Billionaire Andreas Halvorsen’s Top 5 Stock Picks

Below are the billionaire Andreas Halvorsen’s top 5 stock picks. For a comprehensive list please see Billionaire Andreas Halvorsen’s Top 10 Stock Picks.

5. Centene Corporation (NYSE:CNC)

The healthcare services provider Centene Corporation (NYSE: CNC) is the long-running investment of Viking Global Investors. The hedge fund first initiated a position in Centene in 2018. The position is currently accounting for 3.66% of the overall portfolio.

Centene Corporation stock price underperformed this year due to the coronavirus pandemic. The company has recently provided a soft outlook for fiscal 2021. Centene expects FY2020 total revenue in the range of $109.8 billion-$111.4 billion while FY2021 revenue guidance stands around $114.1 billion-$116.1 billion.

Magellan Health Inc. (NASDAQ:MGLN) shares jumped more than 13 percent on Monday morning after health insurer Centene Corp (NYSE:CNC) announced that it is acquiring Magellan in a deal valued at $2.2 billion. Magellan will receive $95 per share from Centene. The offer price represents a premium of 14.7 percent from Magellan’s stock closing price of $82.84 on Thursday.

4. American Express Company (NYSE:AXP)

The billionaire Andreas Halvorsen used the dip in American Express Company (NYSE: AXP) stock price as a buying opportunity. The hedge fund has initiated a big position in AXP early in 2020 when its shares fell sharply on virus spread concerns. American Express Company accounts for 3.91% of the overall portfolio valued above $1 billion.

Shares of American Express are down 5% in the last twelve months despite a strong recovery in the last six months. The market reports are hinting that AXP’s financial numbers are likely to take a long time for a full recovery. The New York Fed’s latest Survey of Consumer Expectations Credit Access Survey indicates the big impact of the pandemic on credit demand, credit access, and expectations relating to both for the coming year.

About 6 months ago we shared the following remarks from Bill Nygren about American Express:

“With American Express, we believed the worst-case scenario was significantly better than all that. We think the company has done an excellent job in improving its cardholder value proposition in recent years by making significant investments in merchant acceptance, cardholder rewards and services, and small-business payment tools. Relative to entering the last financial crises, it has dramatically cut costs and strengthened its balance sheet structure.

The payments-network side of the business is now more competitive with Mastercard and Visa. Given all that, in the adverse Fed scenario, we would still expect American Express to earn $4 to $5 per share this year. Two years from now, we think it should be earning more than twice that. With the stock where it is today [at a recent $96], we believe that’s too cheap for this caliber of business.”

3. Fidelity National Information Services, Inc. (NYSE:FIS)

Fidelity National Information Services, Inc. (NYSE: FIS) is the third-largest stock holding of Viking Global Investors 13F portfolio, accounting for 4.70%. The firm has raised its position by 32% in Fidelity National during the September quarter.

Other hedge funds are also optimistic about Fidelity. For instance, Artisan Mid Cap Fund claimed in an investor’s letter that Fidelity National has a strong business model and it has the potential to face short-term volatility. Here is what Artisan Mid Cap Fund stated:  

“Fidelity National Information Services has benefited from regional banks’ outsourcing their core banking systems, and more recently, the company won its first outsourcing deals with top banks in the US and Japan. We believe this could be a broader effort by larger banks to outsource their core systems, creating a meaningful opportunity for Fidelity National to accelerate its revenue growth. Furthermore, the company recently indicated its merger with Worldpay is going better than planned and raised its synergy expectations. While we believe the profit cycle remains very compelling, the company’s market cap has grown to the limit of our mid-cap mandate, and we began harvesting our position at the beginning of the quarter as our successful campaign matures. Shares have since come under pressure due to concerns that Fidelity National—like Global Payments—faces a difficult short-term environment for payment volumes. We expect Fidelity National’s earnings overall will prove relatively resilient despite these pressures and thus paused our sales.”

2. Adaptive Biotechnologies Corporation (NASDAQ:ADPT)

The billionaire Andreas Halvorsen has been showing confidence in Adaptive Biotechnologies Corporation (NASDAQ: ADPT) since the second quarter of 2019. It is the second-largest stock holding of Vikings Global 13F portfolio. It appears that Halvorsen’s hedge fund has benefited from the Adaptive Biotechnologies position. This is because shares of Adaptive rallied close to 90% in the last twelve months.

1. Microsoft Corporation (NASDAQ:MSFT)

The technology giant Microsoft Corporation (NASDAQ: MSFT) is the long-running investment of Viking Global and it is the largest stock holding of its 13F portfolio.

Microsoft’s potential of generating high double-digit revenue and earnings growth makes it a perfect stock to hold for the long-term. Its share price rallied 37% in the last twelve months. The company also offered massive cash returns to investors in the form of share price gains, buybacks, and cash dividends. The company’s move towards the cloud and artificial intelligence has enhanced its future fundamentals. 

Please also see 5 Biggest Companies That Don’t Pay Taxes and Billionaire Daniel Sundheim’s Top 10 Stock Picks