In this article, we will discuss 10 stocks to buy now according to billionaire Jeffrey Talpins. If you want to skip our detailed analysis of these stocks, you can go directly to 5 Stocks to Buy Now According to Billionaire Jeffrey Talpins.
Jeffrey Talpins is the founder, CEO, and CIO of Element Capital Management. He founded the hedge fund back in 2005 and started with assets under management (AUM) of $250 million, which have risen to over $18 billion today by employing macro trading strategies. The macro trading strategy relies upon seeing changes in global macroeconomic trends and making investment decisions accordingly. According to Forbes, his net worth stands at a staggering $2.2 billion.
In 1997, Talpins completed his B.S in Economics and Applied Mathematics from the prestigious Yale University. He was Summa Cum Laude and Phi Beta Kappa from his class. Following his graduation, he started at The Goldman Sachs Group, Inc. (NYSE:GS) in the mortgage-backed securities department to learn tricks of the trade on Wall Street. After a brief period, he joined Citigroup Inc. (NYSE:C) in the fixed income options franchise and left as Head Trader in 2005 to start his hedge fund.
Element Capital has been regarded as one of the best hedge funds in the past decade. This can be testified by the fact that Barron’s has included it in its annual Top 100 Hedge Funds list more than eight times in the past decade. Element Capital Management has been posting annualized returns of more than 20% since its inception.
Talpins’ hedge fund employs a multi-process investment strategy that incorporates a number of macro analytical techniques in line with his global macro investing philosophy. Such an investing strategy has shown to be beneficial to Element Capital Management, as the fund has consistently outperformed the majority of other funds year after year. For example, in 2016, the fund was able to generate returns of 19.4%, above the 2.3% average return of comparable hedge funds at the time. The fund’s performance has been stable, with returns of 17.3% in 2018 and 12% in 2019.
Element Capital gained 18.8% during a tumultuous 2020 for markets. The fund, which placed a shrewd bet on the efficiency of the coronavirus vaccine late last year, emerged as one of the pandemic’s hedge fund winners. As markets dropped in September, the fund profited from wagers against European equities. According to an investor letter written to clients on October 26, Element Capital forecasted that the BioNTech/Pfizer vaccine would startle investors with a 75-to-90% effectiveness. Two weeks later, it was revealed that the vaccine had been shown to be more than 90% effective, causing several stock prices to surge.
Some of the stocks in which Element Capital Management initiated new positions in Q3 2021 include McAfee Corp. (NASDAQ:MCFE), Coursera Inc. (NYSE:COUR), and Olo Inc. (NYSE:OLO).
Jeffrey Talpins of Element Capital
Our Methodology
In this article, we will look at 10 stocks to buy now according to billionaire Jeffrey Talpins. These top 10 picks make up more than 54% of his portfolio. We did not include the SPACs from his portfolio in our list.
10 Stocks to Buy Now According to Billionaire Jeffrey Talpins
10. Overstock.com, Inc. (NASDAQ:OSTK)
Element Capital’s Stake Value: $4,807,000
Percentage of Element Capital’s 13F Portfolio: 2.1%
Overstock.com, Inc. (NASDAQ:OSTK) is an online retailer of bedding and bath, décor, furniture, and housewares products, which is visited by nearly 40 million customers every month. In terms of online revenue, Overstock.com, Inc. (NASDAQ:OSTK) is the fourth biggest player in the online home furnishing brand with Amazon.com, Inc. (NASDAQ:AMZN), Wayfair Inc. (NYSE:W), and Walmart Inc. (NYSE:WMT) occupying the top three positions.
The Salt Lake City, Utah-based company has also diversified as a technology company leading the adoption, acceleration, and development of blockchain technologies through its wholly-owned subsidiary Medici Ventures in 2014, around the same time when the online retailer started accepting cryptocurrency.
Overstock.com, Inc. (NASDAQ:OSTK) reported its Q3 2021 results before the opening bell on October 28. Although revenue declined by 3.9% YoY to $689.39 million, it was $6.56 million higher than the consensus estimate of $682.33 million. Meanwhile, the non-GAAP EPS for the quarter was 54 cents and outperformed consensus estimates of 31 cents by 23 cents.
On October 29, Tom Forte at DA Davidson increased the target price on Overstock.com, Inc. (NASDAQ:OSTK) from $130 to $157 and maintained a Buy rating. The analyst anticipates improvement in the top line following the 3.9% decline. The analyst also expects the stock to trade in line with Wayfair’s 2x enterprise value to expected sales multiples.
In addition to Overstock.com, Inc. (NASDAQ:OSTK), Jeffrey Talpins’ Element Capital also has a stake in McAfee Corp. (NASDAQ:MCFE), Coursera Inc. (NYSE:COUR), and Olo Inc. (NYSE:OLO) as of the third quarter 2021.
9. KKR Real Estate Finance Trust Inc. (NYSE:KREF)
Element Capital’s Stake Value: $4,909,000
Percentage of Element Capital’s 13F Portfolio: 2.14%
KKR Real Estate Finance Trust Inc. (NYSE:KREF) is a mortgage real estate investment trust (REIT) that focuses on originating senior loans backed by commercial real estate assets. The company’s AUM stands at around $38 billion, and it carries a loan of around $5.3 billion in the most liquid real estate markets with an average loan size of around $118 million.
Furthermore, more than 97% of KKR Real Estate Finance Trust Inc.’s (NYSE:KREF) loan portfolio comprises performing loans with an average weighted risk rating of 3.1. KKR Real Estate Finance Trust Inc. (NYSE:KREF) has a team of over 130 real estate professionals spread across nine offices globally. The company is externally managed by KKR Inc. (NYSE:KKR). This means that KREF can use the expertise, experience, and relationships of KKR to gain a benefit in the real estate credit market.
On October 27, KKR Real Estate Finance Trust Inc. (NYSE:KREF) announced that it would make a secondary offering of five million common stock priced at $22 per share to acquire new target assets and for general corporate purposes as well. Underwriters will also have an option to exercise an additional issue of 750,000 shares if required.
8. EQT Corporation (NYSE:EQT)
Element Capital’s Stake Value: $5,657,000
Percentage of Element Capital’s 13F Portfolio: 2.47%
EQT Corporation (NYSE:EQT) is the biggest independent natural gas producer in the US, with its presence in the core of the Appalachian Basin spread across Ohio, Pennsylvania, and West Virginia. The company also integrated with midstream assets. EQT Corporation (NYSE:EQT) holds over 340 active wells with 252,000 acres and an average daily production of 1.4 Bcfe/d.
On November 19, Devin McDermott at Morgan Stanley upgraded EQT Corporation (NYSE:EQT) from an Equal Weight to an Overweight rating and increased the price target from $24 to $31. The analyst had highlighted that EQT Corporation (NYSE:EQT) stock has underperformed compared to its competitors in the natural gas exploration and production (E&P) industry due to hedges done at below-market prices, which harmed the near-term cash flow situation and this caused investors to opt for crude oil E&P companies. As the hedges will roll over in the coming year, this will improve the cash flow situation of the Pittsburgh, Pennsylvania-based company and act as a catalyst for better stock price performance and cash returns for investors in the form of dividends and share repurchase.
Of the 867 hedge funds being tracked by Insider Monkey, 57 held a stake in EQT Corporation (NYSE:EQT) at the end of Q3 2021, up from 43 in the preceding quarter.
7. CME Group Inc. (NASDAQ:CME)
Element Capital’s Stake Value: $5,801,000
Percentage of Element Capital’s 13F Portfolio: 2.53%
CME Group Inc. (NASDAQ:CME) is an operator of the futures contract market across the world. The company provides various futures and options products benchmarked on commodities, cryptocurrency, energy, equities, foreign exchange, interest rates, metals, etc. CME Group Inc. (NASDAQ:CME) also offers fixed-income products via its electronic trading platform. CME (Chicago Mercantile Exchange) group caters to the requirements of central banks corporations, governments, individual and institutional investors, and many others. CME Group Inc. (NASDAQ:CME) recently entered into a 10-year partnership agreement with Google to move its infrastructure to Google Cloud.
CME Group Inc. (NASDAQ:CME) reported its Q3 2021 results on October 27. The company missed revenue estimates of $1.15 billion by $40 million but was able to outperform the consensus non-GAAP EPS estimate of $1.56 by four cents.
In a research note on October 1, Richard Repetto at Piper Sandler expects CME Group Inc. (NASDAQ:CME) stock to experience “meaningful price appreciation” at the back end of 2021 as the stock is a play on the rising interest rates and volatility in the market. The analyst gave an Overweight rating to CME Group Inc. (NASDAQ:CME) stock with a $230 target price.
6. Sportradar Group AG (NASDAQ:SRAD)
Element Capital’s Stake Value: $7,414,000
Percentage of Element Capital’s 13F Portfolio: 3.24%
Sportradar Group AG (NASDAQ:SRAD) is a Swiss provider of sports betting and data firm that became public in September 2021 with an $8 billion valuation. Although it may have entered the public markets in the US recently, the company is a 20-year veteran in providing content, data, and software services through subscription and revenue-sharing models with betting companies, media giants, and sports leagues.
Sportradar Group AG (NASDAQ:SRAD) caters to more than 1,600 customers spread across over 120 countries. Some of its notable customers include DraftKings Inc. (NASDAQ:DKNG), Twitter, Inc. (NASDAQ:TWTR), and The Walt Disney Company (NYSE:DIS) owned ESPN.
On November 17, the company extended a long-term partnership with the National Basketball Association (NBA) in the US that will allow the NBA to take an equity stake in Sportradar Group AG (NASDAQ:SRAD).
On November 18, Steven Pizzella at Deutsche Bank highlighted Sportradar Group AG’s (NASDAQ:SRAD) “strong” Q3 2021 results. In the research note, he highlighted that the quarterly outperformance along with a solid outlook gave him the confidence to give Sportradar Group AG (NASDAQ:SRAD) stock a Buy rating with a $27 target price.
Apart from Sportradar Group AG (NASDAQ:SRAD), Element Capital also held stakes in McAfee Corp. (NASDAQ:MCFE), Coursera Inc. (NYSE:COUR), and Olo Inc. (NYSE:OLO) at the end of Q3 2021.
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Disclose. None. 10 Stocks to Buy Now According to Billionaire Jeffrey Talpins is originally published on Insider Monkey.
