Bill Gates’ Latest Portfolio: Top 12 Stock Picks

Published on March 14, 2022 at 1:21 pm by Hamna Asim in Hedge Funds, News

In this article, we discuss 12 top stock picks from Bill Gates’ latest portfolio. If you want to skip to Gates’ largest holdings, go directly to Bill Gates’ Latest Portfolio: Top 5 Stock Picks.

Bill & Melinda Gates Foundation Trust was established in 2000, and it operates as a private philanthropic foundation with investments distributed across the materials, information technology, transports, industrials, healthcare, and consumer staples sectors. Michael Larson, an MBA graduate from the University of Chicago, has long been associated with Bill & Melinda Gates Foundation Trust, serving as its chief investment officer. He also manages Bill Gates’ personal wealth.

In Q4 2021, Bill & Melinda Gates Foundation Trust opened new positions in Sanderson Farms, Inc. (NASDAQ:SAFM) and Canadian Pacific Railway Limited (NYSE:CP), slashed stakes in Microsoft Corporation (NASDAQ:MSFT), Berkshire Hathaway Inc. (NYSE:BRK-A), and Grupo Televisa, S.A.B. (NYSE:TV), and sold out of Affirm Holdings, Inc. (NASDAQ:AFRM) and Kansas City Southern.

The fourth quarter portfolio of Bill & Melinda Gates Foundation Trust consists of only 22 stocks, with approximately $23 billion in managed 13F securities and a top 10 holdings concentration of 92.71%. Some of the most notable stocks owned by Bill Gates’ fund include Walmart Inc. (NYSE:WMT), Caterpillar Inc. (NYSE:CAT), and Alphabet Inc. (NASDAQ:GOOG).

Bill Gates' Latest Portfolio: Top 12 Stock Picks

Our Methodology

We used the fourth quarter portfolio of Bill & Melinda Gates Foundation Trust for this analysis, selecting the newest stocks acquired and the largest holdings of the fund. We have mentioned the hedge fund sentiment around the stocks, in addition to available analyst ratings, for the convenience of potential investors.

Bill Gates’ Latest Portfolio: Top Stock Picks

12. Sanderson Farms, Inc. (NASDAQ:SAFM)

Bill Gates’ Stake Value: $100,171,000

Percentage of Bill Gates’ 13F Portfolio: 0.43%

Number of Hedge Fund Holders: 33

Sanderson Farms, Inc. (NASDAQ:SAFM) operates as an integrated poultry processing company in the United States. Sanderson Farms, Inc. (NASDAQ:SAFM) is a new addition to Bill Gates’ fourth quarter portfolio. The billionaire acquired 524,236 shares of Sanderson Farms, Inc. (NASDAQ:SAFM), worth over $100 million, representing 0.43% of the total Q4 holdings.

On January 20, Sanderson Farms, Inc. (NASDAQ:SAFM) declared a quarterly dividend per share of $0.44. The dividend was paid on February 15, to shareholders of record on February 1.

It was reported on March 4 that Sanderson Farms, Inc. (NASDAQ:SAFM)’s sale to Continental Grain and Cargill is unlikely to be approved by U.S. antitrust regulators unless the terms of the transaction are amended, as Senator Elizabeth Warren raised “significant” antitrust concerns. Warren pointed to alleged “anti-competitive practices” in the poultry industry, which lead to higher prices. She urged the DOJ to “consider the extensive history of price fixing” when deciding on the sale of Sanderson Farms, Inc. (NASDAQ:SAFM) to Continental Grain and Cargill.

In the fourth quarter of 2021, 33 hedge funds reported owning stakes in Sanderson Farms, Inc. (NASDAQ:SAFM), up from 31 funds in the quarter earlier. Magnetar Capital held the biggest stake in the company, with 792,575 shares worth $151.4 million.

Elite hedge funds are pouring into Sanderson Farms, Inc. (NASDAQ:SAFM), just like Walmart Inc. (NYSE:WMT), Caterpillar Inc. (NYSE:CAT), and Alphabet Inc. (NASDAQ:GOOG).

11. Canadian Pacific Railway Limited (NYSE:CP)

Bill Gates’ Stake Value: $178,307,000

Percentage of Bill Gates’ 13F Portfolio: 0.77%

Number of Hedge Fund Holders: 55

Canadian Pacific Railway Limited (NYSE:CP) was incorporated in 1881 and is headquartered in Calgary, operating as a freight railway in Canada and the United States. Canadian Pacific Railway Limited (NYSE:CP) is a new arrival in Bill Gates’ fourth quarter portfolio. Bill & Melinda Gates Foundation Trust purchased 2.4 million shares of Canadian Pacific Railway Limited (NYSE:CP) in Q4, worth $178.3 million, accounting for 0.77% of the fund’s total securities.

JPMorgan analyst Brian Ossenbeck resumed coverage of Canadian Pacific Railway Limited (NYSE:CP) on March 10 with an Overweight rating and a C$113 price target, while also adding the shares to the firm’s U.S. Analyst Focus List as a growth pick. The analyst believes that Canadian Pacific Railway Limited (NYSE:CP)’s merger with Kansas City Southern is likely to be approved, “creating the only true transcontinental railroad that is still the smallest in North America.” The merger will result in the strongest multi-year growth story and possible upside with targeted synergies, according to Ossenbeck.

Canadian Pacific Railway Limited (NYSE:CP) shares gained 4.1% on March 7 when Bill Ackman’s Pershing Square opened a new position in the company, owning more than 2.8 million shares worth $202.4 million. Overall, 55 hedge funds were bullish on the stock at the end of December 2021.

Here is what ClearBridge International Growth EAFE Strategy has to say about Canadian Pacific Railway Limited (NYSE:CP) in its Q3 2021 investor letter:

“The other major headwind to relative performance in the quarter was Canadian Pacific Railway Limited (NYSE:CP). The stock has been a strong performer for the Strategy but negative sentiment around its bidding war for U.S. rail operator Kansas City Southern has weighed on the stock since late May. As a result, the cyclical uptick we expected from the company has been masked by the takeover. Indeed, we have been frustrated by the muted performance among Canadian Pacific Railway Limited (NYSE:CP) and other recently added positions in our structural bucket of growth companies with more cyclical business models or that are undergoing a restructuring that should lead to a step change improvement in earnings. As more regions reopen from COVID-19 and spending rebounds, we expect better performance from our structural names, including Airbus and hospitality and food service provider Compass.”

10. FedEx Corporation (NYSE:FDX)

Bill Gates’ Stake Value: $386,334,000

Percentage of Bill Gates’ 13F Portfolio: 1.68%

Number of Hedge Fund Holders: 64

Based in Memphis, Tennessee, FedEx Corporation (NYSE:FDX) is a multinational transportation and e-commerce business operating worldwide. Amid the Russia-Ukraine war, the company announced that it is suspending all services in Russia and Belarus.

Bill Gates’ fund has consistently held shares of FedEx Corporation (NYSE:FDX) since the third quarter of 2012. In Q4 2021, the hedge fund did not make any changes to its FedEx Corporation (NYSE:FDX) stake, holding 1.49 million shares worth $386.3 million.

On March 3, JPMorgan analyst Brian Ossenbeck lowered the price target on FedEx Corporation (NYSE:FDX) to $297 from $312 and kept an Overweight rating on the shares. According to the analyst, the stock has lagged due to the pandemic and the geopolitical events. However, he remains “constructive” on the stock and is watching for the Q4 earnings release, which he expects will beat consensus estimates.

According to Insider Monkey’s Q4 data, 64 hedge funds held stakes in FedEx Corporation (NYSE:FDX), up from 49 funds in the earlier quarter. Southeastern Asset Management is a prominent shareholder of the company, with 1.4 million shares worth $374.3 million.

Here is what Artisan Value Fund has to say about FedEx Corporation (NYSE:FDX) in its Q3 2021 investor letter:

“Our weakest Q3 performers included FedEx. Shares of FedEx Corporation (NYSE:FDX), a global shipping and logistics firm, were held back by disappointing business results as labor cost headwinds and air network disruptions overshadowed solid top-line trends. We think the company should be able to overcome these near-term issues. Importantly, FedEx Corporation (NYSE:FDX) has strong pricing power as it operates in a consolidated global shipping industry. In September, the company announced it would increase its shipping rates by an average of 5.9% across most of its services, which is the first time in several years that its annual increase would exceed 5.0%. The industry’s renewed pricing discipline is a welcome change, reflecting a broader commitment to earn better returns on invested capital. FedEx Corporation (NYSE:FDX) is also closer to fully integrating TNT, a European-focused parcel company it acquired in 2016. The market is beginning to incorporate a higher probability FedEx will fully integrate TNT, which will provide a significant boost to profits. The stock now trades at a near-trough multiple of less than 12X 2022 earnings, so we added to our position on weakness.”

9. United Parcel Service, Inc. (NYSE:UPS)

Bill Gates’ Stake Value: $489,556,000

Percentage of Bill Gates’ 13F Portfolio: 2.13%

Number of Hedge Fund Holders: 55

United Parcel Service, Inc. (NYSE:UPS) is a Georgia-based supply chain and logistics company, providing courier, freight, and logistics services. In Q4 2021, Bill Gates’s fund owned 2.2 million United Parcel Service, Inc. (NYSE:UPS) shares, worth $489.5 million, representing 2.13% of the total Q4 investments. There were no changes in the fund’s position in the stock during the fourth quarter.

On February 2, Loop Capital analyst Rick Paterson raised the price target on United Parcel Service, Inc. (NYSE:UPS) to $250 from $226 but kept a Hold rating on the shares. The analyst noted that United Parcel Service, Inc. (NYSE:UPS)’s Q4 results were “strong” and the 2022 outlook guarantees “another successful year”, however, the forward earnings multiple of 18.9-times is above its one, three, and five-year averages.

In its Q4 earnings result, published on February 1, United Parcel Service, Inc. (NYSE:UPS) reported an EPS of $3.59, topping estimates by $0.49. The revenue jumped 11.55% year-over-year to $27.77 billion, exceeding estimates by $688.34 million.

Among the hedge funds tracked by Insider Monkey, 55 funds were bullish on United Parcel Service, Inc. (NYSE:UPS), up from 42 funds in the prior quarter. Renaissance Technologies is a significant shareholder of the company, with a $249.4 million stake.

Here is what Saturna Capital Amana Funds has to say about United Parcel Service, Inc. (NYSE:UPS) in its Q4 2021 investor letter:

“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. Despite the share price decline, it remains expensive with modest growth. We sold our position in United Parcel. The UPS sale was premature, and we may re-engage given an opportunity.

8. Microsoft Corporation (NASDAQ:MSFT)

Bill Gates’ Stake Value: $651,688,000

Percentage of Bill Gates’ 13F Portfolio: 2.83%

Number of Hedge Fund Holders: 262

Microsoft Corporation (NASDAQ:MSFT) is one of the biggest American multinational tech firms, which was co-founded by Bill Gates. Securities filings for Q4 report that Gates slashed his Microsoft Corporation (NASDAQ:MSFT) position by 35%, holding 1.93 million shares worth $651.6 million. After selling off the stock in Q2 2019, the fund reinstated its Microsoft Corporation (NASDAQ:MSFT) position in Q3 2021.

On February 8, Morgan Stanley analyst Keith Weiss kept an Overweight rating and a $372 price target on Microsoft Corporation (NASDAQ:MSFT) stock.

According to the fourth quarter database of Insider Monkey, 262 hedge funds reported owning stakes worth $75.6 billion in Microsoft Corporation (NASDAQ:MSFT), up from 250 funds the previous quarter, holding stakes in the company worth $65.8 billion. Fisher Asset Management held the biggest stake in Microsoft Corporation (NASDAQ:MSFT), with 26.8 million shares worth more than $9 billion.

Here is what Saturna Capital Amana Funds has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:

“Only two companies remain from 2010’s top 10 list: Apple and Microsoft. Going back to 2000, only Microsoft remains. We expect that Microsoft Corporation (NASDAQ:MSFT) will maintain its position as the dominant global provider of personal and business software, while growing its cloud business and potentially being a key provider of augmented and mixed hardware and software.

US Technology companies have been the equity market’s biggest winners in recent years. Because of the Amana Income Fund’s objective of current income, many of these zero- or low-dividend companies do not suit the Fund’s mandate. One that does — Microsoft Corporation (NASDAQ:MSFT), which returned 46.03% for 2021 — was the Fund’s second biggest contributor to returns during the year. While Technology no doubt underpins much of the current economy and its future potential, Tech stocks have also benefited from low inflation, globalization, and valuations that are near historic highs. With globalization backsliding and inflation worries escalating, we believe companies in other industries with strong financial positions, competitive advantages, strong management, attractive dividend yields, and reasonable valuations can offer investors diversification in the context of equity markets increasingly concentrated in a handful of very large Technology firms.”

7. Crown Castle International Corp. (NYSE:CCI)

Bill Gates’ Stake Value: $952,699,000

Percentage of Bill Gates’ 13F Portfolio: 4.14%

Number of Hedge Fund Holders: 38

Crown Castle International Corp. (NYSE:CCI) is a Texas-based real estate investment trust that owns communications infrastructure across the United States. On March 2, Crown Castle International Corp. (NYSE:CCI) announced its public offering of 2.9% senior notes due 2027 in an aggregate principal amount of $750 million.

Bill Gates’ fund started building its position in Crown Castle International Corp. (NYSE:CCI) back in Q4 2014. Over the years, the fund’s stake in Crown Castle International Corp. (NYSE:CCI) has remained largely consistent. Entering 2022, Gates’ portfolio had 4.5 million shares of Crown Castle International Corp. (NYSE:CCI), worth $952.6 million, representing 4.14% of the total Q4 holdings.

On February 8, Crown Castle International Corp. (NYSE:CCI) declared a $1.47 per share quarterly dividend, in line with previous. The dividend will be distributed on March 31, to shareholders of record on March 15.

Deutsche Bank analyst Matthew Niknam on February 3 lowered the price target on Crown Castle International Corp. (NYSE:CCI) to $204 from $209 and reiterated a Buy rating on the shares. Crown Castle International Corp. (NYSE:CCI) remains one of Niknam’s top digital infrastructure “pure plays” that are benefiting from the advancements in 5G adoption.

A total of 38 funds held long positions in Crown Castle International Corp. (NYSE:CCI) in Q4 2021, compared to 45 funds in the quarter earlier. Echo Street Capital Management holds a significant stake in the company, with 555,778 shares worth $116 million.

In addition to Walmart Inc. (NYSE:WMT), Caterpillar Inc. (NYSE:CAT), and Alphabet Inc. (NASDAQ:GOOG), Crown Castle International Corp. (NYSE:CCI) is a notable entity in Bill Gates’ fund.

Here is what ClearBridge Investments has to say about Crown Castle International Corp. (NYSE:CCI) in its Q2 2021 investor letter:

“Turning to the U.S., U.S. communications company Crown Castle was one of the lead performers. Crown Castle is the leading independent owner and operator of wireless communications infrastructure in the U.S. with a portfolio of approximately 40,000 towers. Crown Castle performed well after the U.S. network operators announced plans to deploy 5G spectrum, with investment much larger and much sooner than the market was anticipating.”

6. Walmart Inc. (NYSE:WMT)

Bill Gates’ Stake Value: $1,001,506,000

Percentage of Bill Gates’ 13F Portfolio: 4.35%

Number of Hedge Fund Holders: 63

Walmart Inc. (NYSE:WMT) is an American retail chain that operates supermarkets and discount stores across the country. Bill Gates opened a position in Walmart Inc. (NYSE:WMT) back in Q3 2012, and has been consistent with holding his stake over the years. In the fourth quarter of 2021, Bill & Melinda Gates Foundation Trust owned 6.9 million Walmart Inc. (NYSE:WMT) shares, worth more than $1 billion, representing 4.35% of the total holdings.

On February 22, Morgan Stanley analyst Simeon Gutman lowered the price target on Walmart Inc. (NYSE:WMT) to $165 from $170 and kept an Overweight rating on the shares, noting that Walmart Inc. (NYSE:WMT)’s Q1 guidance suggests total EBIT will decline to low teens year-over-year and the details for Q1 baseline regarding the contribution from the divested UK and Japan businesses were unclear.

Among the hedge funds tracked by Insider Monkey, GQG Partners is the leading shareholder of Walmart Inc. (NYSE:WMT) as of Q4 2021, with 10.4 million shares worth $1.50 billion. Overall, 63 hedge funds were bullish on the stock in the fourth quarter.

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