In this article, we discuss the 10 European stocks to buy according to Tom Russo’s hedge fund. If you want to skip our detailed analysis of Russo’s history, investment philosophy, and hedge fund performance, go directly to the 5 European Stocks to Buy According to Tom Russo’s Hedge Fund.
Tom Russo started his career at Gardner Russo & Gardner LLC in 1989 as a partner, and in 2014, he became the managing member of the hedge fund. He is also the partner and manager at Semper Vic Partners, which is a private hedge fund owned by Garner Russo & Gardner LLC, where he manages a portfolio with a gross asset value over $2.3 billion.
Russo’s hedge fund manages $11.8 billion in 13F securities as of the second quarter. His investment philosophy stresses upon return on capital, and he generally prefers equity investments. Russo looks for businesses that have good cash flows, strong balance sheets, and a demonstrated history of generating high rates of returns on fixed and current assets. He hunts for companies with his preferred financial statistics at bargain prices.
Russo’s investment portfolio reflects a limited number of industries which have historically presented a stable and strong free cash flow. This is a measure taken to limit risk by Russo, and he diversifies his investment portfolio by buying stakes in small-cap companies and investing in his typical choice of industries in foreign markets. His investment philosophy aims for absolute returns rather than relative returns. Russo also manages separate accounts for individuals, trusts, and endowments in addition to his clients at Gardner Russo & Gardner LLC and Semper Vic Partners.
The top ten holdings comprise 75.58% of Russo’s portfolio with investments concentrated in finance, consumer staples, consumer discretionary, and communications sectors.
He is a graduate from Dartmouth College and completed his Master’s degree from Stanford Business and Law Schools. Russo is a member of the Dean’s Advisory Council for Stanford Law School, Dartmouth College’s President’s Leadership Council, and California Bar Association. Russo is also a charter member of the Advisory Board for the Heilbrunn Center for Graham & Dodd Investing at Columbia Business School. In addition to that, he serves on the boards of the Winston Churchill Foundation of the U.S., Facing History and Ourselves, and Storm King Art Center.
The largest holding in Russo’s portfolio is Berkshire Hathaway Inc. (NYSE:BRK-B). The American conglomerate holding company makes up 11.12% of Russo’s 13F portfolio.
Some of the notable stocks in Russo’s Q2 2021 portfolio include Exxon Mobil Corporation (NYSE:XOM), Alphabet Inc. (NASDAQ:GOOG), and Berkshire Hathaway Inc. (NYSE:BRK-B), among others.
Photo by Nicholas Cappello on Unsplash
Why should we pay attention to Russo’s stock picks? 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 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Our Methodology
With this context in mind, here are the 10 European stocks to buy according to Tom Russo’s hedge fund. We used Gardner Russo & Gardner’s 13F portfolio for the second quarter of 2021 for this analysis.
European Stocks to Buy According to Tom Russo’s Hedge Fund
10. L’Oréal S.A. (OTC:LRLCY)
Russo’s Stake Value: $3,129,000
Percentage of Russo’s 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 2
The tenth stock on our list of the 10 European stocks to buy according to Tom Russo’s hedge fund is L’Oréal S.A. (OTC:LRLCY), which is a French cosmetics mega company headquartered in Clichy, France, serving customers worldwide.
Russo’s hedge fund owns 7020 shares in L’Oréal S.A. (OTC:LRLCY), amounting to $3.12 million, and making up 0.02% of Russo’s 13F portfolio.
Out of the hedge funds tracked by Insider Monkey, Washington-based Fisher Asset Management is the leading shareholder in L’Oréal S.A. (OTC:LRLCY) with 14.1 million shares worth over $1.26 billion.
Like Exxon Mobil Corporation (NYSE:XOM), Alphabet Inc. (NASDAQ:GOOG), and Berkshire Hathaway Inc. (NYSE:BRK-B), L’Oréal S.A. (OTC:LRLCY) is a notable stock in Russo’s Q2 portfolio.
9. Carlsberg A/S (OTC:CABGY)
Russo’s Stake Value: $4,156,000
Percentage of Russo’s 13F Portfolio: 0.03%
Number of Hedge Fund Holders: N/A
The ninth stock on our list of the 10 European stocks to buy according to Tom Russo’s hedge fund is Carlsberg A/S (OTC:CABGY), which is a multinational brewery headquartered in Copenhagen, Denmark. Founded in 1847, the company serves its beverages globally, with some of its signature brands being Carlsberg, Tuborg, Neptun, the Russian bestseller Baltika, Belgian Grimbergen, amongst more than 500 other local beer brands. Carlsberg A/S (OTC:CABGY) has a market cap of $23.74 billion.
Russo’s hedge fund owns 22,291 shares in Carlsberg A/S (OTC:CABGY), amounting to $4.15 million, and making up 0.03% of Russo’s 13F portfolio.
On August 19, Barclays reiterated an Overweight rating on Carlsberg A/S (OTC:CABGY), however, the stock was downgraded on September 29 by Deutsche Bank Aktiengesellschaft, who changed their rating from Buy to Hold on Carlsberg A/S (OTC:CABGY).
Like Exxon Mobil Corporation (NYSE:XOM), Alphabet Inc. (NASDAQ:GOOG), and Berkshire Hathaway Inc. (NYSE:BRK-B), Carlsberg A/S (OTC:CABGY) is a notable stock in Russo’s Q2 portfolio.
8. Swedish Match AB (publ) (OTC:SWMAY)
Russo’s Stake Value: $11,592,000
Percentage of Russo’s 13F Portfolio: 0.09%
Number of Hedge Fund Holders: N/A
The eighth stock on our list of the 10 European stocks to buy according to Tom Russo’s hedge fund is Swedish Match AB (publ) (OTC:SWMAY), which is a Swedish company known for its smokeless tobacco products like snus, moist snuff, chewing tobacco, cigars, and matches. Founded in 1915, headquartered in Stockholm, Sweden, Swedish Match AB (publ) (OTC:SWMAY) operates across 11 countries. The company’s chewing tobacco brand, Red Man, holds 40% of the USA market share, whereas the brands manufacturing matches under Swedish Match AB (publ) (OTC:SWMAY) are market leaders in the UK, Scandinavia, France, Spain, Australia, and Brazil. The company has a market cap of $13.7 billion.
Russo’s hedge fund owns 1.35 million shares in Swedish Match AB (publ) (OTC:SWMAY), amounting to $11.59 million, and making up 0.09% of Russo’s 13F portfolio.
On September 15, a Reuters report suggested that by the second half of 2022, Swedish Match AB (publ) (OTC:SWMAY) plans to separate its USA cigar business and list it on a major securities exchange. This would mean that the company would exit from the combustible tobacco products segment.
7. Davide Campari-Milano N.V. (OTC:DVDCF)
Russo’s Stake Value: $11,815,000
Percentage of Russo’s 13F Portfolio: 0.09%
Number of Hedge Fund Holders: N/A
Russo’s hedge fund owns 882,086 shares in Davide Campari-Milano N.V. (OTC:DVDCF), amounting to $11.8 million, and making up 0.09% of Russo’s 13F portfolio.
The company’s leading beverage, Aperol, has a lot of competition in the market. Yet, on August 31, the company CEO, Bob Kunze-Concewitz said in a Reuters interview that Davide Campari-Milano N.V. (OTC:DVDCF) is not worried about the growing competition, and that Aperol has tremendous potential for growth in the coming years. By company estimates, they can penetrate a larger market share among beer drinkers and experience growth by double digits.
Like Exxon Mobil Corporation (NYSE:XOM), Alphabet Inc. (NASDAQ:GOOG), and Berkshire Hathaway Inc. (NYSE:BRK-B), Davide Campari-Milano N.V. (OTC:DVDCF) is a notable stock in Russo’s Q2 portfolio.
6. Anheuser-Busch InBev SA/NV (NYSE:BUD)
Russo’s Stake Value: $380,024,000
Percentage of Russo’s 13F Portfolio: 3.21%
Number of Hedge Fund Holders: 18
Anheuser-Busch InBev SA/NV (NYSE: BUD), widely known as AB InBev, is a Belgian drink and brewing company, and it ranks sixth on our list of the 10 European stocks to buy according to Tom Russo’s hedge fund. The mega-corporation headquartered in Leuven, Belgium, has a vast global footprint – boasting offices in New York City, São Paulo, London, St. Louis, Mexico City, Bremen, and Johannesburg among others. Primarily listed on the Euronext Brussels, the company has secondary listings on the Mexico City, Johannesburg, and New York Stock Exchanges.
After acquiring or merging with several medium and large-scale breweries, AB InBev’s portfolio has more than 400 local, international and global beer brands. The most popularly recognized global beer brands under AB InBev include Budweiser, Corona, and Stella Artois. The company has a market cap of $113.09 billion.
Russo’s hedge fund owns 5.26 million shares in Anheuser-Busch InBev SA/NV (NYSE: BUD), amounting to $380 million, and making up 3.21% of Russo’s 13F portfolio.
At the end of the second quarter of 2021, 18 hedge funds in Insider Monkey’s database held stakes amounting to $1.2 billion in Anheuser-Busch InBev SA/NV (NYSE: BUD). This is compared to the same number of hedge funds in the previous quarter, with stakes worth $979.9 million.
Like Exxon Mobil Corporation (NYSE:XOM), Alphabet Inc. (NASDAQ:GOOG), and Berkshire Hathaway Inc. (NYSE:BRK-B), Anheuser-Busch InBev SA/NV (NYSE: BUD) is a notable stock in Russo’s Q2 portfolio.
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Disclosure: None. 10 European Stocks to Buy According to Tom Russo’s Hedge Fund is originally published on Insider Monkey.
