In this article, we discuss 5 stocks to buy according to Peter Simmie’s Bristol Gate Capital. If you want to read our detailed analysis of Simmie’s history and hedge fund performance, go directly to 10 Stocks to Buy According to Peter Simmie’s Bristol Gate Capital.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Bristol Gate Capital Stake Value: $112,284,000
Percentage Bristol Gate Capital’s 13F Portfolio: 5.04%
Number of Hedge Fund Holders: 96
UnitedHealth Group Incorporated (NYSE:UNH) is a health insurance company that provides health benefit plans and services to private and public sector enterprises as well as individuals. The company also deals in Medicare programmes and prescription drug coverage. Rajiv Jain’s GQG Partners is the leading shareholder of UnitedHealth Group Incorporated (NYSE:UNH), with 3.85 million shares worth $1.93 billion.
Whit Mayo, an analyst at SVB Leerink, boosted his price objective on UnitedHealth Group Incorporated (NYSE:UNH) to $550 from $480 on January 26 and maintained an Outperform rating on the stock. The analyst stated that the fourth-quarter results were substantially in line with expectations.
Peter Simmie started building his position in UnitedHealth Group Incorporated (NYSE:UNH) back in Q4 2015. The investment fund also bolstered its position in UnitedHealth Group Incorporated (NYSE:UNH) in the fourth quarter of 2021, by buying 1,286 additional shares. This makes their stake in UnitedHealth Group Incorporated (NYSE:UNH) total 223,611 shares worth $112.28 million.
Third Point Management, in its Q3 2021 investor letter, mentioned UnitedHealth Group Incorporated (NYSE:UNH). Here is what the fund has to say:
“UnitedHealth is one of the largest healthcare companies in the world and a market leader in both its insurance and healthcare services (Optum) businesses. We initiated our position during the 2020 Presidential election at a time of heightened political and regulatory uncertainty.
We believe under its new CEO, Andrew Witty, UnitedHealth can not only preserve its market dominance and sustain industry-leading growth rates across most of its key segments but also enter new healthcare services markets. Witty is known as a mission-driven CEO who clearly articulates his view that providing high-quality, affordable health care services is a social good. He receives consistently high marks from former colleagues, and we believe that his leadership approach will ballast and even strengthen UNH’s already impressive management and employee ranks. The insurance and services businesses are synergistic and complementary, which entrenches United’s critical role in care financing, access, and management. This dynamic gives us confidence in the durability of United’s market leadership…” (Click here to see the full text)
4. Broadcom Inc. (NASDAQ:AVGO)
Bristol Gate Capital Stake Value: $115,688,000
Percentage Bristol Gate Capital’s 13F Portfolio: 5.2%
Number of Hedge Fund Holders: 62
Broadcom Inc. (NASDAQ:AVGO) is a multinational technology firm that develops, manufactures, and sells semiconductors and infrastructure software. In Q4 2021, Bristol Gate Capital held 173,860 Broadcom Inc. (NASDAQ:AVGO) shares, worth $115.69 million, which accounted for 5.2% of the hedge fund’s portfolio.
As a consequence of Broadcom Inc. (NASDAQ:AVGO)’s strong Q4 results, KeyBanc analyst John Vinh boosted his price target to $720 from $710 on March 4 and maintained an Overweight rating on the stock. In addition, on March 3, Broadcom Inc. (NASDAQ:AVGO) declared a quarterly dividend of $4.10 per share, presenting a 14% increase from its prior dividend of $3.60.
At the end of the fourth quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $4.79 billion in Broadcom Inc. (NASDAQ:AVGO), up from 50 the preceding quarter worth $2.71 billion.
Miller Howard Investments, in its third-quarter 2021 investor letter, mentioned Broadcom Inc. (NASDAQ:AVGO). Here is what the fund said:
“Technology remains important in our portfolios, although the sector weights have come down over the past year. We now hold Broadcom (AVGO) of which have strong growth prospects, yet attractive valuations in our view. Unlike many younger tech companies, we believe our holdings should significantly benefit from an upturn in the economy.”
3. The Sherwin-Williams Company (NYSE:SHW)
Bristol Gate Capital Stake Value: $116,279,000
Percentage Bristol Gate Capital’s 13F Portfolio: 5.22%
Number of Hedge Fund Holders: 53
The Sherwin-Williams Company (NYSE:SHW) is a paint and coatings manufacturer and retailer. On February 16, The Sherwin-Williams Company (NYSE:SHW) declared a quarterly dividend of $0.60 per share, an increase of 9% over the $0.55 paid in the same quarter in 2021.
On January 28, Mizuho analyst Christopher Parkinson trimmed his price objective on The Sherwin-Williams Company (NYSE:SHW) to $350 from $353 and reiterated a Buy rating on the shares. The analyst projected that The Sherwin-Williams Company (NYSE:SHW) would have a challenging first quarter but that supply constraints would improve in Q2.
During Q4 2021, Peter Simmie’s Bristol Gate Capital held 330,189 The Sherwin-Williams Company (NYSE:SHW) shares, which were worth $116.28 million and represented 5.22% of its portfolio. Of the 53 hedge funds that were bullish on The Sherwin-Williams Company (NYSE:SHW) according to the fourth quarter database of Insider Monkey, Chilton Investment Company is the leading stakeholder of the company, holding 1.17 million shares worth $412.05 million.
In its Q4 2021 investor letter, Giverny Capital Asset Management mentioned The Sherwin-Williams Company (NYSE:SHW). Here is what the fund said:
“Our fourth-largest holding at year-end was Charles Schwab. Schwab shares rose 60%, buoyed by twin tailwinds of asset growth and the prospect of rising interest rates. Schwab is an exceptional business – it has grown new brokerage accounts at a steady 5%-6% clip for many years, and even faster recently. It has won the trust of retail investors – it’s hard to overstate how important trust is in financial services – but also offers financial advisers a low-cost custodial solution that has helped it win large chunks of business from legacy players like Merrill Lynch or Morgan Stanley. Schwab earns the bulk of its profit on interest rate spreads, or the difference between what it earns on cash deposits held in customers’ brokerage and bank accounts and what it pays to the owners of those accounts. As interest rates rise, so Schwab’s earnings. We’re happy about that, but we see Schwab continuing to grow brokerage accounts for years to come.”
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Bristol Gate Capital Stake Value: $118,003,000
Percentage Bristol Gate Capital’s 13F Portfolio: 5.3%
Number of Hedge Fund Holders: 95
Thermo Fisher Scientific Inc. (NYSE:TMO) is a company that makes analytical instruments, equipment, software, and diagnostics for research, reagents and consumables, analysis, and discovery. Among the hedge funds tracked by Insider Monkey in Q4 2021, 95 funds were bullish on Thermo Fisher Scientific Inc. (NYSE:TMO), up from 94 funds in the preceding quarter.
On February 3, Wells Fargo analyst Dan Leonard reduced his price target on Thermo Fisher Scientific Inc. (NYSE:TMO) to $605 from $700 and kept an Equal Weight rating on the shares after quarterly results. Post-pandemic expectations, according to the expert, were unrealistically high.
Ken Fisher’s Fisher Asset Management held the biggest stake in Thermo Fisher Scientific Inc. (NYSE:TMO) in the fourth quarter of 2021, with 2.15 million shares worth $1.44 billion. Thermo Fisher Scientific Inc. (NYSE:TMO) accounts for about 5.3% of Bristol Gate Capital’s portfolio, as the hedge fund owns a $118 million stake in the company.
In its third quarter 2021 investor letter, Baron Funds mentioned Thermo Fisher Scientific Inc. (NYSE:TMO). Here is what the fund said:
“We added to our position in Thermo Fisher Scientific Inc., a leading provider of life sciences tools & services. Thermo Fisher is a well-managed business with secular tailwinds in attractive life sciences end markets. At the company’s annual investor day, management provided long-term financial targets consisting of 7% to 9% core organic revenue growth and mid-teens annual earnings and free cash flow growth. We continue to like Thermo Fisher as a long-term earnings compounder.”
1. Zoetis Inc. (NYSE:ZTS)
Bristol Gate Capital Stake Value: $121,368,000
Percentage Bristol Gate Capital’s 13F Portfolio: 5.45%
Number of Hedge Fund Holders: 61
Zoetis Inc. (NYSE:ZTS) develops, manufactures, and sells pharmaceuticals, vaccinations, biodevices, diagnostic items, genetic testing, and precision livestock farming technologies. On December 20, Citi analyst Navann Ty raised his price target on Zoetis Inc. (NYSE:ZTS) to $232 from $184 and maintained a Neutral rating on the shares.
Bristol Gate Capital owns approximately 497,349 Zoetis Inc. (NYSE:ZTS) shares as of Q4 2021, worth $121.37 million, representing 5.45% of the total 13F securities. The hedge fund has slashed its stake in the firm by 7%, although it still remains the fund’s largest holding.
Overall, hedge funds are loading up on Zoetis Inc. (NYSE:ZTS), as 61 out of the 924 funds tracked by Insider Monkey held stakes in the company at the end of December 2021, up from 58 funds a quarter earlier.
In its third quarter 2021 investor letter Polen Capital, an investment management firm, mentioned Zoetis Inc. (NYSE:ZTS). Here is what the fund said:
“Finally, exiting our position in Zoetis was purely a function of valuation. With the business trading for up to 45x forward earnings, we felt we had more attractive alternatives. We maintain high conviction in the company and their competitive advantages and hope to be owners again, at a more attractive valuation. In short, we sold what we believe to be very a high-quality business at relatively high valuations to fund the purchase of equally high-quality businesses trading at lower valuations and even better long-term earnings growth prospects. While we are certainly not tactical in approach, we do aim to make prudent adjustments over time.”
You can also take a peek at 10 Stocks to Buy Now According to Jeffrey Gates’ Gates Capital and 10 Stocks to Invest in Now According to Anthony Bozza’s Lakewood Capital.
