Below is the list of 5 stocks under $20 according to billionaire Cliff Asness’ portfolio. For a comprehensive list and detailed discussion about Cliff Asness’ investment strategy, please see Billionaire Cliff Asness Portfolio: 10 Stocks Under $20.
5. Qurate Retail, Inc. (NASDAQ:QRTEA)
AQR Capital Management’s Stake Value: $45.4 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.08%
Number of Hedge Fund Holders: 39
The stock price of Qurate Retail, Inc. (NASDAQ:QRTEA) fell sharply in the past months amid near-term industry challenges. Its revenue declined 7% year over year in the third quarter to $3.14 billion. Despite that, the company is committed to returning cash flows to investors. It recently announced a special dividend of $1.25 per share for shareholders.
White Brook Capital, in its Q3 2021 investor letter, mentioned Qurate Retail and discussed its stance on the firm. Below is a part of what White Brook Capital stated.
“Qurate Retail (QRTEA) was bought during the 3rd quarter. Qurate’s largest business is broadcast video shopping channels Home Shopping Network (HSN) and QVC. These channels cater to an older, mostly female clientele and has proven to be more durable than many have expected. The opportunity for Qurate is in online video shopping – a category that is being unsuccessfully targeted by the largest players in online shopping – including Amazon, Facebook, Pinterest, and Google. Qurate has compelling personalities and the technical knowhow on how to best present and maximize sales in video format and can port those skills to the online format. The price for the stock indicates that the marginal seller of the stock doesn’t appreciate that online video shopping is different from shopping online as the presenter and the presentation – not only the good – is content and the reason that a potential consumer engages and then buys. This is hard, Qurate does it well, and many merchants need those skills. You can review the complete comments by clicking here.
4. Ford Motor Company (NYSE:F)
AQR Capital Management’s Stake Value: $53.4 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 55
AQR Capital slashed its stake in Ford Motor Company (NYSE:F) by 44% in the third quarter to capitalize on the share price run. Despite that, the firm held $53.4 million worth of stake in the company. Ford’s stock price is up 121% in the last twelve months, driven by improving economic trends. The company posted $33 billion in revenues and its earnings per share of $0.51 topped expectations by $0.24 per share. The company also resumed dividends after strong third-quarter earnings boosted its cash flows. Looking ahead, the company expects to invest $40 to $45 billion in growth opportunities.
Hedge funds look bullish over the future fundamentals of Ford Motor Company. Of the 873 hedge funds tracked by Insider Monkey, 55 were bullish about the company as of June.
3. Harmony Gold Mining Company Limited (NYSE:HMY)
AQR Capital Management’s Stake Value: $57.5 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.10%
Number of Hedge Fund Holders: 12
Billionaire Cliff Asness’ hedge fund declined its stake by 22% in Harmony Gold Mining Company Limited (NYSE: HMY) during the third quarter. Shares of the company have been under pressure since the beginning of this year due to a decline in gold prices. Besides that, the mining company looks strong with a 32% growth in gold production in the September quarter along with a 23% reduction in net debt. Dividend investors can also consider Harmony Gold amid its dividend yield of 2.2%.
AQR Capital Management and David Iben’s Kopernik Global Investors were the leading stakeholders in the company. Harmony Gold was in 12 hedge funds’ portfolios as of June.
2. Wipro Limited (NYSE:WIT)
AQR Capital Management’s Stake Value: $74.5 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 14
Wipro Limited (NYSE:WIT), which is engaged in IT consulting and other services, generated robust returns for investors in the last two years both through share price gains and dividends. Its stock price is up 77% in the last twelve months. The company is backing its returns through its growth strategies and strong financial numbers. Its annual revenue run-rate surpassed the $10 billion mark after generating $2.65 billion in revenue for the September quarter. The addition of 116 clients during the quarter brought its total of active clients to 1,284.
The number of long hedge funds’ positions increased to 14 as of June compared to 13 in the prior quarter. AQR Capital Management is the leading stakeholder in the company despite selling 31% of the stake in the September quarter.
1. Vale S.A. (NYSE:VALE)
AQR Capital Management’s Stake Value: $180 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.33%
Number of Hedge Fund Holders: 27
Vale S.A. (NYSE:VALE)’s share price lost almost half of its value in the past couple of months due to weakening iron ore demand from China. However, the selloff has created a good entry point for new investors. The company’s strategy of returning billions of dollars through dividends makes it a good stock to hold for the long term. At present, the company offers a semi-annual dividend of $1.51 per share to shareholders.
In the third quarter investor letter, Miller Value Partners, an investment management firm, discussed its stance on Vale. Here is what Miller Value Partners stated:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
You can also take a look at the Top 10 Stock Picks of Brad Farber’s Atika Capital and 10 Best Inexpensive Stocks to Buy Right Now.
