In this article, we discuss the top 5 blue chip value stocks from billionaire Cliff Asness’ 2023 portfolio. If you want to see more of billionaire Asness’ blue chip value stocks, go to Billionaire Cliff Asness 2023 Portfolio: Top 10 Blue Chip Value Stocks.
5. Citigroup Inc. (NYSE:C)
Trailing P/E Ratio: 6.27x
Cliff Asness’ AQR Capital Management’s Holdings: $251,591,167
Percentage of Cliff Asness’ AQR Capital Management’s Portfolio: 0.55%
Number of Hedge Fund Holders: 79
According to former Federal Reserve Chairperson and the current Treasury Secretary Janet Yellen, Citigroup Inc. (NYSE:C) has an opportunity to conduct mergers with other banks during these challenging times for the industry. Even though this could result in concentrated corporate power in the long run, but could be necessary in the short run to face the current uncertain economic situation. Citigroup Inc. (NYSE:C) is one of the biggest banks in the US, along with Bank of America Corporation (NYSE:BAC), Wells Fargo & Company (NYSE:WFC), the Goldman Sachs Group, Inc. (NYSE:GS), and JPMorgan Chase & Co. (NYSE:JPM). Click here to read the company’s earnings call transcript for Q4 2022.
4. American International Group, Inc. (NYSE:AIG)
Trailing P/E Ratio: 4.13x
Cliff Asness’ AQR Capital Management’s Holdings: $290,024,531
Percentage of Cliff Asness’ AQR Capital Management’s Portfolio: 0.63%
Number of Hedge Fund Holders: 46
On May 8, Paul Newsome at Piper Sandler raised the price target on American International Group, Inc. (NYSE:AIG) from $73 to $76. The analyst maintained an Overweight rating on the stock following better-than-expected Q1 2023 results. The positive results were driven by the company’s investment income from the life insurance division. The analyst added that the current share price does not reflect the true profitability of the business. American International Group, Inc. (NYSE:AIG) reported an EPS of $1.63, surpassing the analysts’ forecast by 21 cents. The company also increased its quarterly dividends from 32 cents to 36 cents.
Here’s what Diamond Hill Capital said about American International Group, Inc. (NYSE:AIG) in its Q1 2023 investor letter:
“Elsewhere in financials, the stocks of two of our insurance holdings – American International Group, Inc. (NYSE:AIG) and Allstate – came under pressure we believe due to the negative sentiment in the sector generally. These businesses are very different from banks, and we continue to have strong conviction in their ability to grow intrinsic value over the long term.”
3. The Cigna Group (NYSE:CI)
Trailing P/E Ratio: 12.14x
Cliff Asness’ AQR Capital Management’s Holdings: $294,035,852
Percentage of Cliff Asness’ AQR Capital Management’s Portfolio: 0.64%
Number of Hedge Fund Holders: 79
The Cigna Group (NYSE:CI) is a Bloomfield, Connecticut-based health services organization that operates in the insurance and healthcare industries, providing a wide range of health-related services to individuals, employers, and government entities. The Cigna Group (NYSE:CI) stock has been assigned a Strong Buy rating by John Ransom at Raymond James on May 8. The analyst regarded the company’s Q1 2023 results as better than anticipated and appreciated the management’s decision to increase the 2023 guidance. This reflects that The Cigna Group (NYSE:CI) needs to report an EPS of $19.29 during the remaining three quarters, which is slightly lower than the consensus forecast of $19.49.
Here’s what Baron Funds said about The Cigna Group (NYSE:CI) in its Q1 2023 investor letter:
“The Cigna Group (NYSE:CI) is a leading provider of health care services and benefits. Like UnitedHealth, Cigna’s shares were down alongside other managed care companies during the quarter, primarily on sector rotation. Cigna reported a fourth quarter beat and inline 2023 guidance driven by strong enrollment across all products; continued growth in established business (60% of revenue); and outsized growth in Cigna’s accelerated segments comprised of specialty pharmacy, Evernorth Health Services, and its U.S. Government business. Despite these positive results, investors stepped to the sidelines on concerns about proposed changes to the Medicare audit program, preliminary 2024 Medicare Advantage rates, the impact of Medicaid recertification, and heightened scrutiny of pharmacy benefit managers. While we believe that, over the long term, Cigna is a well-run, well-positioned managed care player with solid growth opportunities, we reduced our position to lower overall exposure to the managed health care segment.”
2. Exxon Mobil Corporation (NYSE:XOM)
Trailing P/E Ratio: 7.31x
Cliff Asness’ AQR Capital Management’s Holdings: $372,554,060
Percentage of Cliff Asness’ AQR Capital Management’s Portfolio: 0.81%
Number of Hedge Fund Holders: 73
Exxon Mobil Corporation (NYSE:XOM) is betting on the lithium revolution as it is an integral component of electric vehicle batteries. The Irving, Texas-based oil major acquired significant drilling rights in Arkansas, where it intends to produce lithium. The sizeable chunk consists of 120,000 acres, and the company acquired this from Galvanic Energy for $100 million. According to estimates shared by Galvanic Energy, the region has the potential to produce four million tons of lithium carbonate, which could be used to power 50 million electric vehicles.
1. Pfizer Inc. (NYSE:PFE)
Trailing P/E Ratio: 7.14x
Cliff Asness’ AQR Capital Management’s Holdings: $380,285,949
Percentage of Cliff Asness’ AQR Capital Management’s Portfolio: 0.83%
Number of Hedge Fund Holders: 73
Pfizer Inc. (NYSE: PFE) has recognized the immense potential of the expanding weight loss market. On May 22, the company revealed that the oral version of its weight loss drug semaglutide had demonstrated comparable efficacy to injectable medications like Novo Nordisk’s Wegovy, which shares the same active ingredient. The weight loss market has been transformed since the launch of Wegovy in the US in June 2021. The significant demand for weight-loss medications can be gauged by the fact that experts predict that the market could potentially support up to 10 competing products similar to Wegovy.
Here’s what Diamond Hill Capital said about Pfizer Inc. (NYSE:PFE) in its Q3 2022 investor letter:
“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”
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