In this article, we discuss Aquamarine Capital’s top 5 stock picks. To take a look at a more extensive list of stocks and learn more about the fund, head over to Aquamarine Capital’s Top 10 Stock Picks.
5. Micron Technology, Inc. (NASDAQ:MU)
Aquamarine’s Stake Value’s Stake Value: $17.64 million
Number of shares: 200,000
Number of Hedge Fund Holders: 100
Computer memory and computer data storage producer Micron Technology, Inc. (NASDAQ:MU) ranks fifth among Aquamarine Capital’s 13F holdings. The fund added the stock to its portfolio during the third quarter of 2019. Micron Technology, Inc. (NASDAQ:MU) is one of the few tech stocks that Guy Spier is bullish on, the other two being Alphabet Inc (NASDAQ:GOOGL) and Twitter Inc (NASDAQ:TWTR), which rank on the last two spots in Aquamarine’s last 13F filing.
Micron Technology, Inc. (NASDAQ:MU)’s shares have surged by more than 60% in the past 12 months. Our analysis shows that Micron Technology ranks 19th in our list of the 30 Most Popular Stocks Among Hedge Funds. Aside from Aquamarine, Arrowstreet Capital is another one of the 98 hedge funds tracked by Insider Monkey with stakes in Micron Technology, Inc. (NASDAQ:MU) as of the end of the first quarter.
In its investor letter for the first quarter of 2021, Bonsai Partners highlighted a few stocks, including Micron Technology Inc (NASDAQ:MU) is one of them:
“With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.
While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.
The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”
4. Mastercard Inc (NYSE:MA)
Aquamarine’s Stake Value: $23.41 million
Number of shares: 65,750
Number of Hedge Fund Holders: 151
New York-based Mastercard Inc (NYSE:MA) has been part of Aquamarine’s stock holdings since 2014. The bet has paid off significantly, as the stock is up by more than 300% over the last five years alone. Overall, hedge funds are bullish on Mastercard Inc (NYSE:MA), the stock ranking seventh in the list of Most Popular Stocks Among Hedge Funds. At the end of 2021, there were 151 funds holding $17.08 billion worth of Mastercard Inc (NYSE:MA) shares, compared to 154 funds and $17.98 billion a quarter earlier.
Akre Capital Management is another fund with a stake in Mastercard Inc (NYSE:MA). It currently owns 5.9 million shares worth $2.09 billion.
3. American Express Company (NYSE:AXP)
Aquamarine’s Stake Value: $29.70 million
Number of shares: 210,000
Number of Hedge Fund Holders: 53
Guy Spier’s hedge fund first disclosed a position in American Express Company (NYSE:AXP) in 2014, seeing his investment nearly triple over the last five years. Aside from Aquamarine, 52 other hedge funds tracked by Insider Monkey reported owning stakes in American Express Company (NYSE:AXP) at the end of March, down by eight funds over the quarter.
American Express Company (NYSE:AXP) was mentioned in the fourth-quarter 2020 investor letter of Bretton Fund:
“American Express has elements of both a bank (it extends credit card loans) and a payments processor (most of its revenue is fees from cardholders and merchants) and was hit pretty hard by Covid-19, though we expect most of the impact will be transitory. It has a relatively diversified customer base overall, but a meaningful portion of its card activity is from business travel, which…there wasn’t a lot of last year. Similar to the banks, American Express recognized loan losses in anticipation of large defaults, though it’s not clear all of that will come to pass. Its stock returned -1.1%, while earnings per share were down 53%.”
2. Bank of America Corporation (NYSE:BAC)
Aquamarine’s Stake Value: $29.71 million
Number of shares: 767,845
Number of Hedge Fund Holders: 97
The latest returns of Bank of America Corporation (NYSE:BAC) are supported by stronger-than-expected financial results, the bank reporting first quarter EPS of $0.86 and revenue of $22.82 billion, beating the consensus estimates by $0.21 and $960 million, respectively.
As of the end of the first quarter, there are 97 hedge funds tracked by Insider Monkey that hold a position in BAC compared to 99 funds three months earlier. The biggest stakeholder of the company is Berkshire Hathaway, with 1.01 billion shares worth $39.08 billion as of the end of March.
Another investor bullish on Bank of America Corporation (NYSE:BAC) is ClearBridge Investments. In its first-quarter investor letter, the fund mentioned Bank of America Corporation (NYSE:BAC):
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk-taking, a leading consumer deposit franchise, scale, and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments, and support of communities in which it operates. In the first quarter, Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
1. Berkshire Hathaway Inc. (NYSE:BRK.B)
Aquamarine’s Stake Value: $35.92 million
Number of Shares: 140,600
Number of Hedge Fund Holders: 111
Berkshire Hathaway Inc. (NYSE:BRK.B) tops the list of Aquamarine Capital’s top 10 stock picks. The multinational conglomerate holding company continues gaining Guy Spier’s conviction as the holds 140,600 shares of Berkshire Hathaway Inc. (NYSE:BRK.B) valued at $35.92 million. Berkshire Hathaway Inc. (NYSE:BRK.B)’s stock delivered a 52.48% return in the past 12-months.
With a $1.2 billion stake in , Eagle Capital Management owns 4.7 million shares of Berkshire Hathaway Inc. (NYSE:BRK.B) worth $1.2 billion as of the end of the first quarter. Our database shows that 111 hedge funds are bullish on Berkshire Hathaway Inc. (NYSE:BRK.B) based on the first-quarter round of 13F filings, down by one over the quarter. Berkshire Hathaway Inc. (NYSE:BRK.B) ranks 13th in our list of 30 Most Popular Stocks Among Hedge Funds.
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