In this article we take a look at why Billionaire Cliff Asness Was Relentlessly Buying Meta Platforms (META) and These 9 Stocks in Q1. Click to skip ahead and see why Billionaire Cliff Asness Was Relentlessly Buying Meta Platforms (META) and These 4 Stocks in Q1.
Meta Platforms, Inc. (NASDAQ:META), Pfizer Inc. (NYSE:PFE), and Moderna, Inc. (NASDAQ:MRNA) are three of the stocks that billionaire money manager Cliff Asness was buying relentlessly in Q1.
Cliff Asness’ AQR Capital Management is a Greenwich, Connecticut-based quant fund that manages more than $145 billion in assets. The fund was founded in early 1998 by Cliff Asness, who continues to serve as its Managing Principle and Chief Investment Officer. Asness has a personal fortune of $1.4 billion according to Forbes, down from $3.1 billion in 2019.
Asness graduated from the University of Chicago with a Ph.D. in finance, and has also received a B.S. in engineering from the University of Pennsylvania and a B.S. in economics from the Wharton School. He is a well-regarded researcher, having attained numerous honors for his work that include winning the Bernstein Fabozzi/Jacobs Levy Award five times, and the Graham and Dodd Award twice. He has been named one of the 50 most influential people in global finance by Bloomberg Markets.
Asness launched AQR after working in Goldman Sachs’ quantitative research division. AQR grew rapidly in its early years, as its assets under management swelled to $12 billion in 2004 from less than $1 billion three years earlier. The firm’s AUM peaked at over $226 billion in 2018 before several of its strategies got blistered in recent years. Most notable was the firm’s value strategy, which tanked between 2018 and 2020, years which Asness described as a “crash” for value stocks.
Asness was pleased with the performance of the fund’s value stocks in 2021, which turned a profit, and which the fund manager believes are still “record cheap”. Value stocks continued to do well in Q1, outperforming growth stocks, and AQR reaped the rewards with many of the fund’s strategies. AQR’s multistrategy fund Absolute Return, was up 29.7% net of fees through the end of April, while its Global Value strategy had gained 35%.
Cliff Asness of AQR Capital Management
AQR’s 13F portfolio was valued at $52.7 billion as of March 31, down from $55.1 billion a quarter earlier. The fund made thousands of moves in its gigantic portfolio, though its overall turnover was relatively low at just 16%. There weren’t any major moves in the fund’s sector allocation either, with tech, healthcare, and finance stocks having the heaviest weighting.
In this article, we’ll look at ten stocks that the billionaire money manager was relentlessly buying during Q1 as he eyes a continued rebound for both value stocks and AQR.
Our Methodology
The following data is gathered from AQR Capital Management’s latest 13F filing with the SEC. We follow hedge funds like AQR Capital Management because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2022 reporting period.
Billionaire Cliff Asness Was Relentlessly Buying Meta Platforms (META) and These 9 Stocks in Q1
10. Consolidated Edison, Inc. (NYSE:ED)
Value of AQR Capital Management‘s 13F Position: $127 million
Number of Hedge Fund Shareholders: 26
Meta Platforms, Inc. (NASDAQ:META), Pfizer Inc. (NYSE:PFE), and Moderna, Inc. (NASDAQ:MRNA) were among the stocks being relentless bought up by Cliff Asness in Q1. The billionaire’s hedge fund also owns 1.34 million shares of Consolidated Edison, Inc. (NYSE:ED) as of March 31, up by 68% quarter-over-quarter. That gives the money manager the largest ownership stake in ED among the select group of funds tracked by Insider Monkey. Adage Capital Management, founded by fellow billionaire Phill Gross, took a new Q1 stake in ED, which ranks as one of the 5 Best Retirement Stocks To Buy Now.
Consolidated Edison, Inc. (NYSE:ED), an electric and natural gas utility provider in New York, is quietly approaching dividend king status, having increased its dividend payments for 48 consecutive years. Its 3.5% dividend yield is certainly nothing to scoff at, and the company’s dividend payout ratio sits in a healthy range of between 60% and 70%.
While Consolidated Edison, Inc. (NYSE:ED) has a growing green energy business, the company appears to be willing to divest those assets to further power its core utility segment. Con Ed’s clean energy business could be worth as much as $4 billion according to Bloomberg, which would help fund the company’s $15.7 billion in planned capital projects through 2025, which are aimed at boosting the safety and reliable of its utility assets.
9. Wells Fargo & Company (NYSE:WFC)
Value of AQR Capital Management‘s 13F Position: $132 million
Number of Hedge Fund Shareholders: 102
AQR Capital owns 2.73 million shares of Wells Fargo & Company (NYSE:WFC), which consistently ranks as one of the 30 Most Popular Stocks Among Hedge Funds. Asness’ fund grew its WFC position by 55% during the first quarter. Wells Fargo shares have slumped by 32% since mid-February
Wells Fargo & Company (NYSE:WFC) lost one of its staunchest hedge fund supporters in Q1, as legendary value investor Warren Buffett, who has long considered banks to be one of the best long-term investments, sold out of his holding company’s remaining stake in Wells Fargo. It’s been over three decades, dating back to 1989, since Wells Fargo hasn’t featured prominently in Buffett’s portfolio.
Wells Fargo & Company (NYSE:WFC) had to massively scale back its dividend payments at the height of the pandemic, but is in the process of raising them up again, including the announcement of a 20% hike to $0.30 per share beginning in the third quarter. With the money-center bank’s payout ratio around 29% and earnings expected to grow further, it’s likely that Wells Fargo’s dividend will continue to rise in the coming quarters.
8. LyondellBasell Industries N.V. (NYSE:LYB)
Value of AQR Capital Management‘s 13F Position: $133 million
Number of Hedge Fund Shareholders: 32
Hedge funds have lost quite a bit of faith in LyondellBasell Industries N.V. (NYSE:LYB) over the years, but AQR Capital isn’t one of them. The fund raised the size of its position in LYB by 44% to 1.29 million shares during the first quarter. Hedge fund ownership of the chemical company has fallen by 63% over the past eight years.
Refiners like LyondellBasell Industries N.V. (NYSE:LYB) are struggling to keep up with global demand due to various factors, including Russian sanctions and a quota on Chinese exports. U.S capacity has fallen close to 1 million barrels per day compared to pre-pandemic levels, at 17.9 million barrels. LyondellBasell has contributed to that collapse, recently shutting down its Houston refinery due to its high cost of maintenance. That site was capable of refining more than 280,000 barrels daily.
LyondellBasell Industries N.V. (NYSE:LYB) is also facing other headwinds, including high ethane prices, which are eating into the margins of one of the world’s leading ethylene producers. Bank of America also cited inflationary pressure as a driving force behind a loss of consumer confidence and activity, which could further squeeze chemical companies’ margins.
7. Steel Dynamics, Inc. (NASDAQ:STLD)
Value of AQR Capital Management‘s 13F Position: $135 million
Number of Hedge Fund Shareholders: 30
AQR Capital also loaded up on shares of Steel Dynamics, Inc. (NASDAQ:STLD) during Q1, building a position in the company that was 38% larger by the end of Q1 than it was at the start of the quarter. Several other prominent funds sold off significant portions of their STLD positions during Q1, including Ken Griffin’s Citadel Investment and Joel Greenblatt’s Gotham Asset Management.
Steel Dynamics, Inc. (NASDAQ:STLD) produced record results in 2021, nearly doubling its revenue year-over-year to $18.4 billion, while earnings per share soared by nearly 500% to $15.56. The company expects more of the same in Q2, anticipating adjusted EPS of between $6.61 and $6.65.
Steel Dynamics, Inc. (NASDAQ:STLD) parlayed that Q1 earnings windfall into a massive dividend hike, raising it by 31%. While the company operates in a cyclical industry, it’s clearly confident that it can maintain that dividend going forward given its large new steel plant and the greater cash flow generation potential that will result from it.
6. Nucor Corporation (NYSE:NUE)
Value of AQR Capital Management‘s 13F Position: $138 million
Number of Hedge Fund Shareholders: 22
Closing out the first half of the list is Nucor Corporation (NYSE:NUE), which recently hit a seven-year low in terms of hedge fund ownership. AQR Capital is bucking that trend however, nearly doubling the size of its NUE position during Q1 to 929,805 shares.
It’s not surprising to see Cliff Asness also invest in Nucor Corporation (NYSE:NUE), given the similarities between it and Steel Dynamics. The older and slower growing of the two steel makers, Nucor nonetheless had a record 2021 that has extended into early 2022. Net income during the first quarter grew to $2.1 billion, more than double what the company earned during the year-ago period.
Investors have been quick to buy up Nucor Corporation (NYSE:NUE) amid the strength in the steel industry, pushing its valuation up near record highs and its dividend yield down near its historical lows. That should give retail investors pause to look for a more opportune moment to buy NUE shares. It’s also worth noting that while higher steel prices led to a massive profit boost, Nucor actually sold 11% less steel in Q1 than it did in the first quarter of 2021.
Check out the second half of this article to see how many shares of Meta Platforms, Inc. (NASDAQ:META), Pfizer Inc. (NYSE:PFE), and Moderna, Inc. (NASDAQ:MRNA) Cliff Asness was buying in Q1.
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Disclosure: None. Billionaire Cliff Asness Was Relentlessly Buying Meta Platforms (META) and These 9 Stocks in Q1 is originally published at Insider Monkey.
