In this article, we will take a look at the five best stocks to buy according to billionaire Howard Marks’ Oaktree Capital. If you want to find out about more stocks and the hedge fund investor, head on over to 10 Best Stocks to Buy Now According to Billionaire Howard Marks’ Oaktree Capital.
5. Garrett Motion Inc. (NASDAQ:GTX)
Oaktree Capital’s Stake Value: $565 million
Percentage of Oaktree Capital’s 13F Portfolio: 6.57%
Number of Hedge Fund Holders: 23
Garrett Motion Inc. (NASDAQ:GTX) is an automotive company that sells products for commercial vehicles. The firm offers turbochargers for gasoline and diesel engines. It is headquartered in Role, Switzerland.
Mr. Marks’ firm held a $565 million stake in Garrett Motion Inc. (NASDAQ:GTX) as part of its Q2 2022 holdings. These came in the form of 68 million shares and represented 6.57% of its investment portfolio. For the same time period, 23 out of the 895 hedge funds polled by Insider Monkey had also invested in the company.
Garrett Motion Inc. (NASDAQ:GTX) is one of the largest players in the global turbocharger industry. This industry is worth $10 billion according to some estimates and it commands a 32% volume of this industry.
Garrett Motion Inc. (NASDAQ:GTX)’s largest investor after Oaktree Capital in our database is Mark T. Gallogly’s Centerbridge Partners which owns 66 million shares that are worth $544 million.
Alluvial Capital Management mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Garrett Motion is an exercise in patience. Just as it seemed the global automotive market was about to recover to pre-COVID production, along came Russia, inflation, and the threat of recession. Still, the company is making great strides in improving and simplifying its balance sheet. In June, the company redeemed the rest of the Series B preferred shares it issued to Honeywell when it exited bankruptcy in 2021. With the Series Bs out of the way, Garrett Motion is free to dedicate its cash flow to continued deleveraging or share buybacks. At some point in the next year or two, the conditions will be met for Garrett Motion to convert these preferreds and simplify their capital structure. If the market stubbornly refuses to value Garrett Motion shares at a reasonable price, I believe the company will pursue a sale or merger. Until then, our preferred shares will continue to accrue dividends at an attractive yield. The preferreds are worth at least $15 today, and possibly $20 or more if the company can reduce leverage and/or buy back shares and the automotive market recovers.”
4. Vistra Corp. (NYSE:VST)
Oaktree Capital’s Stake Value: $580 million
Percentage of Oaktree Capital’s 13F Portfolio: 6.74%
Number of Hedge Fund Holders: 42
Vistra Corp. (NYSE:VST) is an American electricity and natural gas provider that serves customers in 20 states and the District of Columbia. The company has more than four million customers and tens of thousands of megawatts of electricity in its portfolio. It is headquartered in Irving, Texas.
Vistra Corp. (NYSE:VST) has the world’s largest electricity storage facility, which is capable of storing 75 megawatts in Moss Landing, California. Additionally, its free cash flow before growth is slated to touch a high end of $2.57 billion this year and its free cash flow at $1.22 billion. Vistra Corp. (NYSE:VST) also pays an 18 cent dividend for a 3.46% yield.
Oaktree Capital owned 25 million Vistra Corp. (NYSE:VST) shares by the end of this year’s June quarter. This enabled it to hold a $580 million stake in the company. Insider Monkey profiled 895 hedge funds for their holdings covering the same time period to discover that 42 had invested in the company.
After Oaktree Capital, Benjamin A. Smith’s Laurion Capital Management is Vistra Corp. (NYSE:VST)’s largest investor It has a $219 million stake that comes through 9.5 million shares.
3. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Oaktree Capital’s Stake Value: $650 million
Percentage of Oaktree Capital’s 13F Portfolio: 7.55%
Number of Hedge Fund Holders: 18
Star Bulk Carriers Corp. (NASDAQ:SBLK) is a shipping company that is headquartered in Marousi, Greece. The firm ships dry bulk cargo such as iron, grain, fertilizers, and steel products through a fleet of more than one hundred ships.
Mr. Marks’ hedge fund held a $650 million stake in Star Bulk Carriers Corp. (NASDAQ:SBLK) for its Q2 2022 investments. This came in the form of the firm owning 26 million shares of the company. Insider Monkey scanned 895 hedge fund portfolios for this year’s second quarter to find out that 18 had bought the company’s shares.
Star Bulk Carriers Corp. (NASDAQ:SBLK)’s second quarter revenues saw the firm bring in $317 million in operating revenues and a net income of $164 million as it posted strong annual growth in both metrics. Jefferies reduced the company’s share price target to $26 from $30 in September 2022, stating that while coal shipment rates are growing, dry bulk shipments are dropping.
Star Bulk Carriers Corp. (NASDAQ:SBLK)’s second largest investor in our database is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns one million shares that are worth $25 million.
2. TORM plc (NASDAQ:TRMD)
Oaktree Capital’s Stake Value: $727 million
Percentage of Oaktree Capital’s 13F Portfolio: 8.44%
Number of Hedge Fund Holders: 12
TORM plc (NASDAQ:TRMD) is a British shipping company that is responsible for shipping crude and refined oil all over the globe. The firm was set up in 1889, and it is based in London, United Kingdom.
TORM plc (NASDAQ:TRMD)’s second fiscal quarter saw the firm command nearly twice the charter rates that it had posted in the year ago quarter. By Q2 2022 end, the rates were $29,622 and at the end of Q1 2022, they stood at $14,591.
For its second quarter of 2022 investment portfolio, Oaktree Capital held a $727 million stake in TORM plc (NASDAQ:TRMD) which came through the firm holding 53 million shares of the company. Insider Monkey surveyed 895 hedge fund portfolios for their June quarter of 2022 investments to discover that 12 had also held a stake in the company.
Out of these, Jim Simons’ Renaissance Technologies followed Oaktree Capital as TORM plc (NASDAQ:TRMD)’s second largest investor through a $5.9 million stake that came through 438,040 shares.
1. Chesapeake Energy Corporation (NASDAQ:CHK)
Oaktree Capital’s Stake Value: $851 million
Percentage of Oaktree Capital’s 13F Portfolio: 9.89%
Number of Hedge Fund Holders: 67
Chesapeake Energy Corporation (NASDAQ:CHK) is an independent oil and gas exploration company that is headquartered in Oklahoma City, Oklahoma, the United States. The firm has hundreds of millions of barrels of oil equivalent proven reserves.
Mr. Marks’ hedge fund held an $851 million stake in Chesapeake Energy Corporation (NASDAQ:CHK) by the end of 2022’s second quarter. This represented 9.89% of the firm’s investment portfolio. Insider Monkey studied 895 hedge fund holdings for Q2 2022 to discover that 67 had invested in the firm.
Chesapeake Energy Corporation (NASDAQ:CHK)’s second quarter revenues were a breath of fresh air as by posting $1.2 billion in sales the company reversed a $439 million loss it had posted a year back. It also pays a 55 cent dividend for a 2.39% yield. Benchmark set a $137 share price target for the company in August 2022, stating that its return from bankruptcy is not reflected in investment models.
Chesapeake Energy Corporation (NASDAQ:CHK)’s second largest investor in our database is D. E. Shaw’s D E Shaw which owns 4.7 million shares that are worth $385 million.
Disclosure: None. You can also take a look at Best Delivery Stocks To Buy and 10 Best Cheap Technology Stocks To Buy.
