In this article, we will be discussing 8 best stocks to buy according to billionaire Nicholas J. Pritzker based on his hedge fund’s Q1 portfolio. To skip our detailed analysis of Nicholas J. Pritzker’s hedge fund returns, investment philosophy, and history, you can click to skip ahead to 4 Best Stocks to Buy According to Billionaire Nicholas J. Pritzker.
Billionaire Nicholas Pritzker is known for his investments in renewable energy, technology and transportation, healthcare, and sustainable food and agriculture. Rather than building a well-diversified portfolio, his hedge fund, Tao Capital, focuses on a limited number of stocks. Tao Capital was an early investor in e-cigarette maker Juul and synthetic DNA developer Twist Biosciences.
After graduating from Lake Forest College in Illinois and earning a law degree from the University of Chicago in 1974, Nicholas Pritzker joined the family firm. Later in 1984, he became the Divisional Vice President of the family firm. Nicholas Pritzker is a cousin of Jay Pritzker, who founded the Hyatt hotel business. Pritzker led Hyatt’s new hotel development initiatives for several years; however, he subsequently sold most of his Hyatt ownership. Billionaire Nicholas Pritzker was vice-chairman of the Hyatt Hotels board of directors until resigning in 2009 to pursue entrepreneurial endeavors.
In the first quarter, the 75-year-old billionaire venture investor added two new positions and cut interests in his top four holdings. As a result, the hedge fund’s 13F portfolio is valued at approximately $346.29 million as of the end of the first quarter of 2021.
As of the end of the first quarter, some notable stock picks of Nicholas J. Pritzker’s portfolio include Twist Bioscience Corporation (NASDAQ: TWST), Uber Technologies, Inc. (NYSE: UBER), and Tesla, Inc. (NASDAQ: TSLA)
A notable company in Nicholas J. Pritzker’s portfolio is Twist Bioscience Corporation (NASDAQ: TWST), a synthetic biology firm developing and distributing synthetic DNA-based products. On August 6, the company declared earnings for the third quarter of 2021. It reported earnings per share of -$0.82, missing market predictions by $0.07. Nevertheless, the revenue for the first three months of 2021 was over $35 million, up 65.1% YoY, beating the estimates by $2.59 million.
Another notable stock in Nicholas J. Pritzker’s portfolio is Uber Technologies, Inc. (NYSE: UBER). The investor owns a $68.79 million stake in the company. On August 5, Wedbush analyst Ygal Arounian lowered the price target on Uber to $51 from $66 and maintained an “Outperform” rating on the shares. On August 4, Uber Technologies, Inc. (NYSE: UBER) released its second-quarter 2021 earnings. It earned $0.58 per share, which was $1.11 above the market forecasts. The revenue was $3.93 billion, up 75.4% YoY, beating the expectations by $170 million.
Based on the latest 13F holdings for the first quarter of 2021, Tao Capital owns 57,500 shares in Tesla, Inc. (NASDAQ: TSLA) after cutting its holding in the company by 56% from the previous quarter. On August 3, Piper Sandler analyst Alexander Potter reiterated an “Overweight” rating on Tesla, Inc. (NASDAQ: TSLA) with a price target of $1,200. On July 26, Tesla, Inc. (NASDAQ: TSLA) reported earnings for the second quarter of 2021. It recorded earnings per share of $1.45, surpassing market expectations by $0.47. In addition, the second quarter of 2021 brought in revenue of $11.96 billion, exceeding the estimates by $560 million.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of 8 best stocks to buy according to billionaire Nicholas J. Pritzker. We used Pritzker’s 13F portfolio for the first quarter for this analysis.
Best Stocks to Buy According to Billionaire Nicholas J. Pritzker
8. Denali Therapeutics Inc. (NASDAQ: DNLI)
Pritzker’s Stake Value: $348,000
Percentage of Nicholas J. Pritzker’s 13F Portfolio: 0.1%
Number of Hedge Fund Holders: 26
Denali Therapeutics Inc. (NASDAQ: DNLI) is an American biopharmaceutical company, which identifies and develops candidates for neurodegenerative illnesses. It was incorporated in 2013 and ranks eighth on the list of 8 best stocks to buy according to billionaire Nicholas J. Pritzker. Denali shares have gained about 64.66% over the last 12 months.
On August 4, Denali Therapeutics Inc. (NASDAQ: DNLI) posted earnings for the second quarter of 2021. It declared earnings per share of -$0.50, missing market predictions by $0.11. In addition, the revenue over the period was $22.94 million, 292.1% YoY, missing the estimates by $4.98 million. On July 26, H.C. Wainwright analyst Andrew Fein raised the price target on Denali Therapeutics Inc. (NASDAQ: DNLI) to $105 from $95 and kept a “Buy” rating on the shares.
Tao Capital holds 6,086 shares in Denali Therapeutics Inc. (NASDAQ: DNLI), worth over $348 thousand. Eli Casdin’s Casdin Capital is the company’s most significant stakeholder, with 1.61 million shares worth $91.93 million. Like Twist Bioscience Corporation (NASDAQ: TWST), Uber Technologies, Inc. (NYSE: UBER) and, Tesla, Inc. (NASDAQ: TSLA), Denali Therapeutics Inc. (NASDAQ: DNLI) is a notable stock in Nicholas J. Pritzker Q1 portfolio.
Baron Funds, in its first-quarter 2021 investor letter, mentioned Denali Therapeutics Inc. (NASDAQ: DNLI). Here is what the fund said:
“Denali Therapeutics Inc. is a biotechnology company developing therapies for neurodegeneration, including both targeted drugs and delivery systems for crossing the blood/brain barrier. Shares fell in concert with the broader market rotation from growth to value that resulted in significant weakness in biotechnology stocks. From a fundamentals perspective, Denali reported incrementally positive updates from its Hunter Syndrome program in the quarter, although this development was more impactful in the prior quarter when initial data was released.”
7. Hyatt Hotels Corporation (NYSE: H)
Pritzker’s Stake Value: $5,789,000
Percentage of Nicholas J. Pritzker’s 13F Portfolio: 1.67%
Number of Hedge Fund Holders: 23
Hyatt Hotels Corporation (NYSE: H) operates as a hospitality company globally. The company was founded in 1957 and stands seventh on the list of 8 best stocks to buy according to billionaire Nicholas J. Pritzker. Hyatt Hotels was able to deliver a 47.62% return in the past 12 months.
On August 3, Hyatt Hotels Corporation (NYSE: H) posted earnings for the second quarter of 2021. The company declared earnings per share of -$1.15, missing the estimates by $0.30. However, adjusted EBITDA grew to $55 million in the second quarter of 2020, compared to the second quarter of 2019. On June 4, Berenberg analyst Stuart Gordon raised the price target on Hyatt Hotels Corporation (NYSE: H) to $60 from $55 but maintained a “Sell” rating on the shares.
Tao Capital owns 70,000 shares in Hyatt Hotels Corporation (NYSE: H) worth over $5 million, representing 1.67% of their portfolio. Out of the hedge funds being tracked by Insider Monkey, Royce & Associates is a leading shareholder in Hyatt, with 87,760 shares worth more than $6 million.
Like Twist Bioscience Corporation (NASDAQ: TWST), Uber Technologies, Inc. (NYSE: UBER) and, Tesla, Inc. (NASDAQ: TSLA), Hyatt Hotels Corporation (NYSE: H) is a notable stock in Nicholas J. Pritzker Q1 portfolio.
6. Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL)
Pritzker’s Stake Value: $6,012,000
Percentage of Nicholas J. Pritzker’s 13F Portfolio: 1.73%
Number of Hedge Fund Holders: 17
Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL) is a clinical-stage biopharmaceutical company. It was incorporated in 2011 and is ranked sixth on the list of 8 best stocks to buy according to billionaire Nicholas J. Pritzker. The company currently has a market capitalization of $1.47 billion.
On August 6, BMO Capital analyst Matthew Luchini upgraded Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL) from “Market Perform” to “Outperform” with a price target of $111. On August 5, Madrigal Pharmaceuticals announced earnings for the second quarter of 2021. It posted earnings per of -$3.72, missing the estimates by $0.14. Madrigal had $323.8 million in cash, cash equivalents, and marketable securities on June 30, 2021, up from $284.1 million on December 31, 2020.
Tao Capital holds 51,396 shares in Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL), worth over $6 million, representing 1.73% of their portfolio. As of the end of the first quarter, 17 hedge funds in Insider Monkey’s database of 866 funds held stakes in Madrigal compared to 15 funds in the quarter earlier. Like Twist Bioscience Corporation (NASDAQ: TWST), Uber Technologies, Inc. (NYSE: UBER) and, Tesla, Inc. (NASDAQ: TSLA), Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL) is a notable stock in Nicholas J. Pritzker’s Q1 portfolio.
5. 908 Devices Inc. (NASDAQ: MASS)
Pritzker’s Stake Value: $28,641,000
Percentage of Nicholas J. Pritzker’s 13F Portfolio: 8.27%
Number of Hedge Fund Holders: 14
908 Devices Inc. (NASDAQ: MASS) manufactures and sells measurement devices for chemical and biochemical analysis. It was incorporated in 2012 and is placed fifth on the list of 8 best stocks to buy according to billionaire Nicholas J. Pritzker. 908 Devices currently has a $937.58 million market capitalization.
On August 4, 908 Devices Inc. (NASDAQ: MASS) made public its earnings for the second quarter of 2021. It posted earnings per share of -$0.27, missing estimates by $0.04. However, the revenue over the period was $8.27 million, beating the estimates by $1.12 million. Earlier in May, Bio-Techne Corporation (NASDAQ: TECH) and 908 Devices (MASS) established a joint agreement to produce a protein characterization extended workflow solution. Protein characterization and CE-SDS and absorbance and native fluorescence icIEF detection save time in development and reduce time to commercialization.
Tao Capital holds 590,519 shares in 908 Devices Inc. (NASDAQ: MASS) worth over $28 million, representing 8.27% of their portfolio. The hedge fund has trimmed stakes in the firm by 18% in the past few months. Like Twist Bioscience Corporation (NASDAQ: TWST), Uber Technologies, Inc. (NYSE: UBER) and Tesla, Inc. (NASDAQ: TSLA), 908 Devices Inc. (NASDAQ: MASS) is a notable stock in Nicholas J. Pritzker’s Q1 portfolio.
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Disclosure: None. 8 Best Stocks to Buy According to Billionaire Nicholas J. Pritzker is originally published on Insider Monkey.
