In this article, we discuss 5 stocks to buy according to William Von Mueffling’s Cantillon Capital Management. If you want to read our detailed analysis of Mueffling’s investment philosophy and performance, go directly to 10 Stocks to Buy According to William von Mueffling’s Cantillon Capital Management.
5. Intercontinental Exchange, Inc. (NYSE:ICE)
Cantillon Capital Management’s Stake Value: $523,170,000
Percentage of Cantillon Capital Management’s Portfolio: 3.73%
Number of Hedge Fund Holders: 60
Together with its subsidiaries, Intercontinental Exchange, Inc. (NYSE:ICE) runs regulated exchanges, clearing houses, and listings venues for the commodities, financial, fixed income, and equities markets in the US, UK, EU, Singapore, Israel, and Canada. On July 21, Intercontinental Exchange (NYSE:ICE) acquired climate risk analytics company Urgentem, expanding its service for climate risk.
Securities filings reveal that Cantillon Capital Management inched up its position in Intercontinental Exchange (NYSE:ICE) by 3% during the first quarter of 2022. With a $523.17 million stake, Cantillon Capital Management is the leading shareholder of Intercontinental Exchange, Inc. (NYSE:ICE).
On July 13, Deutsche Bank analyst Brian Bedell maintained a Buy rating on Intercontinental Exchange, Inc. (NYSE:ICE), while trimming his price objective from $117 to $114. The analyst revised his macroeconomic forecasts, price objectives, and assumptions for the broker and asset management group, and he perceived a negative bias.
Out of the 912 hedge funds in the database of Insider Monkey, 60 owned long positions in Intercontinental Exchange, Inc. (NYSE:ICE) at the end of the first quarter of 2022, with a combined value of $2.77 billion.
Here is what Oakmark Funds has to say about Intercontinental Exchange, Inc. (NYSE:ICE) in its Q2 2021 investor letter:
“Intercontinental Exchange is one of the largest and, in our view, most successful financial exchange operators in the world. The company was created through a series of shrewd acquisitions executed by their founder and CEO Jeff Sprecher. Sprecher is one of the more capable CEOs we’ve evaluated, having demonstrated a long history of astute capital allocation and a willingness to act and adapt rapidly to new opportunities and competitive threats. Today, Intercontinental Exchange competes in three primary business segments: exchanges, fixed income/data services and mortgage technology. We believe each of these businesses exhibits attractive economic characteristics and that each should grow earnings well in excess of GDP over the long term. Despite this favorable long-term outlook, the company currently trades at a P/E ratio that is roughly in line with the S&P 500. We believe a business with Intercontinental Exchange’s strong competitive position, excellent management team and attractive growth outlook deserves to trade well above a market multiple. We like buying great businesses at average prices and believe Intercontinental Exchange represents a compelling opportunity to do just that.”
4. Analog Devices, Inc. (NASDAQ:ADI)
Cantillon Capital Management’s Stake Value: $538,597,000
Percentage of Cantillon Capital Management’s Portfolio: 3.84%
Number of Hedge Fund Holders: 67
Analog Devices, Inc. (NASDAQ:ADI) creates, produces, tests, and sells integrated circuits (ICs), software, and subsystems that use mixed-signal, analog, and digital signal processing techniques. Cantillon Capital Management elevated its position in Analog Devices, Inc. (NASDAQ:ADI) by 3% in Q1 2022, holding more than 3.26 million shares equalling $538.60 million. The stock accounted for 3.84% of the fund’s total 13F portfolio.
Given the continuing uncertainty surrounding the semiconductor cycle, Ross Seymore, an analyst at Deutsche Bank, decreased his price objective for Analog Devices, Inc. (NASDAQ:ADI) from $185 to $165 on July 20 and maintained a Hold rating.
67 hedge funds from the Q1 database of Insider Monkey reported bullish bets on Analog Devices, Inc. (NASDAQ:ADI), with combined stakes totalling $4.81 billion. With 3.73 million shares valued at $615.90 million, Egerton Capital Limited is the top shareholder of Analog Devices, Inc. (NASDAQ:ADI).
In its Q3 2021 investor letter, Madison Funds mentioned Analog Devices, Inc. (NASDAQ:ADI). Here is what the fund said:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
3. Broadcom Inc. (NASDAQ:AVGO)
Cantillon Capital Management’s Stake Value: $652,180,000
Percentage of Cantillon Capital Management’s Portfolio: 4.65%
Number of Hedge Fund Holders: 71
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor device designer, developer, and supplier specializing in analog III-V-based products and complicated digital and mixed signal semiconductor devices. Ken Fisher’s Fisher Asset Management held the most significant stake in Broadcom Inc. (NASDAQ:AVGO) at the end of the Q1 2022, valued at $894.78 million.
On July 20, Ross Seymore, an analyst at Deutsche Bank, reduced his price objective for Broadcom Inc. (NASDAQ:AVGO) from $700 to $635 to reflect the semiconductor cycle’s current limbo stage. However, he maintained a Buy rating on the shares.
Cantillon Capital Management held 1.04 million shares of Broadcom Inc. (NASDAQ:AVGO), worth over $652.18 million. This represented 4.65% of its portfolio. The hedge fund’s stake in Broadcom Inc. (NASDAQ:AVGO) stock increased by 3% in Q1 2022.
Of the 900+ hedge funds tracked by Insider Monkey, 71 reported ownership of positions in Broadcom Inc. (NASDAQ:AVGO) at the close of the first quarter, with a collective stake value of $5.49 billion. In contrast, 62 hedge funds owned stakes in Broadcom Inc. (NASDAQ:AVGO) a quarter ago.
Here’s what ClearBridge Investments said about Broadcom Inc. (NYSE:AVGO) in its Q4 2021 investor letter:
“However, ClearBridge portfolio companies are responding by supporting their workforces and showing resilience in adapting and thriving. Semiconductor companies ClearBridge owns and engages with have been successful in advancing vaccinations in their global supply chains. In Malaysia, for example, Broadcom has taken part in PIKAS, a public-private partnership vaccination program focusing on the workforce in critical manufacturing sectors. By the summer of 2021 Broadcom was able to get over 90% of workers in its Penang factory at least one dose of vaccine, and roughly 73% fully vaccinated. Companies in the program also pay the administration cost for vaccinations including cases where the employee is no longer employed by the company before full immunization of the employee.”
2. Alphabet Inc. (NASDAQ:GOOG.A)
Cantillon Capital Management’s Stake Value: $830,542,000
Percentage of Cantillon Capital Management’s Portfolio: 5.93%
Number of Hedge Fund Holders: 205
Alphabet Inc. (NASDAQ:GOOG.A) is an international technology firm. It functions through the categories of Google Services, Google Cloud, and Other Bets. On July 22, Mizuho analyst James Lee maintained a Buy rating while lowering his price objective for Alphabet Inc. (NASDAQ:GOOG) from $175 to $150. He projected Alphabet to be more resilient than competitors, given its extensive advertisement base, which includes offline and services income.
Cantillon Capital Management owned 298,611 shares of Alphabet Inc. (NASDAQ:GOOG.A), worth over $830.54 million, representing 5.93% of its investment portfolio. Cantillon Capital Management increased activity in Alphabet Inc. (NASDAQ:GOOG.A)’s stock by 3% in the first quarter of 2022.
205 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter of 2022, as compared to 209 hedge funds in the previous quarter. Chris Hohn’s TCI Fund Management is Alphabet Inc. (NASDAQ:GOOG.A)’s most significant stakeholder, with 2.37 million shares worth $6.62 billion.
In its Q2 2022 investor letter, Oakmark Funds mentioned Alphabet Inc. (NASDAQ:GOOG.A). Here is what the fund said:
“Alphabet (NASDAQ:GOOG), a global communication services provider, was a top detractor to the Fund’s performance for the quarter. Investors were disappointed by the company’s first-quarter earnings report, though its results were largely in line with analysts’ expectations, including 23% revenue growth to $68 billion and a total operating margin of 30%. Search revenue improved 28% in constant currency, led by retail and the ongoing recovery in travel. Although YouTube’s brand advertising was strong, segment revenue decelerated due to difficult comparable sales and the adverse effects of the Russia/Ukraine war. However, share repurchases for the first quarter amounted to $13.3 billion and were tracking in line with our full-year estimate, and the company authorized an additional $70 billion for buybacks, adding to our confidence in management’s commitment to adding value for its shareholders. While an industry-wide trend of slowing advertising revenues persisted in the second quarter, we believe Alphabet’s total advertising business is still positioned to grow in the mid-teens in 2022 and that the stock remains an attractive holding.”
1. S&P Global Inc. (NYSE:SPGI)
Cantillon Capital Management’s Stake Value: $879,110,000
Percentage of Cantillon Capital Management’s Portfolio: 6.27%
Number of Hedge Fund Holders: 97
S&P Global Inc. (NYSE:SPGI) and its subsidiaries offer credit ratings, benchmarks, analytics, and workflow solutions for the global finance, commodities, and auto markets. Chris Hohn’s TCI Fund Management is the biggest stakeholder of S&P Global Inc. (NYSE:SPGI), boosting its stake in the company by 83% in Q1, holding 6.82 million shares worth almost $2.80 billion.
On July 12, Raymond James analyst Patrick O’Shaughnessy maintained an Outperform rating on the shares while reducing his price objective on S&P Global Inc. (NYSE:SPGI) to $417 from $462. O’Shaughnessy warned investors in a research note that prolonged equities market falls will impact the Indices segment revenue.
S&P Global Inc. (NYSE:SPGI) topped the list of 10 stocks to buy according to William von Mueffling’s Cantillon Capital Management. Mueffling began building his stake in S&P Global Inc. (NYSE:SPGI) back in the second quarter of 2016. After buying 58,703 shares of S&P Global Inc. (NYSE:SPGI) stock in the first quarter of 2022, the hedge fund held 2.14 million shares worth about $879.11 million.
According to Insider Monkey’s database of 912 funds, 97 were long S&P Global Inc. (NYSE:SPGI), with a total stake value of $9.91 billion at the end of the first quarter of 2022, up from 79 funds having stakes equaling $7.83 billion in the last quarter.
Here is what Cooper Investors, an investment firm, had to say about S&P Global Inc. (NYSE:SPGI) in its Q1 2022 investor letter:
“This quarter, S&P Global announced the successful completion of its acquisition of IHS Markit. The deal makes S&P a global leader across the information services industry. The Fund has been long term shareholders of S&P, building a position back in 2015 when the organisation was still named McGraw-Hill Financial. We saw the initial opportunity as it refocused the business from a publishing and financial conglomerate towards its core data and financial assets. S&P’s credit ratings, benchmarks and analytics businesses in global capital and commodity markets carry leading positions, defensible offerings, consistent growth and high margins – as true today as it was seven years ago. With the increased focus management have applied over a lengthy period we see improved revenue growth, margins and cash flows…” (Click here to see the full text)
You can also take a peek at 10 Stocks to Buy According to Carlson Capital and 10 Stocks to Buy According to Stephen DuBois’ Camber Capital Management
