the end of Q2 2022, 71 hedge funds tracked by Insider Monkey owned stakes in QUALCOMM, Inc. (NASDAQ:QCOM). Alkeon Capital Management was the stock’s leading stakeholder in Q2, owning QUALCOMM, Inc. (NASDAQ:QCOM) shares worth over $541 million. The fund’s position in the stock increased by 4% from Q1 2022.
Alongside Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), QUALCOMM, Inc. (NASDAQ:QCOM) is one of the blue chips in billionaire D. E. Shaw’s D E Shaw’s 13F portfolio at the end of Q2 2022.
9. Walmart Inc (NYSE:WMT)
D E Shaw’s stake value: $363 million
Percentage of D E Shaw’s Portfolio: 0.42%
Number of Hedge Fund Holders: 67
Walmart Inc (NYSE:WMT), the largest retailer in the United States by revenue, operated over 10,500 locations under 46 banners by the end of the fiscal year 2022, selling a mix of general products and grocery items. The company’s domestic market accounted for 82% of revenues in fiscal 2022, with Mexico and Central America (6%) and Canada (4%) being its major overseas markets. In the United States, the food category accounts for around 56% of sales, general merchandise for 32%, and health and wellness products for 11%. In addition to its own website, the business controls Flipkart and shoes.com, among other e-commerce properties. During Q2 2022, D E Shaw decreased its stake in the company by 47%. The fund’s total stake in the company amounted to roughly $363 million, which represented 0.42% of its 13F portfolio.
Bradley Thomas, KeyBanc analyst, recently initiated coverage of Walmart Inc (NYSE:WMT) with an overweight rating and a price target of $155 on the stock. According to the analyst, his rating is supported by a favourable forecast for defensive growth, gains in market share and margin recovery to normalized levels. The analyst stated that Walmart Inc (NYSE:WMT) and Target Corporation (NYSE:TGT) outperformed in terms of earnings during the pandemic but are now “under-earning” as a result of “grossly inaccurate inventory positioning” and normalization of margins “bodes positively for patient investors,”.
At the end of Q2 2022, 67 hedge funds tracked by Insider Monkey owned stakes in Walmart Inc (NYSE:WMT). GQG Partners was the stock’s leading stakeholder in Q2, owning Walmart Inc (NYSE:WMT) shares worth over $1.1 billion. The fund’s position in the stock decreased by 37% from Q1 2022.
8. Colgate-Palmolive Company (NYSE:CL)
D E Shaw’s stake value: $481 million
Percentage of D E Shaw’s Portfolio: 0.56%
Number of Hedge Fund Holders: 55
Since its establishment in 1806, Colgate-Palmolive Company (NYSE:CL) has developed into a global leader in consumer products. In addition to its oral care line, the company manufactures shampoos, shower gels, deodorants, and home care products that are sold in over 200 countries (international sales account for approximately 70% of the company’s consolidated revenue). During Q2 2022, D E Shaw boosted its stake in the company by 134%. The fund’s total stake in the company amounted to roughly $481 million, which represented 0.56% of its 13F portfolio.
In its Q2 2022 investor letter, First Eagle Investments Global Fund mentioned Colgate-Palmolive Company (NYSE:CL) and explained its insights for the company. Here is what the fund said:
“Shares of consumer staples giant Colgate-Palmolive have performed well as investors rotated into more recessionary-resilient defensive stocks amid the broader selloff during the second quarter. The company raised revenue guidance for 2022 but lowered its margin outlook because of higher costs for raw materials, packaging and logistics; we believe that the company’s size and market share provide it with options to mitigate the inflation challenges it faces. We continue to like Colgate- Palmolive’s dividend and previously announced $5 billion stock buyback program.”
At the end of Q2 2022, 55 hedge funds tracked by Insider Monkey owned stakes in Colgate-Palmolive Company (NYSE:CL). First Eagle Investment Management was the stock’s leading stakeholder in Q2, owning Colgate-Palmolive Company (NYSE:CL) shares worth over $899 million. The fund’s position in the stock decreased by 1% from Q1 2022.
7. Bank of America Corp (NYSE:BAC)
D E Shaw’s stake value: $516 million
Percentage of D E Shaw’s Portfolio: 0.6%
Number of Hedge Fund Holders: 99
With over $2.5 trillion in assets, Bank of America Corp (NYSE:BAC) is one of the largest financial organizations in the United States. Consumer banking, global wealth and investment management, worldwide banking, and global markets are its four key segments. During Q2 2022, D E Shaw boosted its stake in the company by 196%. The fund’s total stake in the company amounted to roughly $516 million, which represented 0.6% of its 13F portfolio.
Recently, Matt O’Connor, an analyst at Deutsche Bank, decreased his price target on Bank of America Corp (NYSE:BAC) to $45 from $51 while keeping a buy rating on the stock. Many banking stocks are down about 25% or more since the January peaks and the market is pricing in a 55%-60% chance of a moderate to severe recession. The analyst commented:
“Assuming this, one could argue banks are in no man’s land in the near term. However, this also implies good upside longer term to the group if (a big IF) the US avoids a meaningful downturn”.
At the end of Q2 2022, 99 hedge funds tracked by Insider Monkey owned stakes in Bank of America Corp (NYSE:BAC). Berkshire Hathaway was the stock’s leading stakeholder in Q2, owning Bank of America Corp (NYSE:BAC) shares worth over $31 billion. The fund’s position in the stock remained unchanged from Q1 2022.
6. The Procter & Gamble Company (NYSE:PG)
D E Shaw’s stake value: $530 million
Percentage of D E Shaw’s Portfolio: 0.62%
Number of Hedge Fund Holders: 71
Since its establishment in 1837, The Procter & Gamble Company (NYSE:PG) has grown to become one of the world’s leading consumer goods makers, with annual revenues exceeding $80 billion. It operates with a portfolio of prominent brands, including more than 20 brands , with annual worldwide sales of more than $1 billion each. During Q2 2022, D E Shaw increased its stake in the company by 167%. The fund’s total stake in the company amounted to roughly $530 million, which represented 0.62% of its 13F portfolio.
Bill Chappell, analyst at Truist, reduced his price target on The Procter & Gamble Company (NYSE:PG) to $160 from $175 while maintaining a buy recommendation on the stock. He is a little apprehensive about the consumer environment after the company’s Q4 earnings miss, but he also maintains that the company’s premium-priced portfolio will triumph since the guide was more FX related and had some relative caution built in.
At the end of Q2 2022, 71 hedge funds tracked by Insider Monkey owned stakes in The Procter & Gamble Company (NYSE:PG). Bridgewater Associates was the stock’s leading stakeholder in Q2, owning The Procter & Gamble Company (NYSE:PG) shares worth over $970 million. The fund’s position in the stock decreased by 2% from Q1 2022.
Like The Procter & Gamble Company (NYSE:PG), Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) are blue chip stocks that billionaire D. E. Shaw’s D E Shaw owns at the end of Q2 2022.
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Disclosure: None. 10 Blue Chip Stocks to Buy Now According to Billionaire D. E. Shaw is originally published on Insider Monkey.
