In this article, we are going to take a look at the 10 stocks to buy now according to billionaire Howard Marks. If you want to skip our detailed analysis of Marks’ history, investment philosophy, and hedge fund performance, you can proceed straight to the top 5 Stocks to Buy Now According to Billionaire Howard Marks.
An admired icon in the investor community, Howard Marks is an American billionaire who is the co-chairman and co-organizer at Oaktree Capital Management. Having started his career at Citicorp’s in 1969, Howard Marks rose through the ranks to become Vice President, before joining TCW Group in 1985 as their fund manager. Ultimately, Mr. Marks founded Oaktree Capital Management with several TCW colleagues in 1995.
Based in Los Angeles, Oaktree is the biggest financier of distressed securities worldwide. Investing primarily in corporate debt, distressed debt, and convertible bonds, Oaktree Capital Management has continuously posted excellent returns for its investors, which are mainly pension funds and sovereign funds. The fund went public through an IPO in 2012 and is currently trading as Oaktree Capital Group LLC (NYSE-OAK-A) (NYSE:OAK-B).
At the same time, Oaktree is reporting quarterly 13F filings with the Securities and Exchange Commission. As of the end of the second quarter of 2021, the fund’s 13F portfolio is valued at approximately $7.45 billion.
Among Howard Marks’ and Oaktree’s highest positions are companies like PG&E Corporation (NYSE: PCG), Vistra Corporation (NYSE: VST), and Chesapeake Energy Corporation (NASDAQ: CHK).
Howard Marks of Oaktree Capital Management
But why should you pay attention to what billionaire investors are buying and selling? The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices.
On the other hand, 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 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market.
We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is a useful indicator that investors should pay special attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context and industry outlook in mind, we picked the top 10 stock picks of American billionaire Howard Marks, according to Oaktree’s latest 13F filing. In addition, we are going to take a look at the overall hedge fund sentiment towards the companies that Howard Marks is bullish on.
10 Best Stocks to Buy Now According to Billionaire Howard Marks
10. Cemex S.A.B. de C.V. (NYSE:CX)
Holding Value: $200.54 million
Percentage of 13F portfolio: 2.69%
Total Number of Hedge Fund Holders: 23
Cemex S.A.B. de C.V. (NYSE:CX) kicks off our list of best stocks to buy now according to billionaire Howard Marks. The Mexico-based company deals in the provision of cement, ready-mix concrete, and other related products through its geographical segments around the globe. According to its latest 13F, Oaktree Capital Management holds 23.87 million shares of Cemex S.A.B de C.V (NYSE:CX) worth $200.54 million.
On 11th October, research firm Berenberg maintained its ‘Buy’ rating on Cemex S.A.B. de C.V. (NYSE:CX) stock, setting a price target of $10.5.
In the second quarter of 2021, Cemex S.A.B. de C.V. (NYSE: CX) posted EPS of $0.06, missing estimates by $0.11. The company’s revenue for stood at $3.86 billion, beating analysts’ forecasts by $263.99 million.
As of the end of June, 23 hedge funds out of the 873 tracked by Insider Monkey held stakes in Cemex S.A.B. de C.V. (NYSE: CX) worth $601.77 million in aggregate, compared to 24 hedge funds holding $471.44 million worth of positions in the company in the previous quarter.
9. SunOpta Inc. (NASDAQ:STKL)
Holding Value: $218.87 million
Percentage of 13F portfolio: 2.93%
Number of Hedge Fund Holders: 26
Then there’s SunOpta Inc. (NASDAQ:STKL), in which Oaktree holds a $218.87 million stake containing 20.73 million shares. SunOpta sells food and beverage products to retail customers, food manufacturers, and branded food companies around the world through its two segments: Plant-Based Foods and Beverages, and Fruit-Based Foods and Beverages.
SunOpta Inc. (NASDAQ:STKL) reported EPS of $0.01 and revenue of $202.27 million for the second quarter, beating the estimates by $0.01 and $3.99 million, respectively. The company’s stock has appreciated by 11.84% in the last year.
There were 26 funds tracked by Insider Monkey bullish on SunOpta Inc. (NASDAQ:STKL) at the end of June, up by five over the quarter. At the same time, the total value of these funds’ holdings declined to $514.67 million from $633.04 million.
8. Infinera Corp. (NASDAQ:INFN)
Holding Value: $256.79 million
Percentage of 13F portfolio: 3.44%
Number of Hedge Fund Holders: 21
On the eighth spot among best stocks to buy now according to billionaire Howard Marks is Infinera Corp (NASDAQ:INFN), provider of optical networking equipment, software and related services. In its latest 13F, Oaktree Capital Management disclosed ownership of 25.18 million shares of Infinera Corp (NASDAQ:INFN).
Overall, there were 21 funds in our database long Infinera Corp (NASDAQ:INFN) at the end of second quarter, holding $428.24 million worth of stock. This represents an increase from 20 funds with $372.72 million in shares a quarter earlier. .
The company missed the second-quarter estimates of a loss of $0.01 per share by reporting a loss of $0.03. At the same time, its revenue of $338.23 million was $6.65 million lower than expected.
7. PG&E Corporation. (NYSE:PCG)
Holding Value: $305.10 million
Percentage of 13F portfolio: 4.09%
Number of Hedge Fund Holders: 64
In PG&E Corporation (NYSE:PCG), Oaktree reported a $305.10 million position that included 30.0 million shares at the end of June. During the second quarter, the fund added 7.50 million shares to its holding, becoming one of the top shareholders among Institutional Investors. Aside from Marks, there were 63 other funds tracked by Insider Monkey bullish on PG&E Corporation (NYSE:PCG), down by one over the quarter. In aggregate, these investors own $4.66 billion worth of shares as of the end of June.
PG&E Corporation (NYSE:PCG) was founded in 1905 and is focused on the generation, storage and transmission of electricity and natural gas to consumers across California. For the second quarter of 2021, PG&E Corporation (NYSE: PCG) reported EPS of $0.27, missing the consensus estimate by $0.01. The firm raked in $5.21 billion in quarterly revenue, beating analysts’ forecasts by $407.98 million.
6. Ally Financial Inc. (NYSE:ALLY)
Holding Value: $342.63 million
Percentage of 13F portfolio: 4.6%
Number of Hedge Fund Holders: 54
Next in line in the list of the best stocks to buy now according to billionaire Howard Marks is Detroit-based financial company Ally Financial Inc (NYSE:ALLY). In its latest 13F filing, Marks’ Oaktree included a $342.63 million position in the company that contained 6.87 million shares, down by 4.30 million shares compared to the end of March.
Ally Financial Inc. (NYSE:ALLY) provides digital financial services and products to corporate, consumer, and commercial customers through its four segments: Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations.
Earlier this month Stephens & Co. downgraded its rating on Ally Financial Inc. (NYSE:ALLY)’s stock to ‘Equal-Weight’, with a price target of $67. In the second quarter, Ally Financial Inc (NYSE:ALLY)’s EPS of $2.33 topped the consensus by $0.83, while its revenue of $2.08 billion was $213.29 million higher than expected.
As of the end of the second quarter, 54 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ally Financial Inc (NYSE: ALLY) worth $2.43 billion in aggregate, compared to 51 hedge funds holding $2.80 billion a quarter earlier.
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Disclosure: None. 10 Stocks to Buy Now According to Billionaire Howard Marks is originally published on Insider Monkey.
