In this article, we discuss the 10 value stocks to buy according to billionaire Paul Tudor Jones. If you want to skip our detailed analysis of these stocks, go directly to the 5 Value Stocks to Buy According to Billionaire Paul Tudor Jones.
Paul Tudor Jones leads Tudor Investment Corp, a hedge fund based in Boston with a portfolio value of more than $6 billion at the end of September 2021. Some of the top stocks in the portfolio included Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Airbnb, Inc. (NASDAQ:ABNB), among others discussed in detail below. Latest data shows that the fund made new purchases in 1,443 stocks, additional purchases in 429, sold out of 594, and reduced holdings in 442 equities during the third quarter, increasing the portfolio value by $1 billion in this period.
Tudor Investment Corp has grown under the able leadership of Jones as the investor reaps handsome returns on currency and interest rate bets. Jones has grown his personal net worth to around $7 billion by building a portfolio of value-heavy stocks. In the inflationary market, these stocks are outperforming their growth counterparts and Jones thinks that this inflation is “here to stay”. Investors who want further exposure to the investment philosophy of the billionaire in the present market conditions should check out some of his top value picks.
Our Methodology
The companies listed below were taken from the investment portfolio of Tudor Investment Corp at the end of the third quarter of 2021. Those that have a Price-to-Earnings (PE) ratio of around 15 were preferred for the list.
Value Stocks to Buy According to Billionaire Paul Tudor Jones
10. American Electric Power Company, Inc. (NASDAQ:AEP)
Stake Value of Tudor Investment Corp : $10.7 million
Number of Hedge Fund Holders: 36
PE Ratio: 18.30
The International Energy Agency estimates that the renewable power generating capacity across the globe, supported by strong policy and ambitious climate targets, will jump 60% by 2026, when compared to 2020 levels, to reach 4,800 GW. American Electric Power Company, Inc. (NASDAQ:AEP), one of the oldest and most trustworthy electric power utility holding companies, plans to contribute to this shift towards cleaner energy by investing $38 billion over the next five years with an emphasis on transmission, distribution and renewable energy.
American Electric Power Company, Inc. (NASDAQ:AEP) recently issued earnings guidance for the next fiscal year in line with market expectations, saying it was transitioning to a more “balanced portfolio” to grow the share of renewables in power generation to almost half of the total capacity of the firm by 2030.
The solid fundamentals and promising future plans of American Electric Power Company, Inc. (NASDAQ:AEP) have attracted the attention of hedge funds. Between June and September, 36 hedge funds in the Insider Monkey database held stakes worth $751 million in American Electric Power Company, Inc. (NASDAQ:AEP). In the previous quarter, 29 funds had held stakes worth $726 million in American Electric Power Company, Inc. (NASDAQ:AEP).
Renaissance Technologies, the Jim Simons-led quant hedge fund based in New York, is one of the most prominent names on this list. At the end of the third quarter of 2021, the fund owned 2.3 million shares of American Electric Power Company, Inc. (NASDAQ:AEP) worth more than $189 million.
Along with Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Airbnb, Inc. (NASDAQ:ABNB), American Electric Power Company, Inc. (NASDAQ:AEP) is one of the stocks on the radar of hedge funds.
9. Discovery, Inc. (NASDAQ:DISCA)
Stake Value of Tudor Investment Corp : $25 million
Number of Hedge Fund Holders: 42
PE Ratio: 16.23
Discovery, Inc. (NASDAQ:DISCA) has been providing media content to consumers across the globe for many decades. It owns and runs a host of television channels, production studios, and websites. In the past few years, Discovery, Inc. (NASDAQ:DISCA), already one of the most recognizable brand names across the globe with an ardent fan base, has stepped up investments in digital products. A blockbuster merger with WarnerMedia is set to further improve free cash flows for the company.
Investment bank Citi sees Discovery, Inc. (NASDAQ:DISCA) shares doubling in value over the next few months. Analyst Jason Bazinet claims the merger with WarnerMedia would help Discovery, Inc. (NASDAQ:DISCA) compete with streaming giants like Netflix and Disney as revenues grow to $53 billion by 2024.
The positive momentum around Discovery, Inc. (NASDAQ:DISCA) is reflected in hedge fund activity around the firm. At the end of September, 42 hedge funds, out of 867 tracked by Insider Monkey were long Discovery, Inc. (NASDAQ:DISCA). These funds held stakes worth $515 million in the media company. New York-based investment firm DE Shaw was a leading shareholder with 4.2 million shares worth more than $103 million.
In its Q1 2021 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Discovery, Inc. (NASDAQ:DISCA) was one of them. Here is what the fund said:
“We also sold most of our holdings in Discovery, Inc. (NASDAQ:DISCA) as the stock price continued to increase to new highs. However, in late March the stock declined considerably when brokers liquidated holdings by Archegos Capital (see above in General Commentary) to satisfy margin calls. That brought the stock price down to levels that we found attractive, and we bought back a significant amount of the shares that we had sold earlier that month.”
8. Target Corporation (NYSE:TGT)
Stake Value of Tudor Investment Corp : $4.2 million
Number of Hedge Fund Holders: 49
PE Ratio: 16.13
Target Corporation (NYSE:TGT) is a general merchandise retailer that has faced stiff competition from the rise of e-commerce giants in recent years. However, there are plenty of long-term tailwinds for the firm that are still attracting the attention of elite investors. The core business remains strong, there is continuing grocery market share and new unit growth, and the company is improving the digital side of the business to keep pace with consumer preferences. Target Corporation (NYSE:TGT) recently topped market expectations on earnings for the third quarter despite supply chain bottlenecks and inflationary pressures.
Brian Cornell, the CEO of Target Corporation (NYSE:TGT), told news platform CNBC last month that Target Corporation (NYSE:TGT) expected a strong holiday season that would focus on providing “value” to customers despite rising costs. Cornell underlined that this was part of a larger strategy to differentiate the company among peers that were shifting rising costs to customers.
Just like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Airbnb, Inc. (NASDAQ:ABNB), Target Corporation (NYSE:TGT) is a notable stock in Jones’ portfolio.
GQG Partners, a Florida-based investment firm, is a leading shareholder in Target Corporation (NYSE:TGT) with 5.5 million shares worth more than $1.2 billion. The fund bought a new stake in Target Corporation (NYSE:TGT) in the first quarter of 2021 and added to it significantly in the second quarter, before trimming this position by about 6% in the third. Of the 867 funds tracked by Insider Monkey, 49 own a stake in the general retailer. The combined worth of these stakes is $4.3 billion.
7. Qorvo, Inc. (NASDAQ:QRVO)
Stake Value of Tudor Investment Corp : $4.4 million
Number of Hedge Fund Holders: 44
PE Ratio: 15.10
Qorvo, Inc. (NASDAQ:QRVO) is among a host of chip stocks that have enjoyed significant attention from elite hedge funds this year. 44 funds were bullish on the stock at the end of the third quarter of 2021 with stakes worth $1.9 billion in the company. Compared to the second quarter, this represented an increase of 4 funds with bullish views quarter-over-quarter. Select Equity Group was a leading shareholder with 1.2 million shares worth more than $203 million.
Considering the growth catalysts for Qorvo, Inc. (NASDAQ:QRVO), it seems like the stock is trading at a relatively cheap price compared to other chip makers. Qorvo, Inc. (NASDAQ:QRVO) recently began sampling Wi-Fi 6 iFEMs with an integrated BAW filter, a unique product that enables higher capacity and offers improved efficiency. Qorvo, Inc. (NASDAQ:QRVO) already has contracts with leading smartphone manufacturers that are interested in integrating the chipset onto their phones.
6. MDU Resources Group, Inc. (NYSE:MDU)
Stake Value of Tudor Investment Corp : $4.4 million
Number of Hedge Fund Holders: 20
PE Ratio: 14.40
MDU Resources Group, Inc. (NYSE:MDU) is one of the top value stocks that has endured multiple market highs and lows, managing to maintain a clean balance sheet, an impressive dividend. The company has 18 consecutive years of dividend growth and nearly three decades of uninterrupted payouts.
Recently, MDU Resources Group, Inc. (NYSE:MDU) raised the quarterly dividend by 2.4% to $0.2175 per share. Although it is a utilities company by core business, the company generates a significant amount of revenue from the construction sector. As such, there is more potential for upside in the shares as infrastructure spending increases in the US in the coming months.
The hedge fund sentiment around MDU Resources Group, Inc. (NYSE:MDU) is also positive overall. At the end of September, 20 funds had stakes in MDU Resources Group, Inc. (NYSE:MDU) worth $141 million. AQR Capital Management, a Connecticut-based investment firm, was a leading shareholder with 1.6 million shares worth more than $48 million. MDU Resources Group, Inc. (NYSE:MDU) is a long-term holding of AQR, with the fund first buying shares in the firm in the fourth quarter of 2010.
Just like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Airbnb, Inc. (NASDAQ:ABNB), MDU Resources Group, Inc. (NYSE:MDU) is one of the stocks that elite investors are buying.
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Disclosure. None. 10 Value Stocks to Buy According to Billionaire Paul Tudor Jones is originally published on Insider Monkey.
