In this article, we will take a look at billionaire Cliff Asness’ 10 new stock picks. If you want to see more of billionaire Cliff Asness’ new stock picks, go directly to Billionaire Cliff Asness’ 5 New Stock Picks.
Billionaire Cliff Asness is the founder of quantitative giant AQR Capital Management. The fund, which stands for ‘applied quantitative research capital management’ has around $124 billion in assets under management as of the beginning of 2022 and a 13F equity portfolio of over $41 billion as of the end of September 30.
In terms of its strategy, AQR Capital Management uses economic theory and substantial math to build models through a continuous process of designing, refining, testing, and repeating. Asness is a believer in diversification as his fund holds over 2,000 stocks in its 13F portfolio at the end of Q3.
In terms of its performance, AQR Capital Management has bounced back from a more challenging 2018-2020.
Asness commented on the performance, “”While 2018 to 2020 was actually the toughest period I’ve seen yet, the first three months of 2021 have made for one of the strongest starts to a year we have had in our history.” AQR Capital Management would end up having a strong 2021, and a strong beginning of 2022.
In terms of 2022, the year has been a volatile one for the markets as the high inflation has caused the Federal Reserve to increase interest rates six times this year alone.
With the higher interest rates, many economists think there could be an economic slowdown or a recession next year.
As a result, the stock prices of many companies have decreased year to date and there is still a lot of uncertainty in the markets. Given the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
Cliff Asness of AQR Capital Management
Methodology
For our list of billionaire Cliff Asness’ 10 New Stock Picks, we took 10 stocks in which Cliff Asness’ AQR Capital Management established new equity positions in Q3 2022 according to 13F filings.
We ranked them based on the stake value of AQR Capital Management’s new position.
Because the fund uses a quantitative approach and the fund has thousands of positions, AQR Capital Management entered new positions into many different stocks in Q3 2022.
Billionaire Cliff Asness’ 10 New Stock Picks
10. The Marcus Corporation (NYSE:MCS)
AQR Capital Management’s Stake Value as of 9/30: $1,005,000
Percentage of AQR Capital Management’s 13F Portfolio as of 9/30: <0.01%
The Marcus Corporation (NYSE:MCS) is a motion picture theater, hotel and resort company. As of the end of 2021, The Marcus Corporation (NYSE:MCS) either owned or operated 1,064 screens in 85 movie theaters. The company also operated 8 entirely owned or majority owned hotels and resorts and the company managed 11 hotels resorts or other properties for third parties. Given the macroheadwinds, shares of The Marcus Corporation (NYSE:MCS) are down 11.5% year to date. AQR Capital Management nevertheless established a stake of around $1 million in Q3. In the third quarter, The Marcus Corporation (NYSE:MCS) reported EPS of $0.10 on revenue of $183.7 million versus estimates of $0.07 on sales of $167.24 million.
Alongside Royal Caribbean Cruises Ltd. (NYSE:RCL), EQT Corporation (NYSE:EQT), and Principal Financial Group, Inc. (NYSE:PFG), The Marcus Corporation (NYSE:MCS) is a new addition to billionaire Cliff Asness’ AQR Capital Management’s 13F portfolio at the end of Q3 2022.
9. Zumiez Inc. (NASDAQ:ZUMZ)
AQR Capital Management’s Stake Value as of 9/30: $1,047,000
Percentage of AQR Capital Management’s 13F Portfolio as of 9/30: <0.01%
Zumiez Inc. (NASDAQ:ZUMZ) is a specialty retailer of apparel, footwear, accessories, skateboards, snowboards, and other equipment for young men and women. As of February 26, 2022, the company operated 602 stores in the U.S., 52 stores in Canada, 67 stores in Europe and 17 stores in Australia. Although shares rallied from the pandemic lows of $15 to around $50 in the beginning of 2022, Zumiez Inc. (NASDAQ:ZUMZ) shares have more than halved to $23.53 due to macroeconomic headwinds. As a result, analysts expect Zumiez Inc. (NASDAQ:ZUMZ) to earn $1.75 per share in the next year on average versus the stock’s trailing twelve month EPS of $3.09. In Q3, AQR Capital Management established a new position of $1,047,000 in Zumiez Inc. (NASDAQ:ZUMZ).
8. Universal Technical Institute, Inc. (NYSE:UTI)
AQR Capital Management’s Stake Value as of 9/30: $2,609,000
Percentage of AQR Capital Management’s 13F Portfolio as of 9/30: <0.01%
Universal Technical Institute, Inc. (NYSE:UTI) provides transportation and technical training programs in the United States. For the nine months ended June 30, 2022, Universal Technical Institute, Inc. (NYSE:UTI) had an average undergraduate full time active students of 12,881, up from the same period’s 11,280 for 2021. For fiscal year 2022 Q3, Universal Technical Institute, Inc. (NYSE:UTI)’s revenue rose 20.5% to $101 million and its adjusted net income rose 71% year over year to $5.7 million. Given the broader market decline in 2022, however, Universal Technical Institute, Inc. (NYSE:UTI) shares are down 4.86% year to date. In the third quarter, AQR Capital Management established a new position of $2,609,000 in Universal Technical Institute, Inc. (NYSE:UTI).
7. Mercadolibre, Inc. (NASDAQ:MELI)
AQR Capital Management’s Stake Value as of 9/30: $2,895,000
Percentage of AQR Capital Management’s 13F Portfolio as of 9/30: <0.01%
Mercadolibre, Inc. (NASDAQ:MELI) is a leading e-commerce platform in Latin America. After a substantial rally from 2016 to 2021, the stock has decreased from its highs last year due to macroeconomic headwinds and the company not meeting expectations in the near term. Nevertheless, Mercadolibre, Inc. (NASDAQ:MELI) has revenue growth potential. SaltLight Capital commented on Mercadolibre, Inc. (NASDAQ:MELI) in a Q3 investor letter,
“Despite the economic slowdown in developed markets, our Latin American investment in MercadoLibre, Inc. (NASDAQ:MELI) had another outstanding third quarter growing revenues by 61% on a USD FX-neutral basis (GMV +32% FXN). Despite this strong growth, it also managed to expand operating profit margins to 11% (compare this to Amazon which is struggling to make a profit in its retail business).
LatAm’s e-commerce penetration is still very low compared to Asia and developed markets. MELI is mostly a marketplace but has also adopted models from elsewhere. In the recent past, it has built 3rd party seller infrastructure that has made Amazon so successful, and it is also heavily investing in a mobile based fintech infrastructure very similar to ANT Group in China. After only launching a couple of quarters ago, their advertising business is already at 1.3% of Gross Merchandise Value.”
AQR Capital Management established a new position of $2,895,000 in Mercadolibre, Inc. (NASDAQ:MELI) in the third quarter.
6. LSB Industries, Inc. (NYSE:LXU)
AQR Capital Management’s Stake Value as of 9/30: $2,945,000
Percentage of AQR Capital Management’s 13F Portfolio as of 9/30: <0.01%
LSB Industries, Inc. (NYSE:LXU) manufactures, markets, and sells chemical products for the agricultural, industrial and mining markets. Shares of LSB Industries, Inc. (NYSE:LXU) have rallied 18% year to date as fertilizer prices have been above historical averages due to the Russia Ukraine war. For the remainder of 2022 and full year 2023, the company, which makes nitrogen based fertilizers such as ammonia, expects the fertilizer prices to remain above historical averages as well.
LSB Industries, Inc. (NYSE:LXU) explains, “Natural gas costs in Europe continue to be a major driver of high fertilizer prices. While down from the peak levels reached in August, which caused operations at numerous European ammonia facilities to cease due to prohibitively high production costs, natural gas prices in Europe remain well above historical averages. Moving into the winter heating season it appears possible that European gas prices could rise again if temperatures are below average for periods of time as supply remains tight. This would limit or prevent many of the continent’s ammonia facilities from resuming production, keeping nitrogen fertilizer prices high. Despite energy cost inflation in the U.S., domestic natural gas prices remain a fraction of those in Europe, giving U.S. ammonia producers a substantial cost advantage in the global market.”
AQR Capital Management established a new position of $2,945,000 in LSB Industries, Inc. (NYSE:LXU) in Q3.
Like LSB Industries, Inc. (NYSE:LXU), Royal Caribbean Cruises Ltd. (NYSE:RCL), EQT Corporation (NYSE:EQT), and Principal Financial Group, Inc. (NYSE:PFG) are new additions to billionaire Cliff Asness’ AQR Capital Management’s 13F portfolio at the end of Q3 2022.
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Disclosure: None. Billionaire Cliff Asness’ 10 New Stock Picks is originally published on Insider Monkey.
