In this article, we will be taking a look at billionaire DE Shaw’s latest portfolio: top 10 stock picks. To skip our detailed analysis of these stocks and Shaw’s investment insights, you can go directly to see Billionaire DE Shaw’s Latest Portfolio: Top 5 Stock Picks.
David E. Shaw is the founder of the New York-based investment management firm, DE Shaw, currently holding a portfolio valued at over $85 billion. The billionaire’s own net worth as of this September stands at $7.9 billion. The bulk of his personal wealth has been accumulated by Shaw by way of investing and managing his stellar hedge fund over the past years. DE Shaw primarily invests in stocks in the technology and services industries, and his latest 13F holdings mainly include major blue chip companies offering stable gains over sustained time periods.
Some of the most renowned names found in Shaw’s investment portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT). All of these companies have been amassing profits for years. Amazon.com, Inc. (NASDAQ:AMZN) brought in revenue of $121.2 billion in just this second quarter, representing a growth of 7.2% year over year, and beating estimates by $2.1 billion. The company holds an EPS growth rate of 40.2%, expected to be achieved over the next three to five years. As for Apple Inc. (NASDAQ:AAPL), the company’s third quarter results show an EPS of $1.2, beating estimates by $0.04, and revenue of $82.9 billion, up 1.9% year over year. Microsoft Corporation also shows great growth potential, having a year-over-year revenue growth rate of 17.9%, a 13.2% expected increase in its EPS over the next three to five years, and a one-year dividend growth rate of 10.7%. The positive performance of stocks like these in Shaw’s portfolio has certainly added to his wealth and success in the investment world.
Shaw’s two largest funds, the Composite and Oculus, generated net returns of about 18.5% and 15% in 2021 and 2020, respectively. The Composite fund is the largest fund held by DE Shaw, and since its launch in 2001, it has generated an annualized net return of 12%. As for the Oculus fund launched in 2004, the annualized net return it has generated since its inception stands at 12.5%. The Oculus fund has performed exceptionally well in its tenure, never having even a single year of negative returns since it was created.
Shaw has recently increased his stakes in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Paypal Holdings, Inc. (NASDAQ:PYPL). At present, these stocks make up about 1.4%, 0.7%, and 0.7% of his portfolio, respectively. Shaw’s hedge fund uses quantitative methods and proprietary computational technology for its investments, allowing the billionaire to have earned nearly $7 billion from his firm alone, since 2005. At present, he owns about 63% of his hedge fund company, according to estimates cited by Bloomberg. Investors looking for major gains in the big tech and consumer discretionary sectors have a lot to gain from following Shaw’s investment patterns and current holdings, which is why we have compiled this list of the top 10 holdings in Shaw’s portfolio at present.
David E. Shaw of D.E. Shaw
Let’s now take a look at billionaire DE Shaw’s latest portfolio: top 10 stock picks.
Our Methodology
We have selected the top 10 holdings from DE Shaw’s latest 13F holdings. These stocks are also popular among many hedge funds this year, based on Insider Monkey’s second quarter 2022 hedge fund data, when we tracked 895 funds.
Billionaire DE Shaw’s Latest Portfolio: Top 10 Stock Picks
10. Tesla, Inc. (NASDAQ:TSLA)
DE Shaw’s Stake Value: $514,910,000
Percentage of DE Shaw’s 13F Portfolio: 0.6%
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is an automobile manufacturer focusing on the development of electric vehicles. The company provides sedans and sport utility vehicles, among more.
On September 6, Wolfe Research analyst Rod Lache upgraded shares of Tesla, Inc. (NASDAQ:TSLA) from Peer Perform to Outperform. The analyst also placed a $360 price target on the stock.
This August, Tesla, Inc. (NASDAQ:TSLA) almost tripled its sales compared to July sales. Chinese-made vehicle sales went up by 172.7%. This also represents a 73.8% increase from the company’s vehicle sales a year ago.
Tesla, Inc. (NASDAQ:TSLA) was found in the 13F holdings of 72 hedge funds in the second quarter. Their total stake value was $7.2 billion. Citadel Investment Group was the largest stakeholder in the company, holding 20.8 million shares worth over $14 billion.
9. Bank of America Corporation (NYSE:BAC)
DE Shaw’s Stake Value: $516,070,000
Percentage of DE Shaw’s 13F Portfolio: 0.6%
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) is a diversified banking company offering banking and financial products and services. The company works to serve individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments across the globe.
An Overweight rating was reiterated on shares of Bank of America Corporation (NYSE:BAC) by analyst Jason Goldberg on July 19. The analyst also placed a $51 price target on the stock.
This July, Bank of America Corporation (NYSE:BAC) increased its quarterly dividend by nearly 5% to bring it up to $0.22 per share. The company has a one-year dividend growth rate of 16.7%. Over the next three to five years, Bank of America Corporation’s (NYSE:BAC) EPS is expected to rise by about 8.1%.
There were 99 hedge funds long Bank of America Corporation (NYSE:BAC) in the second quarter, with a total stake value of $35.9 billion. In comparison, 99 hedge funds were long in the stock in the previous quarter as well, with a total stake value of $45.4 billion.
ClearBridge Investments, an investment management firm, mentioned Bank of America Corporation (NYSE:BAC) in its second quarter 2022 investor letter. Here’s what the firm said:
“In the second quarter we made a sizable add to our position in Bank of America (NYSE:BAC) as our bank holdings have significant leverage to rising interest rates. The Fed, unfortunately, was late to realize inflation’s magnitude, maintaining for far too long that inflationary pressures were merely transitory. This mistake caused inflation to accelerate, necessitating a larger intervention than if the Fed had moved sooner.”
Just like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), Bank of America Corporation (NYSE:BAC) is among Shaw’s top holdings in his latest 13F portfolio.
8. The Procter & Gamble Company (NYSE:PG)
DE Shaw’s Stake Value: $530,392,000
Percentage of DE Shaw’s 13F Portfolio: 0.62%
Number of Hedge Fund Holders: 71
The Procter & Gamble Company (NYSE:PG) is a consumer staples company offering branded consumer packaged goods. The company operates globally. Some of its major brands include Olay, Old Spice, Safeguard, and Secret.
Lauren Lieberman, an analyst at Barclays, holds an Overweight rating on The Procter & Gamble Company (NYSE:PG) shares as of August 2. The analyst also placed a $154 price target on the stock.
In the second quarter, The Procter & Gamble Company (NYSE:PG) brought in revenue of $19.5 billion, up 3% year over year, beating estimates by $104.1 million. Over the next three to five years, The Procter & Gamble Company’s (NYSE:PG) EPS is expected to grow by 4.7%, and it currently also has a one-year dividend growth rate of 8.7%.
Out of 895 hedge funds, 71 funds were long The Procter & Gamble Company (NYSE:PG) in the second quarter. Their total stake value was $5.5 billion. Of these funds, Bridgewater Associates was the largest stakeholder in the company, holding 6.7 million shares worth $970 million.
7. iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF)
DE Shaw’s Stake Value: $543,567,000
Percentage of DE Shaw’s 13F Portfolio: 0.63%
Number of Hedge Fund Holders: 13
iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF), an exchange-traded fund, was launched by BlackRock, Inc. in 2002. The ETF is managed by BlackRock Fund Advisors. It aims to track the performance of the ICE US Treasury 7-10 Year Bond Index, using the representative sampling technique.
This September, iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) was named as one of the top ten ETF inflow leaders. The ETF was one of 10 such funds that together amassed over $25 billion in inflows.
6. Meta Platforms, Inc. (NASDAQ:META)
DE Shaw’s Stake Value: $568,195,000
Percentage of DE Shaw’s 13F Portfolio: 0.66%
Number of Hedge Fund Holders: 184
Meta Platforms, Inc. (NASDAQ:META) is a communication services company developing products that enable users to connect and share with their friends and family. The company offers mobile applications such as Facebook and Instagram, among more.
Piper Sandler’s Thomas Champion holds a Neutral rating on Meta Platforms, Inc. (NASDAQ:META) as of June 8. The analyst also placed a $220 price target on the stock.
Meta Platforms, Inc.’s (NASDAQ:META) EPS is expected to grow by 7.1% over the next three to five years, while its operating cash flow growth stands at 13.4% at present. The company’s revenue growth year over year stands at 13.9%.
Citadel Investment Group was the largest stakeholder in Meta Platforms, Inc. (NASDAQ:META) in the second quarter, out of 184 hedge funds long the stock. Ken Griffin’s fund held 20.8 million shares in the company, worth $3.4 billion.
Alger Capital, an investment management company, mentioned Meta Platforms, Inc. (NASDAQ:META) in its second quarter investor letter. Here’s what they said:
“Meta Platforms, Inc. (NASDAQ:META) operates Facebook, the world’s largest social network. The digital advertising industry is taking market share of advertising dollars from print, radio, and tv media. However, concerns about brand risk, or having advertisements appear alongside of controversial content, caused brands and agencies to move budgets away from meta, resulting in disappointing revenue. Diminished ad tracking capability relative to consumer opt-out also weighed upon sentiment for meta shares. Meta’s share performance responded favorably, however, to first quarter results that that while not strong fundamentally, were positive against extremely low expectations among some investors. The positive contribution to portfolio performance was due to a sequential quarterly increase in customer utilization and management lowering its expense guidance $3 billion in order to protect earnings. In a market environment that is rewarding companies with relatively high current earnings, we believe Meta’s spending discipline resonated with investors.”
Meta Platforms, Inc. (NASDAQ:META), like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), is a popular investment option among many elite hedge funds today.
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Disclosure: None. Billionaire DE Shaw’s Latest Portfolio: Top 10 Stock Picks is originally published on Insider Monkey.
