In this article, we will take a detailed look at Billionaire Israel Englander’s Top 10 Stock Picks for 2024.
Billionaire Israel Englander is one of the most notable hedge fund managers in America. He founded Millennium Management back in 1989. Today, the fund’s portfolio is worth over $234 billion. Englander nabbed the top spot in Bloomberg’s list of highest-earning hedge fund managers in 2023, with a whopping $2.8 billion in net earnings including gains from personal investments and fees. Earlier this year, Bloomberg reported that Izzy Englander’s Millennium Management earned $600 million from commodities investments last year. However, in a separate report, the publication said despite installing a new chief of its commodities and making big changes, Millennium’s commodities business is lagging behind Citadel (of billionaire Ken Griffin) which made a whopping $8 billion from commodities in 2022. Bloomberg said, citing sources, that part of the reason why Millennium is struggling to post big gains is billionaire Englander’s imposition of “tight guardrails” to limit losses. To make money in the commodities business, experts say, you have to take risks and give some freedom to traders. But Englander likes to be in control. A Financial Times report earlier this year said Millennium Management manages a whopping $60 billion in assets, employs 5,400 people and has 17 offices. Yet Englander owns 100% of the firm.
The report said, citing a person who works at the fund, that this major concentration is “not a good idea.”
The FT report said Englander’s fund was up 8.3% in 2023 through October, while it returned 12.5% in 2022, 13.6% in 2021 and an impressive 25.9% in 2020.
For this article, we scanned Millennium Management’s Q1 portfolio and picked the fund’s top 10 holdings. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Israel Englander of Millennium Management
10. Salesforce Inc. (NYSE:CRM)
Billionaire Israel Englander’s Stake Value: $620,061,854
Billionaire Israel Englander increased his position in CRM software and Cloud company Salesforce Inc. (NYSE:CRM) by 36% in the first quarter of 2024, ending the quarter with a $620 million stake. Salesforce Inc. (NYSE:CRM) shares recently saw a bloodbath after posting mixed Q1 results and disappointing guidance. However, many Wall Street experts believe the market isn’t pricing in the AI tailwinds for Salesforce Inc. (NYSE:CRM). Mizuho Securities analyst Gregg Moskowitz thinks the company is still “well situated” to help customers in digital transformation. However, the analyst thinks Salesforce Inc. (NYSE:CRM) would do so prioritizing profitable growth. The analyst reiterated his Buy rating on the stock but cut his price target to $300 from $345.
Morgan Stanley analyst Keith Weiss, who has an Overweight rating and a $320 price target on Salesforce Inc. (NYSE:CRM), said that Salesforce’s PEG ratio of 1.2 shows the market is not pricing in operational discipline and earnings growth sustainability.
“We continue to view GenAI as a tailwind for Salesforce, with benefits likely coming in CY25, but at these levels, GenAI represents a call option.”
Salesforce Inc. (NYSE:CRM) is trading at 22x its fiscal 2026 earnings estimate of $10.99, which makes the stock attractively valued given the sector median P/E ratio of 23.85 and Salesforce’s AI growth catalysts. Salesforce Inc.’s (NYSE:CRM) revenue in fiscal 2026 is expected to growth at 9.10% while earnings are forecasted to rise by 11.00%.
Harding Loevner Global Equity Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its first quarter 2024 investor letter:
“Leading software companies have the advantage of high switching costs and the ability to incorporate new features into products customers already use. For example, Microsoft has added its Copilot chatbot functionality to everything from search (Bing Chat, recently renamed to just Copilot) to coding (GitHub Copilot) and workplace applications (Copilot for Microsoft 365). Software sold by Microsoft and other companies such as Salesforce, Inc. (NYSE:CRM), SAP, and ServiceNow are also already deeply integrated into their customers’ operations and workflow.
As large enterprises search for the right balance, Salesforce’s Data Cloud, a flagship offering, is designed to address a critical issue for them so they can make better use of AI tools. After a hectic buildout over the last few years of “data warehouses” and “data lakes”—two types of repositories for storing and processing data—across the various business units of large companies, many companies are left with what feels like islands of trapped data. Data Cloud solves this by creating a single platform to access and leverage all of an enterprise’s data, eliminating the need to constantly duplicate large amounts of information across different platforms. Users are then able to apply generative-AI technology, such as Salesforce’s Einstein tool, to a more comprehensive dataset, which enables them to better glean customers’ intentions, personalize marketing messages, and automate the processing of customer-service requests. As users build these systems, Einstein’s copiloting functionality helps their programmers work more efficiently so that IT departments with limited budgets and manpower can still develop the necessary tools. Salesforce’s management projects that revenue and earnings will climb about 9% and 45%, respectively, in fiscal 2025, citing the company’s operating leverage and cost discipline. We think these figures are achievable given the renewed focus on profitable growth, and so we added to the stock during the quarter.”
9. Eli Lilly & Co (NYSE:LLY)
Billionaire Israel Englander’s Stake Value: $641,290,321
Billionaire Israel Englander’s hedge fund increased its hold in Eli Lilly & Co (NYSE:LLY) by 10% in the first quarter of 2024, concluding the period with a $641.3 million stake in the company that’s persistently on investors’ radar these days amid weight loss-related growth catalysts. Goldman Sachs recently said in a report that estimated global sales from next-gen obesity drugs could reach $130 billion in 2030, up from its previous estimate of $100 billion. Goldman Sachs highlighted that Eli Lilly & Co (NYSE:LLY) and Novo Nordisk are expected to retain their “duopoly” in the market with an 80% market share through 2030.
Eli Lilly & Co (NYSE:LLY) shares are trading at a P/E of 123, much higher than its 5-year average of 50 and industry median of 33. However, Eli Lilly & Co (NYSE:LLY) blockbuster weight loss drugs like Mounjaro and Zepbound and their growth potential coupled with raging demand for weight loss drugs back this high valuation, according to several market analysts. Last month, Eli Lilly & Co (NYSE:LLY) shares skyrocketed after its diabetes treatment Mufengda® (Tirzepatide Injection) got approval in China which is amongst the countries with the highest recorded cases of diabetes.
Eli Lilly & Co (NYSE:LLY) is expected to see about 120% earnings growth this year and 40% earnings growth next year. Analysts at BofA see Eli Lilly & Co’s (NYSE:LLY) earnings more than doubling this year. The stock is trading at 43x its 2025 EPS estimate of $19.28 set by Wall Street. Eli Lilly’s revenue growth in 2025 could come in at 23.40%, based on data from Yahoo Finance. This high growth in earnings and revenue is more than enough to justify Eli Lilly & Co’s (NYSE:LLY) current stock price, given the company’s market-leading position in the weight loss market.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its first quarter 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company that discovers, develops, manufactures, and sells medicines in the categories of diabetes, oncology, neuroscience, and immunology, among other areas. Stock performance was strong due to robust fourth quarter sales of Mounjaro/ Zepbound, better-than-anticipated initial guidance for fiscal year 2024, and ongoing enthusiasm surrounding the company’s obesity and diabetes franchises. We continue to think Lilly is well positioned to grow revenue and earnings at attractive rates through the end of the decade and beyond.”
8. Alphabet Inc. (NASDAQ:GOOG)
Billionaire Israel Englander’s Stake Value: $820,337,453
Alphabet Inc. (NASDAQ:GOOG) is apparently in a no-holds-barred fight against competitors in the AI race that according to many threatened the bread and butter of Google its search business. However, many analysts believe Alphabet Inc. (NASDAQ:GOOG) is making a big turn and will continue to grow. Alex Kantrowitz, Big Technology founder, while talking to CNBC last month, said that the present for Alphabet Inc. (NASDAQ:GOOG) is looking “real good” amid revenue growth, leadership’s harsh stance against those “making trouble” insider the company, dividends and buybacks.
Latest data analyzed by Bank of America shows that across all devices, Alphabet Inc.’s (NASDAQ:GOOG) market search in search actually gained half a percentage point in May on a MoM basis. BofA analyst Justin Post said this shows Alphabet Inc.’s (NASDAQ:GOOG) AI Overviews are “aiding query growth and usage.”
Analysts also believe Alphabet Inc. (NASDAQ:GOOG) is in a strong position to offset any headwinds or lost market share in Google search with YouTube, which saw its ads revenue reach $8.1 billion in the first quarter, a 21% growth. Alphabet Inc.’s (NASDAQ:GOOG) net income in the period came in at $23.66 billion, up 57%, or $1.89 per share.
Alphabet Inc. (NASDAQ:GOOG) bulls believe the market is not incorporating the company’s growth in Cloud, Other Bets, Video and other high growth initiatives. The stock is trading 20x Alphabet’s 2025 EPS estimate of $8.57. This multiple makes the stock look attractively valued since the Wall Street expects Alphabet Inc. (NASDAQ:GOOG) earnings to grow by 13.40% in 2025 and by 19% over the past five years on a per annum basis.
Lakehouse Global Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its April 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) delivered a strong quarterly result that came in well ahead of analysts’ expectations. Revenue grew 15.4% (16.0% constant currency) to $80.5 billion and operating income grew 46.0% to $25.5 billion. Revenue growth accelerated across Search, YouTube Ads, and Google Cloud, all whilst the company delivered its highest operating margin since 2021 – showing meaningful progress in the company’s efforts to durably re-work their cost structure. On the Generative AI front, management emphasised the company’s infrastructure advantages including 5th generation TPUs(chips developed by Google specifically for AI training and inference), high performance data centre architecture, and AI models that are 100x more efficient versus 18 months ago. Overall, we believe that Alphabet is well placed for the AI opportunity ahead and still has significant latent earnings power. When combined with a relatively undemanding valuation of 21x forward net profit and over $100 billion of cash on the balance sheet, it’s not hard to see why we remain positive on the range of outcomes in the years ahead.”
