10 Stocks Under $50 Billionaires Are Loading Up On

Published on June 20, 2023 at 11:43 am by Muhammad Jamal Akbar in Hedge Funds, News

In this article, we will take a look at 10 stocks under $50 billionaires are loading up on. To skip our analysis of the recent market activity, you can go directly to see the 5 Stocks Under $50 Billionaires Are Loading Up On.

The global economy has taken massive hits in the recent past starting with the covid-19 pandemic which was followed by the Russia – Ukraine conflict. These major global catastrophes led to supply constraints and other issues which ultimately led to inflationary pressures almost all across the world. The response across the board was an increase in interest rates by the central banks.

The U.S. Federal Reserve delivered 10 consecutive interest rate hikes starting from March 2022. These hikes added full 5 percentage points to the interest rate prior to March 2022 and included four interest rate hikes of 75 basis points. In its latest meeting concluded on June 14, the Fed decided to hold off hikes for the time being with the possibility of two 25 bps increases by the end of the year.

The increase in interest rates has had a significant impact on equity valuations and there has been significant pressure on stock prices in the past year or so. In times of adversity, it pays to look up to others that have historically performed well in similar circumstances. This is the rationale behind emulating the strategies of billionaires and prominent hedge funds. You can read more about it here.

The Insider Monkey team earlier covered 10 stocks under $50 to buy according to hedge funds. The article can be found here.

Our list of 10 stocks under $50 billionaires are loading up on includes leading companies across multiple sectors, including Chinese ecommerce giant JD.Com, Inc. (NASDAQ:JD), South Korean ecommerce company Coupang, Inc. (NYSE:CPNG), global ride hailing leader Uber Technologies, Inc. (NYSE:UBER), and Pinterest, Inc. (NYSE:PINS), among others.

Photo by Karolina Grabowska from Pexels

Methodology

We used stock screeners to shortlist stocks that were trading at a share price of less than $50. We then corroborated the list with our database of stock ownership by billionaires. The final step involved the ranking of the identified list of stocks based on their popularity among the billionaires tracked by Insider Monkey.

10 Stocks Under $50 Billionaires Are Loading Up On

10. PG&E Corporation (NYSE:PCG)

Number of Billionaire Holders: 14

PG&E Corporation (NYSE:PCG), based in Oakland, California, is an energy company that provides natural gas and electricity to nearly 16 million people throughout northern and central California. Its network is spread across 70,000 square miles and includes more than 100,000 circuit miles of electric distribution lines.

On May 4, PG&E Corporation (NYSE:PCG) released its financial results for Q1 2023. Its operating revenues increased by 7% y-o-y to $6.2 billion, while a net income of $572 million was generated during the period.

On June 6, RBC Capital analyst Shelby Tucker raised the price target on PG&E Corporation (NYSE:PCG) shares to $21 from $20 and maintained an ‘Outperform’ rating for the shares. The company is working on improvement in its safety processes which, combined with advanced technologies deployed by the company, should reduce risks from wildfires in the future.

As of Q1 2023, PG&E Corporation (NYSE:PCG) shares were held by 52 hedge funds with the total shares held by them valued at $2.9 billion. Dan Loeb’s Third Point was its largest hedge fund shareholder with ownership of 59.3 million shares valued at $958 million.

9. The Kroger Co. (NYSE:KR)

Number of Billionaire Holders: 14

Cincinnati, Ohio-based The Kroger Co. (NYSE:KR) is one of the world’s largest food retailers with more than 2,700 supermarkets and multi-department stores spread across 35 states in the United States. Its network also includes over 1,600 supermarket fuel centers, 2,200 pharmacies, 33 food production plants, and 44 distribution centers.

In October 2022, The Kroger Co. (NYSE:KR) announced that it had entered into a definitive agreement to acquire Boise, Idaho-based grocery company, Albertsons Companies, Inc. (NYSE:ACI) that values the company at $24.6 billion. The transaction is expected to close in H1 2024 and may require both companies to make store divestitures to obtain requisite regulatory clearance.

The Kroger Co. (NYSE:KR) has paid regular dividends since the payouts were reinstated in 2006. The dividends have grown at double-digit CAGR since that time and the company currently pays a quarterly dividend of $0.26 per share.

The Kroger Co. (NYSE:KR) shares were owned by 43 hedge funds with a total value of $4.0 billion, as of March 31, 2023. Warren Buffett’s Berkshire Hathaway was its largest hedge fund shareholder with ownership of 50 million shares valued at $2.5 billion.

Oakmark Funds, advised by Harris Associates, made the following comment about The Kroger Co. (NYSE:KR) in its Q1 2023 investor letter:

“Although the grocery industry is highly competitive, Kroger’s scale advantages allow it to offer a more compelling value proposition than smaller peers and earn higher returns on capital. In recent years, the market has assigned Kroger a lower multiple due to concerns that e-commerce would disrupt traditional brick-and mortar grocery businesses. However, we believe Kroger’s performance through the pandemic highlighted that its store footprint, distribution infrastructure, technology investments and strong brand all position the company well for a world with higher online grocery adoption.”

8. The Kraft Heinz Company (NASDAQ:KHC)

Number of Billionaire Holders: 14

Chicago, Illinois-based The Kraft Heinz Company (NASDAQ:KHC) is one of the largest food and beverage companies in the world. Its portfolio includes iconic brands, including Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid, Jell-O, Primal Kitchen, and Classico, among others.

The Kraft Heinz Company (NASDAQ:KHC) delivered strong results in Q1 2023 with both revenue and net income up more than 7% on a year-on-year basis. It generated $6.5 billion in net sales and $836 million in net income for the quarter. Following a strong performance in the quarter, the company also raised its adjusted EPS guidance for 2023 from an upper limit of $2.75 to $2.91.

On June 14, Morgan Stanley analyst Pamela Kaufman lowered the price target on The Kraft Heinz Company (NASDAQ:KHC) shares to $39 from $44 and maintained an ‘Equal weight’ rating for the shares.

As of Q1 2023, The Kraft Heinz Company (NASDAQ:KHC) shares were held by 34 of the 943 hedge funds tracked by Insider Monkey, with a total value of $13.1 billion. Warren Buffett’s Berkshire Hathaway was its largest hedge fund shareholder with ownership of 326 million shares valued at $12.6 billion.

7. CSX Corporation (NYSE:CSX)

Number of Billionaire Holders: 15

Based in Jacksonville, Florida, CSX Corporation (NYSE:CSX) is a leading transportation services provider with a railroad network extending to 20,000 route miles, connecting customers to major ports, distribution centers, and every major metropolitan area in the eastern United States.

On June 1, UBS analyst Thomas Wadewitz upgraded the rating for CSX Corporation (NYSE:CSX) shares to ‘Buy’ from ‘Neutral’, with the price target raised to $37 from $33.

As of Q1 2023, CSX Corporation (NYSE:CSX) was among the favorite freight stocks of hedge funds, with 61 of the 943 hedge funds tracked by Insider Monkey holding its shares valued at $4.0 billion. Soroban Capital Partners was its biggest shareholder with ownership of 52.6 million shares valued at $1.6 billion.

6. Coupang, Inc. (NYSE:CPNG)

Number of Billionaire Holders: 15

Coupang, Inc. (NYSE:CPNG) is a leading ecommerce company based in Seoul, South Korea. It offers a variety of ecommerce related services including same-day and next-morning delivery of groceries and general merchandise, delivery of prepared foods through Coupang Eats, and video streaming through Coupang Play.

On May 9, Coupang, Inc. (NYSE:CPNG) released its financial results for Q1 2023. Its net revenues increased by 13% y-o-y to $5.8 billion, while it generated a net income of $91 million. Following the earnings release, Citi analyst John Yu raised the price target on Coupang, Inc. (NYSE:CPNG) shares to $21 from $19.50.

According to Insider Monkey data on 943 hedge funds, 47 hedge funds held shares of Coupang, Inc. (NYSE:CPNG), valued at $3.3 billion, as of Q1 2023. The largest shareholder was Maverick Capital holding 74 million shares valued at $1.2 billion.

Like other stocks under $50 such as CSX Corporation (NYSE:CSX), The Kraft Heinz Company (NASDAQ:KHC), and Uber Technologies, Inc. (NYSE:UBER), billionaires are also loading up on Coupang, Inc. (NYSE:CPNG) shares.

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