Below we present the list of 5 Stocks Billionaire Tiger Cub Rob Citrone is Buying. For our methodology and a more comprehensive list of the billionaire’s favorite stocks right now, please see 10 Stocks Billionaire Tiger Cub Rob Citrone is Buying.
5. Visa Inc. (NYSE:V)
Value of Discovery Capital Management‘s 13F Position: $8.04 million
Number of Hedge Fund Shareholders: 163
Rob Citrone’s Discovery Capital Management built a new stake in Visa Inc. (NYSE:V) during Q1, buying 36,233 shares. Given its attractiveness as a long-term investment, which is characterized by its inclusion in the 13F portfolio of legendary value investor Warren Buffett, it’s not surprising that Visa has suffered very little volatility in terms of hedge fund ownership throughout the pandemic. The company consistently ranks near the top of our list of the 30 Most Popular Stocks Among Hedge Funds: 2022 Q1 Rankings.
Visa Inc. (NYSE:V) shares are down by 9% this year after having undergone several notable rises and falls. Investors seem to be unsure what to make of the company’s prospects given the economic uncertainty. A possible recession and declining consumer confidence may not bode well for the financial services company. On the other hand, Visa is growing at a strong rate, boosting revenue by 25% year-over-year in the company’s fiscal Q2, while its non-GAAP earnings shot up by 30%. Analysts don’t see that trend slowing down much over the next five years either, predicting 18% annual growth.
The Polen Global Growth Fund believes that with profitable cross-border transactions set to rebound, Visa Inc. (NYSE:V) should be a good investment in the long run, discussing the company in its Q1 2022 investor letter:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
4. Enphase Energy, Inc. (NASDAQ:ENPH)
Value of Discovery Capital Management‘s 13F Position: $10.4 million
Number of Hedge Fund Shareholders: 57
Enphase Energy, Inc. (NASDAQ:ENPH) hit an all-time high in terms of its ownership among hedge funds during Q1, with the home energy supplier being found in the 13F portfolios of 57 money managers. One of them was Rob Citrone’s Discovery, which bought 51,500 shares of ENPH to take a new stake in the company.
Shares of Enphase Energy, Inc. (NASDAQ:ENPH), which sells micro inverter systems to the solar industry, have been on a ridiculous tear since the end of 2018, gaining 3,933%, which has pushed the company’s P/E ratio to a sizzling 168x. Enphase has grown its revenue more than four-fold during that period, to $1.38 billion in 2021, while its gross income has surged more than five-fold to $554 million and EBITDA 15-fold to $247 million. The company also appears to have a regulatory step up on some other industry players, as new safety and compliance standards in Australia have prompted more solar installers to switch to Enphase products.
In its Q1 2022 investor letter, asset management firm Clearbridge Investments discussed some of the challenges that Enphase Energy, Inc. (NASDAQ:ENPH) has faced in the near-term, even as the company has solidified its long-term value. Here is what the fund said:
“Enphase Energy, Inc. (NASDAQ:ENPH) is a key solar holding that should be able to take advantage of greater incentives for solar installations in many geographies. The company was also a strong contributor for the quarter, overcoming pressures of a higher discount rate on their strong projected future earnings, raw material inflation and supply chain challenges as their long-term value was reaffirmed.”
3. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Value of Discovery Capital Management‘s 13F Position: $12.5 million
Number of Hedge Fund Shareholders: 28
Rob Citrone appears to have made another bet on green energy during Q1, this time in the form of lithium miner Sociedad Química y Minera de Chile S.A. (NYSE:SQM). Discovery Capital bought 146,600 shares of SQM during the first quarter, shares which have gained an impressive 67% year-to-date. Just eight hedge funds were long SQM less than three years ago, a figure that has since jumped to 28.
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is well positioned to take advantage of skyrocketing lithium prices, which are off their record highs of April by about 20% but are still trading more than 6x higher now than they were the start of the year, at $62,000 per metric tonne. The majority of the company’s 2022 volumes are exposed to either spot prices or monthly benchmarks.
Sociedad Química y Minera de Chile S.A. (NYSE:SQM) has also teased the possibility of expanding its lithium capacity, which could further entice hedge funds and other investors. The only near-term concern for the company may be the lockdowns in China, which could have an impact on its Q2 volumes. 42% of SQM’s lithium shipments during the 12-month period ended October 31, 2020 went to China.
2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Value of Discovery Capital Management‘s 13F Position: $15.7 million
Number of Hedge Fund Shareholders: 83
Discovery Capital added a new stake of 150,480 shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) to its 13F portfolio during Q1, being one of several hedge funds to go long the chipmaker during the quarter. Hedge fund ownership of TSM hit an all-time high during Q1 and is up by 24% over the past three quarters.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) shares are down by 41% this year but got a boost on July 7 when rival Samsung reported better than expected results that were heavily boosted by its chip sales. That proved to be a sigh of relief for chip companies and their investors, who just a week earlier were hit with weak forward guidance from Micron Technology (NASDAQ:MU), which cited weakening consumer demand.
The Baron New Asia Fund believes Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) will not only meet, but exceed its 15 to 20% revenue growth targets for the coming years, saying this about the company in its Q1 2022 investor letter:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Ltd. detracted in the first quarter due to rising geopolitical tensions, macroeconomic uncertainties, and concerns over softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver above its 15% to 20% revenue growth target over the next several years.”
1. T-Mobile US, Inc. (NYSE:TMUS)
Value of Discovery Capital Management‘s 13F Position: $49.4 million
Number of Hedge Fund Shareholders: 92
Closing out the list of Rob Citrone’s newest stock purchases is T-Mobile US, Inc. (NYSE:TMUS), which was far and away his biggest new purchase of Q1. Discovery Capital bought 384,809 shares of TMUS during the quarter, with the new position ranking as the fund’s fifth-largest 13F long position as of March 31. Tiger Cubs Andreas Halvorsen (Viking Global) and Daniel Sundheim (D1 Capital Partners) have two of the three largest stakes in TMUS among the select group of funds tracked by our database.
T-Mobile US, Inc. (NYSE:TMUS) grew its customer base to 109.5 million in the first quarter, adding 1.4 million customers from a year earlier. While rivals AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have both hiked prices this year in the face of rising inflation, T-Mobile has said that it won’t, which is helping to drive customer acquisition. Once they’re in the fold, T-Mobile can attempt to drive revenue growth by enticing customers to adopt additional services. T-Mobile’s services revenue rose to $15.1 billion in Q1.
T-Mobile US, Inc. (NYSE:TMUS) is also becoming a more attractive carrier thanks to the breadth of its standalone 5G network, which has expanded to reach 315 million people in the U.S, while its ultra-capacity 5G now reaches 225 million people, with plans to push that to 300 million by the end of 2022.
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out Top 10 Stock Picks of Alec Litowitz and Ross Laser’s Magnetar Capital and Top 10 Stock Picks of Martin Whitman’s Third Avenue Management.
Disclosure: None.
