In this article, we discuss billionaire DE Shaw’s top 10 stock picks. If you want to skip our comprehensive analysis of Shaw’s history, investment philosophy, and hedge fund performance, go directly to Billionaire DE Shaw’s Top 5 Stock Picks.
Dr. David E. Shaw launched DE Shaw with $28 million in 1988. This New York City-based hedge fund is run by an executive committee while Dr. Shaw is committed to his role as the leading scientist at D. E. Shaw Research. DE Shaw earned his doctorate in 1980 from Stanford. In 1994, President Clinton appointed him to a position on the President’s Council of Advisors on Science and Technology.
Some of the main sectors DE Shaw focuses its investments on include Services, Technology, Healthcare, Financial, Consumer Goods, and Materials. The hedge fund’s 13F portfolio has over $115 billion in managed securities, as of June 30, 2021.
Some of the top stocks in the investment portfolio of DE Shaw at the end of the second quarter of 2021 were Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), among others discussed in detail below. The top five holdings comprise around 4.24% of the portfolio. The total value of the holdings is up 1.12% when compared to the first quarter of the year.
David E. Shaw of D.E. Shaw
Our Methodology
With this context in mind, here is our list of billionaire DE Shaw’s top 10 stock picks. Data from the 873 hedge funds tracked by Insider Monkey was also used to gauge hedge fund sentiment around each stock.
Why should we pay attention to DE Shaw’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Billionaire DE Shaw’s Top 10 Stock Picks
10. Ford Motor Company (NYSE:F)
DE Shaw’s Stake Value: $674.2 million
Percentage of DE Shaw’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 55
In the second quarter of 2021, DE Shaw held 45 million shares in Ford Motor Company (NYSE:F) worth $674 million, constituting 0.58% of the 13F portfolio.
On July 16, BofA set Ford Motor Company (NYSE:F)’s price target $18, just barely above the past target of $17, keeping a Buy rating. The company achieved an EPS of $0.13 in Q2 2021 compared to the estimated $0.03.
During the second quarter, 55 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in the motor company worth $2.1 billion.
9. The Walt Disney Company (NYSE:DIS)
DE Shaw’s Stake Value: $677.2 million
Percentage of DE Shaw’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 112
The Walt Disney Company (NYSE:DIS) specializes in the production of movies and other entertainment, notably the Marvel and Star Wars franchises respectively. The Walt Disney Company (NYSE:DIS) was launched in 1923 and is situated in Burbank, California. Latest filings by DE Shaw state that the hedge fund owned 3.85 million shares in the firm at the end of the second quarter, with a worth of $677 million, representing 0.58% of the portfolio.
RBC Capital set The Walt Disney Company (NYSE:DIS)’s target price to $210 from $202, with a reinforced Outperform rating on August 13.
On September 26, The Walt Disney Company (NYSE:DIS)’s latest film in the Marvel Cinematic Universe, Shang-Chi and the Legend of the Ten Rings, topped the weekly box office, netting $13 million in sales.
By June 30, 112 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in the entertainment company worth $10.8 billion.
Here is what RiverPark Funds has to say about The Walt Disney Company in its Q2 2021 investor letter:
“DIS shares declined for the quarter, taking a pause after a big fourth quarter and first quarter stock price advance, as Disney+ subscriber numbers were disappointing to investors. Disney+, the company’s DTC streaming business, had blown past previous subscriber projections, having gone from zero to 104 million in 17 months, but investors were now expecting 109 million subscribers. Management still expects significant continued growth to 230-260 million subscribers in 2024.
DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, expecting over 100 original titles per year, including two new Star Wars spin-off series, 10 Star Wars films, 10 Marvel films, 15 Disney and Pixar films and 15 Disney and Pixar series.
Now that the disruption in its theme park, cruise and theatrical businesses appears to be coming to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. We also note that DIS has an extremely strong balance sheet and a growing pool of free cash flow to be used both to return to shareholders and to invest in future opportunities.”
8. Snap Inc. (NYSE:SNAP)
DE Shaw’s Stake Value: $706 million
Percentage of DE Shaw’s 13F Portfolio: 0.6%
Number of Hedge Fund Holders: 64
Officialized in 2010 and headquartered in Santa Monica, California, Snap Inc. (NYSE:SNAP) rests at the eighth spot on our list of billionaire DE Shaw’s top 10 stock picks. The firm offers a camera-based communication application. During the second quarter, DE Shaw held 10.46 million shares in the social media corporation valued at $706 million.
During the second financial quarter, 64 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Snap Inc. (NYSE:SNAP) worth $5.4 billion.
Here is what RiverPark Funds has to say about Snap Inc. in its Q2 2021 investor letter:
“Snap shares were a top contributor for the quarter as well, also driven by strong first quarter results. The company reported accelerating revenue growth of 66% for the period (up from 62% fourth quarter growth), driven by user growth of 22%, and a 36% expansion in average revenue per user (ARPU). The company also guided to stronger-than-expected and accelerating 81%-85% revenue growth for second quarter 2021. Adjusted EBITDA improved by $79 million year over year for a break-even margin, up 1,800 basis points, and free cash flow improved dramatically, turning positive for the period to $126 million. Snap also continued to roll-out products that should help drive further expansion in user growth and ARPU, including Spotlight, a TikTok-like experience, with more than 125 million Snapchatters using it during March, and original programming starring Ryan Reynolds.
With TTM of $2.8 billion in revenue and an ARPU that is about 1/2 that of Twitter and 1/3 that of Facebook, we believe Snap has a long runway for both revenue growth and expanded profitability as it improves its platform functionality, grows its audience, and continues to advance its monetization.”
7. Walmart Inc. (NYSE:WMT)
DE Shaw’s Stake Value: $766.6 million
Percentage of DE Shaw’s 13F Portfolio: 0.66%
Number of Hedge Fund Holders: 71
Ranking seventh on our list of billionaire DE Shaw’s top 10 stock picks, Walmart Inc. (NYSE:WMT) owns a chain of hypermarkets around the United States. Walmart Inc. (NYSE:WMT) was incorporated in 1945 and is operated in Bentonville, Arkansas.
As of the second quarter of 2021, 71 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in the company valued at $8 billion.
6. QUALCOMM Incorporated (NASDAQ:QCOM)
DE Shaw’s Stake Value: $840.3 million
Percentage of DE Shaw’s 13F Portfolio: 0.72%
Number of Hedge Fund Holders: 72
In the second quarter of 2021, DE Shaw held 5.879 million shares in QUALCOMM Incorporated (NASDAQ:QCOM) worth $840 million.
On October 1, investment firm Jefferies set Qualcomm’s price target at $137, changing the stock’s rating to Hold. The technological firm achieved an EPS of $1.90 in Q2 2021, beating its $1.67 estimate, with a $7.94 billion revenue, just short of the first quarter’s $8.24 billion.
During Q2 2021, 72 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in the company worth $4 billion versus 73 hedge funds with $2.77 billion worth of stakes in the previous quarter.
Here is what ClearBridge Investments has to say about QUALCOMM Incorporated in its Q1 2021 investor letter:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
Click to continue reading and see Billionaire DE Shaw’s Top 5 Stock Picks.
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Disclosure: None. Billionaire DE Shaw’s Top 10 Stock Picks is originally published on Insider Monkey.
