In this article, we will discuss 10 stocks to buy today according to British billionaire David Harding based on Q2 holdings of the fund. If you want to skip our detailed analysis of Harding’s history, investment philosophy, and hedge fund performance, go directly to 5 Stocks to Buy Today According to British Billionaire David Harding.
David Harding is a British billionaire who established Winton Capital Management in 1997 with less than $2 million.
Winton Capital Management is a leader in computer-driven investments and invests in global financial markets using statistical and mathematical research.
However, Harding’s fund has been struggling amid the coronavirus pandemic and investor exodus. According to Financial Times, the company’s assets have decreased by 80% in the last five years. Client withdrawals have also increased due to the decline, with investor assets standing at $7.3 billion in 2020, down from $33.7 billion in 2015. The hedge fund’s 13F portfolio is valued at approximately $1.86 billion as of the second quarter of 2021.
In the second quarter of 2021, some notable names in Winton’s portfolio include Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOG).
Winton Capital Management owns 5,686 shares in Apple Inc. (NASDAQ: AAPL) after reducing its holding by 89% from the first quarter of 2021. On August 19, JPMorgan analyst Samik Chatterjee raised the price target on Apple Inc. (NASDAQ: AAPL) to $180 from $175 and reiterated an “Overweight” rating on the shares. Apple Inc. (NASDAQ: AAPL) shares have returned 17.26% to investors over the course of the past 12 months.
Winton also has a stake in Microsoft Corporation (NASDAQ: MSFT). Even though his hedge fund slashed its stake in the tech giant by 59% in the second quarter of 2021, it still owns 7,590 shares of Microsoft Corporation (NASDAQ: MSFT), worth $2.06 million. On August 25, Microsoft Corporation (NASDAQ: MSFT) announced that it expects to triple its cyber security spending to $20 billion within the next five years. On August 20, UBS analyst Karl Keirstead raised the price target on Microsoft Corporation (NASDAQ: MSFT) to $350 from $325 and maintained a “Buy” rating on the shares. There were 238 hedge funds in our database that held stakes in Microsoft Corporation (NASDAQ: MSFT) in the second quarter of 2021, compared to 251 funds in the quarter earlier.
The billionaire is also bullish on Alphabet Inc. (NASDAQ: GOOG). He increased his stake in the company by 1,072% in the second quarter of 2021, ending the period with 2,754 shares of the company, worth $6.73 million. On August 24, Waymo, Alphabet Inc. (NASDAQ: GOOG) autonomous driving subsidiary, started self-driving taxis in San Francisco, marking the company’s second such service launch. On July 28, Wedbush analyst Michael Pachter raised the price target on Alphabet Inc. (NASDAQ: GOOG) to $3,424 from $3,127 and kept an “Outperform” rating on the shares. Alphabet Inc. (NASDAQ: GOOG) currently has a $1.89 trillion market capitalization and was able to deliver a 74.93% return in the past 12 months.
David Harding of Winton Capital Management
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Here is a list of stocks to buy today according to British billionaire David Harding. We used Harding’s 13F portfolio for the second quarter of 2021 for this analysis.
Stocks to Buy Today According to British Billionaire David Harding
10. Altria Group, Inc. (NYSE: MO)
Harding’s Stake Value: $10,619,000
Percentage of David Harding’s 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 47
Altria Group, Inc. (NYSE: MO) produces and trades oral tobacco products, cigarettes, and wine through its subsidiaries. It was established in 1822 and is ranked tenth on the list of 10 stocks to buy today according to British billionaire David Harding. Altria Group, Inc. (NYSE: MO) currently has an $89.71 billion market capitalization.
On July 29, Altria Group, Inc. (NYSE: MO) announced earnings for the second quarter of 2021. It declared earnings per share of $1.23, beating the estimates by $0.06. The revenue over the period was $5.6 billion, down 12.1% YoY, beating the market predictions by $240 million. On June 17, Redburn initiated a coverage on Altria Group, Inc. (NYSE: MO) with a “Neutral” rating.
David Harding’s hedge fund owns 222,712 shares of Altria Group, Inc. (NYSE: MO), worth $10.62 million. Winton Capital Management increased its stake in the firm by 234% in the second quarter of 2021. There were 47 hedge funds in our database that held stakes in Altria Group, Inc. (NYSE: MO) in the second quarter of 2021, compared to 38 funds in the first quarter.
Just like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOG), Altria Group, Inc. (NYSE: MO) is a notable stock in Winton’s portfolio.
In its second-quarter 2021 investor letter Broyhill Asset Management mentioned Altria Group, Inc. (NYSE: MO). Here is what the fund said:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
9. Otis Worldwide Corporation (NYSE: OTIS)
Harding’s Stake Value: $11,865,000
Percentage of David Harding’s 13F Portfolio: 0.63%
Number of Hedge Fund Holders: 45
Otis Worldwide Corporation (NYSE: OTIS) manufactures, installs, and services elevators and escalators globally. It was founded in 1853, and it stands ninth on the list of 10 stocks to buy today according to British billionaire David Harding. The shares of Otis Worldwide Corporation (NYSE: OTIS) is up over 45.02% over the last 12 months.
On July 29, Otis Worldwide Corporation (NYSE: OTIS) posted earnings for the second quarter of 2021. It announced earnings per share of $0.79, beating the analysts’ expectations by $0.07. The revenue over the period was $3.70 billion, up 22.19% YoY, surpassing the market predictions by $239.70 million. On July 27, Credit Suisse analyst John Walsh raised the price target on Otis Worldwide Corporation (NYSE: OTIS) to $91 from $84 and kept a “Neutral” rating on the shares.
Winton Capital Management holds 145,102 shares in Otis Worldwide Corporation (NYSE: OTIS), worth $11.87 million. This represents 0.63% of their portfolio. Otis Worldwide Corporation (NYSE: OTIS) saw a decrease in hedge fund sentiment recently. The number of hedge fund positions declined to 45 in the second quarter of 2021, compared to 52 positions in the previous quarter.
Just like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOG), Otis Worldwide Corporation (NYSE: OTIS) is a notable stock in Winton’s portfolio.
8. Philip Morris International Inc. (NYSE: PM)
Harding’s Stake Value: $12,174,000
Percentage of David Harding’s 13F Portfolio: 0.65%
Number of Hedge Fund Holders: 46
Philip Morris International Inc. (NYSE: PM) manufactures and sells cigarettes, other nicotine-containing goods, smoke-free products, as well as related electronic devices and accessories through its subsidiaries. It was incorporated in 1987 and is ranked eighth on the list of 10 stocks to buy today according to British billionaire David Harding. Philip Morris International Inc. (NYSE: PM) shares have offered investors 26.42% in returns over the course of the past 12 months.
On August 23, Philip Morris International Inc. (NYSE: PM) announced it is seeking Japan’s permission for higher cigarette costs and lower-risk products. On August 19, Deutsche Bank analyst Gerry Gallagher raised the price target on Philip Morris International Inc. (NYSE: PM) to $120 from $114 and kept a “Buy” rating on the shares.
Winton Capital Management holds 122,835 shares in Philip Morris International Inc. (NYSE: PM) worth $12.17 million, representing 0.65% of their portfolio. The hedge fund has increased its stake in the firm by 49% in the second quarter of 2021. Terry Smith’s Fundsmith LLP is a leading shareholder in Philip Morris International Inc. (NYSE: PM), with 19.35 million shares worth $1.92 billion.
Just like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOG), Philip Morris International Inc. (NYSE: PM) is a notable stock in Winton’s portfolio.
In its second-quarter 2021 investor letter of Broyhill Asset Management, mentioned Philip Morris International Inc. (NYSE: PM). Here is what the fund said:
“Philip Morris (PM) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 23%. We shared our thoughts on these regulations during the quarter, which are available here.
‘PM Valuation. PM is up ~ 15% YTD and would have the most to gain under a nicotine cap. A cap would likely accelerate conversion to iQOS, which is 100% incremental for PM (PM also has zero exposure to combustible cigarettes in the U.S. and licenses its IQOS product for MO to distribute domestically). As such, the decline in PM was much more muted, with the stock hitting new 52 week highs a day after the Biden headline, driven by yesterday’s earnings release. It didn’t take long for investors to shift their attention back to fundamentals and the fundamentals here are best in class. In short, results beat estimates across the board (a recurring theme here), and management raised guidance for the full year (another recurring theme). IQOS continued to deliver impressive growth, recording continued market share gains on the heels of continued user acquisition growth, up 1.5M to 19.1M total users. Importantly, IQOS now represents nearly 30% of PM net revenues (management expects “smoke-free” products to represent more than half of their business by 2025, which should make the ESG folks happy), which is driving top-line growth and margin expansion. Hard to believe that they have created a product with higher margins than combustible cigarettes!! We expect PM operating margins to increase by 100bps – 200bps annually as IQOS continues to gain share. The stock trades at ~ 15x today or 2/3 of the market’s multiple for a business likely to generate $35B in cash flow – or 25% of the market cap – in just the next three years. Over the last decade, shares have traded at an average multiple of 18x and within a range of ~ 14x – 22x (+/-1 standard deviation). The stock yields 5.1% at the current price, and we expect management to resume share purchases in the back half of this year.’”
7. Amphenol Corporation (NYSE: APH)
Harding’s Stake Value: $12,452,000
Percentage of David Harding’s 13F Portfolio: 0.66%
Number of Hedge Fund Holders: 39
Amphenol Corporation (NYSE: APH) and its subsidiaries design, manufacture, and market electronic, electrical, and fiber optic connectors globally. It was founded in 1932 and is placed seventh on the list of 10 stocks to buy today according to British billionaire David Harding. Shares of Amphenol Corporation (NYSE: APH) surged 40.29% in the past 12 months.
On August 5, Amphenol Corporation (NYSE: APH) declared a quarterly dividend of $0.145 per share, in line with the previous. On August 3, Cowen analyst Joseph Giordano raised the price target on Amphenol Corporation (NYSE: APH) to $80 from $75 and maintained an “Outperform” rating on the shares.
David Harding’s Winton Capital Management increased its hold in Amphenol Corporation (NYSE: APH) by 9% in the second quarter of 2021, ending the period with 182,018 shares of the company, worth $12.45 million. Amphenol Corporation (NYSE: APH) saw a decrease in hedge fund sentiment recently. The number of hedge fund positions declined to 39 in the second quarter compared to 42 positions in the previous quarter.
Just like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOG), Amphenol Corporation (NYSE: APH) is a notable stock in Winton’s portfolio.
6. CME Group Inc. (NASDAQ: CME)
Harding’s Stake Value: $12,774,000
Percentage of David Harding’s 13F Portfolio: 0.68%
Number of Hedge Fund Holders: 62
CME Group Inc. (NASDAQ: CME) and its subsidiaries run contract markets for trading futures and options on futures contracts. It was incorporated in 1898 and is ranked sixth on the list of 10 stocks to buy today according to British billionaire David Harding. CME Group Inc. (NASDAQ: CME) shares have offered investors 13.30% in returns over the past 12 months.
On August 5, CME Group Inc. (NASDAQ: CME) declared a quarterly dividend of $0.90 per share, in line with the previous. On June 10, Credit Suisse analyst Craig Siegenthaler initiated a coverage on CME Group Inc. (NASDAQ: CME) with a “Neutral” rating and gave the price target of $183.
The hedge fund managed by David Harding owns 60,061 shares in CME Group Inc. (NASDAQ: CME), worth $12.77 million, representing 0.68% of their portfolio. As of the second quarter of 2021, 62 hedge funds held a stake in CME Group Inc. (NASDAQ: CME) compared to 60 funds in the first quarter.
Just like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Alphabet Inc. (NASDAQ: GOOG), CME Group Inc. (NASDAQ: CME) is a notable stock in Winton’s portfolio.
Cooper Investors, in its first-quarter 2021 investor letter, mentioned CME Group Inc. (NASDAQ: CME). Here is what the fund said:
“CME has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
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Disclosure: None. 10 Stocks to Buy Today According to British Billionaire David Harding is originally published on Insider Monkey.
