In this article, we discuss 5 top stock picks from Bill Gates’ latest portfolio. If you want to see the rest of his top holdings, go directly to Bill Gates’ Latest Portfolio: Top 12 Stock Picks.
5. Ecolab Inc. (NYSE:ECL)
Bill Gates’ Stake Value: $1,024,320,000
Percentage of Bill Gates’ 13F Portfolio: 4.45%
Number of Hedge Fund Holders: 42
Ecolab Inc. (NYSE:ECL) is an American company involved in water management, food safety, and infection prevention. Bill Gates’ fund has been consistent with its Ecolab Inc. (NYSE:ECL) stake since the company was added to its portfolio in Q3 2012. The Q4 2021 filings reveal that Bill & Melinda Gates Foundation Trust owns 4.36 million Ecolab Inc. (NYSE:ECL) shares, worth over $1 billion, accounting for 4.45% of the total investments.
Ecolab Inc. (NYSE:ECL) on March 14 announced that it intends to repurchase $500 million of its shares in 2022, and 286 million shares were outstanding as of February 28. The company also declared a $0.51 per share quarterly dividend on February 24, which will be paid on April 15.
On March 11, Barclays analyst Manav Patnaik lowered the price target on Ecolab Inc. (NYSE:ECL) from $215 to $185 and kept an Overweight rating on the shares.
As of Q4 2021, Impax Asset Management is a significant shareholder of Ecolab Inc. (NYSE:ECL), with 3.4 million shares valued at approximately $808 million. Overall, 42 hedge funds were bullish on Ecolab Inc. (NYSE:ECL) at the end of December 2021.
4. Canadian National Railway Company (NYSE:CNI)
Bill Gates’ Stake Value: $1,605,683,000
Percentage of Bill Gates’ 13F Portfolio: 6.99%
Number of Hedge Fund Holders: 42
Bill Gates’ fund started investing in Canadian National Railway Company (NYSE:CNI) back in Q3 2012. After consistently holding its position in the company over the years, the fund started reducing its Canadian National Railway Company (NYSE:CNI) stake in Q4 2020. The Q4 2021 filings suggest that Bill & Melinda Gates Foundation Trust held a $1.60 billion stake in the company, which accounts for 6.99% of the total portfolio.
On January 25, in addition to posting above consensus earnings and revenue for Q4 2021, Canadian National Railway Company (NYSE:CNI) announced a C$0.7325 per share quarterly dividend, a 19.1% increase from its prior dividend of C$0.6150. The dividend is payable on March 31. Canadian National Railway Company (NYSE:CNI) also announced a share repurchase plan of approximately 42 million shares.
JPMorgan analyst Brian Ossenbeck on March 10 kept a Neutral rating on Canadian National Railway Company (NYSE:CNI) with a C$171 price target. The analyst stated that the shares were fully valued after the pressure from activist shareholder TCI Fund Management, and there is “modest downside” to 2022 estimates if volumes don’t recover in Q2.
According to the Q4 database of Insider Monkey, 42 hedge funds were long Canadian National Railway Company (NYSE:CNI), with combined stakes of $7.74 billion. Egerton Capital Limited is a significant stockholder of the company, with 7.75 million shares worth $952.6 million.
3. Caterpillar Inc. (NYSE:CAT)
Bill Gates’ Stake Value: $2,002,304,000
Percentage of Bill Gates’ 13F Portfolio: 8.71%
Number of Hedge Fund Holders: 53
Caterpillar Inc. (NYSE:CAT) is a California-based company with interests in heavy equipment manufacturing, as well as financial products and services. Caterpillar Inc. (NYSE:CAT) has featured on Bill Gates’ 13F portfolio since Q3 2012, and entering 2022, the hedge fund’s $2 billion stake in Caterpillar Inc. (NYSE:CAT) represented 8.71% of the total investments.
Caterpillar Inc. (NYSE:CAT) on January 18 declared a $1.11 per share quarterly dividend, which was distributed to shareholders on February 18. The company’s Q4 results were announced on January 28, and Caterpillar Inc. (NYSE:CAT) beat Wall Street consensus for both earnings and revenue by solid margins.
On March 11, Seth Weber from Wells Fargo initiated coverage of Caterpillar Inc. (NYSE:CAT) with an Equal Weight rating and a $231 price target. According to the analyst, Caterpillar Inc. (NYSE:CAT) is positioned to benefit from the hot construction, energy, and mining markets, however, he sees limited valuation upside.
According to the fourth quarter database of elite funds tracked by Insider Monkey, 53 funds held long positions in Caterpillar Inc. (NYSE:CAT), up from 46 funds a quarter earlier. Fisher Asset Management is a leading shareholder of the company, with a position worth $1.4 billion.
Here is what Oakmark Funds has to say about Caterpillar Inc. (NYSE:CAT) in its Q2 2021 investor letter:
“Having followed the company closely for north of a decade, Caterpillar is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
2. Waste Management, Inc. (NYSE:WM)
Bill Gates’ Stake Value: $3,109,960,000
Percentage of Bill Gates’ 13F Portfolio: 13.53%
Number of Hedge Fund Holders: 35
Waste Management, Inc. (NYSE:WM), a Texas-based company that recycles and collects hazardous materials, is the second largest holding in Bill Gates’ fourth quarter portfolio. Bill Gates has been a long-term shareholder of Waste Management, Inc. (NYSE:WM), and in the fourth quarter of 2021, he owned 18.6 million shares of the company, worth $3.10 billion. The stock represents 13.53% of the total investments for Q4 2021.
Waste Management, Inc. (NYSE:WM) on March 1 announced a $0.65 per share quarterly dividend, which is distributable on March 31, to shareholders of record on March 17. The stock yields 1.72% as of March 14.
JPMorgan analyst Stephanie Yee on March 1 reinstated coverage of Waste Management, Inc. (NYSE:WM) with a Neutral rating and a $153 price target. While the analyst appreciates the strong waste business, owing to good margins and lots of free cash flow, he believes Waste Management, Inc. (NYSE:WM) “is playing a bit of catch-up” in terms of pricing to recover from cost inflation experienced in 2021.
A total of 35 hedge funds were bullish on Waste Management, Inc. (NYSE:WM) at the end of December 2021, with collective stakes exceeding $4 billion. Impax Asset Management is a major shareholder of the company, with 2.6 million shares worth close to $436 million.
1. Berkshire Hathaway Inc. (NYSE:BRK-A)
Bill Gates’ Stake Value: $10,072,317,000
Percentage of Bill Gates’ 13F Portfolio: 43.84%
Number of Hedge Fund Holders: 108
Berkshire Hathaway Inc. (NYSE:BRK-A) is the largest stock in Bill & Melinda Gates Foundation Trust’s Q4 portfolio, with the hedge fund owning 33.6 million shares of the company, worth more than $10 billion. Although Bill Gates’ fund decreased its position in Berkshire Hathaway Inc. (NYSE:BRK-A) by 13% in Q4, the stock still represents 43.84% of the total investments. Berkshire Hathaway Inc. (NYSE:BRK-A) is a multinational conglomerate known for its diversified interests in insurance, investments, utilities, and consumer products.
Berkshire Hathaway Inc. (NYSE:BRK-A) on February 26 reported its fourth quarter results, announcing earnings per share of $3.27, topping market estimates by $0.31. Revenue for the period jumped 11.52% year-over-year to $71.80 billion, surpassing Street consensus by $2.88 billion. Berkshire Hathaway Inc. (NYSE:BRK-A) repurchased $6.9 billion of its shares in Q4 2021, and total costs and expenses in 2022 increased 5.5% to $243.9 billion, owing to supply chain constraints across its subsidiaries.
The Q4 database of Insider Monkey reported that 108 hedge funds were bullish on Berkshire Hathaway Inc. (NYSE:BRK-A), up from 106 funds in the prior quarter. Tom Russo’s Gardner Russo & Gardner is a prominent shareholder of the company, with a $1.3 billion stake.
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