In this article we take a look at billionaire Israel “Izzy” Englander’s top 10 stock picks as of the end of fourth quarter of 2020. To skip our detailed discussion on Englander’s investment strategy and his history, go directly to Billionaire Izzy Englander’s Top 5 Stock Picks.
Israel “Izzy” Englander is an American billionaire and hedge fund manager who founded Millennium Management in 1989. As of the end of 2020, the New York-based hedge fund has over $138 billion in managed securities. Englander’s total worth stands at around $9.5 billion. Data shows that the 72-year-old billionaire made a whopping $3.8 billion last year.
Israel Englander’s Hedge Fund Returns and Performance
Englander’s hedge fund Millennium Management uses a multi-strategy approach to diversify its portfolio and minimize risks. That’s why it’s beating the market even during volatility. In 2020, Israel Englander’s hedge fund gained about 23.3%. Millennium Management has hundreds of teams or “pods” of traders that are designated for different market sectors. In his latest letter to shareholders, Englander said that that the firm’s risk management now analyzes over 300,000 positions and produces extensive reports. Englander said that diversification was a “fundamental factor” in his hedge fund’s spectacular performance in 2020, as the firm saw “positive returns” across “all four of our strategies and all three of our global regions – US, Europe, and Asia.”
Born and raised in a Polish-Jewish family in Brooklyn, Englander attended religious school as a kid. His father’s family was killed in the Holocaust. His parents were deported to a labor camp in the Soviet Union. They immigrated to the U.S. in 1947. Graduated from New York University with a finance degree, Englander was interested in stocks and investing from his high-school years. He interned at Oppenheimer and got his first full-time job at Kaufmann, Alsberg & Co.
Israel Englander of Millennium Management
Israel Englander’s Investment Philosophy
“In 1982 on the stock exchange when we made marketing options, I like to tell people, ‘In the land of the blind, the one-eyed is king’. At the same time, since the regulations did not allow brokers to trade for your own account on the same day in the same security, what I would do is that, I would see market makers by giving them a pool of capital which trade on particular option of crowds on the floor of the exchange, and we would have a profitable split, proper arrangement with them.
I left the floor in 1985. I started Millennium in 1989-1980. The model was effectively pretty much again the same. The trajectory just kept continuing. We started with a very small amount of money. We started Millennium about in the middle of $30 to $35 million dollars, a big chunk of it was my own.. We started doing multiple audits a year. Our risk department used to issue the risk transparency report ourselves, and we now have an independent risk organization that is now taking the data, and issuing it on an independent basis. So everything has moved towards independence.
I think the primary piece is the ability to deliver what you say you’re going to deliver. From there you need to control various pieces of the business such as risk. Risk becomes very very critical. Every investor has a different need, and the idea is to try to adjust yourself to those needs and effectively meet their expectations. Today I wouldn’t say that we are perfect, but we continue to strive to improve the process.”
Israel Englander stands out in an industry which is struggling. The hedge fund industry is losing ground amid severe losses. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, 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 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. 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.
Let’s start our list of billionaire Izzy Englander’s top 10 stock picks.
10. The Procter & Gamble Company (NYSE: PG)
Value: $556,176,000
Percent of Izzy Englander’s 13F Portfolio: 0.4%
Number of Hedge Fund Holders: 83
Izzy Englander upped his stake in Procter & Gamble Co by 174% in the fourth quarter, ending the period with about 4 million shares of the company, worth $556.18 million. Procter & Gamble has posted 10 consecutive quarters of growth as the company cut 100 products to increase focus and reduce costs. The company is seeing an upbeat demand for its personal, home cleaning and health-related products. P&G share are up 18% over the last 12 months.
According to our database, the number of PG’s long hedge funds positions increased at the end of the fourth quarter of 2020. There were 83 hedge funds that hold a position in Procter & Gamble compared to 75 funds in the third quarter. The biggest stakeholder of the company is Cedar Rock Capital, with 9.8 million shares, worth $1.4 billion.
9. Alphabet Inc. (NASDAQ: GOOG)
Value: $638,916,000
Percent of Izzy Englander’s 13F Portfolio: 0.46%
Number of Hedge Fund Holders: 157
Alphabet ranks 9th on the list of billionaire Israel Englander’s top 10 stock picks. Millennium Management in the fourth quarter increased its hold in the company by 236%, ending the period with 364,545 shares, worth $634 million. Google recently said that it would stop using personal browsing history of users to target ads amid privacy concerns. Instead, the company plans to use what is known as “private sandbox” technology which sells ads based on group interests or cohorts instead of individual users.
As of the end of the fourth quarter, there were 157 hedge funds in Insider Monkey’s database that held stakes in GOOG, compared to 150 funds in the third quarter. TCI Fund Management, with 2.95 million shares of Alphabet, is the biggest stakeholder in the company.
In their Q4 2020 investor letter, Bretton Fund highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) is one of them. Here is what the fund said:
“Google (aka Alphabet) was one of our best performing stocks last year, returning 30.9%, while its earnings per share increased 19%. As lockdowns first went into place in the spring, many advertisers hit pause on their campaigns, waiting—like a lot of us—to see what the world would look like. And then—like a lot of us—advertisers adjusted. Travel companies cut back their campaigns, while ads for other goods, like athleisure wear and video games, picked up the slack. Google had a rough second quarter, but was back in the swing of things by the next quarter.”
8. Intel Corporation (NASDAQ: INTC)
Value: $888,828,000
Percent of Izzy Englander’s 13F Portfolio: 0.64%
Number of Hedge Fund Holders: 72
Intel ranks 8th on the list of billionaire Izzy Englander’s top 10 stock picks. Millennium Management increased its hold in the company by 1224% in the fourth quarter, entering 2021 with a $888 million stake. Intel is under pressure after its rival AMD revealed its server chip Epyc Milan based on Zen 3 architecture. Intel shares are up 42% over the last 12 months.
Fisher Asset Management is one of the 72 hedge funds tracked by Insider Monkey having stakes in INTC at the end of the fourth quarter. The fund owns over 29.2 million shares of the company.
Third Point, in their Q4 2020 investor letter, said that Intel Corporation (NASDAQ: INTC) has an urgent need to address its “brain drain” of engineering talent that contributes to its dramatic underperformance. Here is what Third Point has to say about Intel Corporation in their Q4 2020 investor letter:
“After building a significant stake in Intel in Q4, we sent a letter on December 29th to Intel’s Board Chairman, Omar Ishrak. We shared our views regarding Intel’s dramatic underperformance and suggested certain steps the company could take to remedy a rapidly deteriorating outlook. We highlighted an urgent need for Intel to address its “brain drain” of engineering talent, the chief cause of the manufacturing and design deficiencies that have led to its declining market share.
Shortly after our note and engagement with the company, Intel announced it was bringing back Pat Gelsinger as its new CEO. Gelsinger is a respected engineer and manager who previously spent 30 years of his career working closely with Intel’s legendary founders during the company’s best days. With a background in electrical engineering and prior roles such as head of Intel’s digital enterprise group, desktop products group, and Intel Labs, and as the company’s first CTO, Gelsinger has the deep technical expertise needed to address Intel’s current execution issues. He also has a history of success in reinvigorating major organizations. During his eight-year tenure as CEO of VMWare, he put the on-premise company on a path to the hybrid cloud and positioned it for several years of growth ahead.
Equally important, while Gelsinger is a respected engineer, he is also widely lauded as a manager of engineers. It is hard to think of a better person to motivate and inspire the best of Intel’s thousands of brilliant employees who will help build the company’s future.
Once Gelsinger has successfully regained Intel’s position as the premier microprocessor vendor in the world, we believe the opportunity for additional shareholder value creation is enormous. The semiconductor compute TAM is over $100 billion, including CPUs, GPUs, FPGAs, ASICs, and other architectures, and growth is increasingly driven by unstoppable trends like cloud computing and artificial intelligence. Intel’s human, financial, and intellectual property resources are unmatched in the semiconductor industry. The ability to leverage those resources in order to better capture the full unbounded growth of this market opportunity set makes us excited to be long-term shareholders.”
7. NVIDIA Corporation (NASDAQ: NVDA)
Value: $890,629,000
Percent of Izzy Englander’s 13F Portfolio: 0.64%
Number of Hedge Fund Holders: 88
Nvidia ranks 7th on the list of billionaire Israel Englander’s top 10 stock picks for 2021. Englander’s hedge fund increased its stake in the GPU company by almost 1000% in the quarter. JPMorgan recently released its Cryptocurrency Exposure Basket, saying that it does not plan to buy cryptocurrency but would invest in related companies. The list of companies the bank intends to invest in to increase its crypto exposure includes Nvidia, as processors of the company are used heavily for cryptocurrency mining.
As of the end of the fourth quarter, 88 hedge funds in Insider Monkey’s database of 887 funds held stakes in NVIDIA, compared to 82 funds in the third quarter. GQG Partners is the biggest stakeholder in the company, with 3.7 million shares, worth $1.9 billion.
Mairs & Power, in their Q4 2020 investor letter, mentioned NVIDIA Corporation (NASDAQ: NVDA) and emphasized their views on the company. Here is what Mairs & Power has to say about NVIDIA Corporation in their Q4 2020 investor letter:
“The Fund’s biggest relative contributor in 2020 was Nvidia (NVDA). Nvidia specializes in graphics cards for computers, and it has benefited from updated chipsas well as strong market positions in applications and machine learning.”
6. Alibaba Group Holding Limited (NYSE: BABA)
Value: $958,944,000
Percent of Izzy Englander’s 13F Portfolio: 0.69%
Number of Hedge Fund Holders: 156
Millennium Management is bullish on Chinese ecommerce giant Alibaba, as the fund increased its stake in the company by over 900%. It now has a $959 million stake in the company which is up 24% over the last 12 months. However Alibaba is down 14% over the last 30 days as tensions between the company and the Chinese government are mounting. The Wall Street Journal recently reported that the Chinese government has asked Alibaba to divest its media assets like social media network Weibo, the South China Morning Post publication and several other publications and media outlets. The move comes as the Chinese government continues to punish the company after its founder Jack Ma openly criticized the country’s central banks on policy.
With a $3.2 billion stake in Alibaba, Fisher Asset Management owns 13.9 million shares of the company as of the end of the fourth quarter of 2020. Our database shows that 156 hedge funds held stakes in Alibaba as of the end of the fourth quarter, versus 166 funds in the third quarter. BABA ranks 7th in our list of the 30 Most Popular Stocks Among Hedge Funds: 2020 Q4 Rankings.
Miller Value Partners, in their Q4 2020 investor letter, said that Alibaba Group Holding Limited (NYSE: BABA) was a top detractor for their portfolio in the fourth quarter of 2020. Here is what Miller Value Partners has to say about Alibaba Group Holding Limited in their Q4 2020 investor letter:
“Alibaba (BABA) had quite the quarter rising up to a high of $317 in October only to end the quarter down 20% after the delay of the Ant IPO and the announced investigations by the Chinese government into monopolistic practices at the firm. There was additional pressure on the stock as the US House of Representatives passed a bill that threatens to delist Chinese companies from US exchanges unless US regulators are able to inspect their financial audits within three years. During the quarter, the company increased their share buyback program from $6B to $10B. The company report second quarter FY21 results that were largely in-line with expectations. The company reported revs of Rmb155.1B (USD 23.9B) slightly beating consensus of Rmb 153.9B (USD 23.7B) and adjusted EBITDA of Rmb 47.5B (USD 7.3B) versus 41.3B (USD 6.3B). The company maintained full year guidance for revenues of Rmb 650B (USD 100.3B).”
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Disclosure: None. Billionaire Izzy Englander’s Top 10 Stock Picks is originally published on Insider Monkey.
