In this article, we discuss billionaire Louis Bacon’s 15 long-term stock picks. To skip the details about Mr. Bacon’s life, portfolio performance, and investment strategy, go directly to Billionaire Louis Bacon’s 5 Long-Term Stock Picks.
In the investment world where there are thousands of stocks to choose from, there are myriad paths that investors can choose. While some investors seek to generate optimum returns over a short period, others never shy away from buying and holding for the long haul. Value investing is one strategy that allows investors to pick stocks trading below their intrinsic value and try to squeeze returns as they rerate higher over time.
Investing for the long term has always proved to be an ideal investment strategy on the risk-reward front. For starters, it allows investors to absorb a small amount of risk, unlike investors who try to time the market or day trade over the short term. Long-term investing removes the emotions from the equation as an investor does not have to sit and try to manage a position, let alone worry about short-term swings.
Holding stocks for the long term allows investors to focus on the long-term outlook and viability of the business model instead of the short-term swings. In addition, aligning a portfolio for the long term increases the prospect of making money as one can shun and shrug off short-term swings. In most cases, the portfolio tends to grow in value, especially when aligned with high-quality companies trading below their intrinsic value.
Additionally, buying stocks for the long term allows investors to take advantage of compounding and the ability to reinvest profits for greater returns through share price appreciation, dividends, and buybacks. The peace and tranquility that comes with not worrying whether a portfolio took a dive or exploded overnight is an attribute that often attracts investors to long-term investing.
Louis Bacon is one of the most seasoned investors on Wall Street who has perfected the art of long-term investing and generated significant returns. A graduate of Middlebury College in Virginia, he is one of the most prominent money managers who strive to discover value stocks and invest for the long term to squeeze optimum returns.
His investment approach has been followed by seasoned hedge fund managers, including Warren Buffett of Berkshire Hathaway. Through value investing, the legendary investor picks stocks and waits patiently for their value to appreciate over time. The investment strategy entails determining a stock’s fair value based on its ability to generate future cash flows that would be made available to shareholders through buybacks and dividends.
Once the fair value is ascertained, the focus shifts to ascertaining the margin of safety, which measures the current share price against the fair price. This makes it much easier to determine potential losses in case the investment goes south.
Having founded Moore Capital Management in 1989 with $25,000, the hedge fund generated average annualized returns of 17.6% through 2019 to outside investors. In addition to profiting from long-term value investing, Bacon’s impressive returns in the market also stem from diversifying investments across several securities and sectors.
While having a 13F portfolio of $5.36 billion on Moore Global Investments, Bacon boasts a diversified portfolio. The portfolio offers exposure to technology, services, financials, healthcare, and consumer goods stocks. Spreading investments across various sectors allows the legendary investor to take advantage of the various economic cycles throughout the year. Diversification has also allowed Bacon to shrug off turmoil in one sector with outperformance in other sectors in the race for long-term returns.
The legendary investor also pursues opportunities in the options market by using puts and call options to pursue high-risk reward opportunities. The hedge fund manager focuses on exchange-traded funds with diversified portfolios in the options market.
Our Methodology
Long term investment strategies have always proved their worth on the risk reward front on allowing investors to shrug short term swings. Therefore, after analysing 13F filling we have selected billionaire Louis Bacon’s long-term stock picks that Moore Global Investments has held for an extended periods of time. The stocks are ranked chronologically based on the hedge fund’s stake in them in the third quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Billionaire Louis Bacon’s Long-Term Stock Picks
15. Northern Star Investment Corp. II (NYSE:NSTB)
Louis Bacon’s Stake Value in Q3 2023: $255,250
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: N/A
Northern Star Investment Corp. II (NYSE:NSTB) is a shell company operating in the financial service sector. Northern Star Investment Corp. II (NYSE:NSTB) specializes in effecting mergers, capital stock exchange, asset acquisition stock purchases, and similar business combinations.
Northern Star Investment Corp. II (NYSE:NSTB)’s been one of the holdings in Moore Global Investments portfolio. The hedge fund has held stakes in Northern Star Investment Corp. II (NYSE:NSTB) since the first quarter of 2021 and held stakes worth $255,250 as of the end of Q3 2023.
14. OCA Acquisition Corp (NASDAQ:OCAX)
Louis Bacon’s Stake Value in Q3 2023: $266,000
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: N/A
OCA Acquisition Corp (NASDAQ:OCAX) is a financial services company that affects merger capital stock exchange asset acquisition and stock purchases. OCA Acquisition Corp (NASDAQ:OCAX) is one of billionaire Louis Bacon’s long-term stock picks.
OCA Acquisition Corp (NASDAQ:OCAX) has gained 5% year to date, and Moore Global Investments held shares worth $266,000 in the company as of the end of Q3 2023.
13. Edify Acquisition Corp. (NASDAQ:EAC)
Louis Bacon’s Stake Value in Q3 2023: $270,000
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: N/A
Edify Acquisition Corp. (NASDAQ:EAC) is a financial services company that affects mergers, share exchange assets repurchases and similar business combinations. Edify Acquisition Corp. (NASDAQ:EAC) is one of billionaire Louis Bacon’s long-term stock picks.
Moore Global Investments first bought stocks in Edify Acquisition Corp. (NASDAQ:EAC) in 2021, valued at $2.41 million. The hedge fund has since trimmed its holding in Edify Acquisition Corp. (NASDAQ:EAC) from 250,000 to 25,000 shares valued at about $270,000 as of the end of Q3 2023.
12. Global Partner Acquisition Corp. (NASDAQ:GPACU)
Louis Bacon’s Stake Value in Q3 2023: $1.62 Million
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: N/A
Global Partner Acquisition Corp. (NASDAQ:GPACU) is one of the stocks that Bacon has held on to for long without exiting since the first quarter of 2021. Global Partner Acquisition Corp. (NASDAQ:GPACU) specializes in effecting mergers, share exchange, asset acquisition, and other similar business combinations.
Global Partner Acquisition Corp. (NASDAQ:GPACU) has gained 6.54% since Moore Global Investments first acquired stakes. The hedge fund held 150,000 shares in the company, a drop from the 350,000 that the it bought in Q1 2021.
11. Two (NYSE:TWOA)
Louis Bacon’s Stake Value in Q3 2023: $2.62 Million
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: N/A
two (NYSE:TWOA) is one of billionaire Louis Bacon’s long-term stock picks for diversifying Moore Global Investments portfolio into the financial services sector. two (NYSE:TWOA) specializes in effecting mergers, capital stock exchange, and asset acquisition.
Since two (NYSE:TWOA) was incorporated in 2021, Bacon has held stakes following acquiring 250,000 shares. The billionaire investor only sold 100 shares in two (NYSE:TWOA) in Q2 2023. In Q3 2023 the hedge fund held 249,900 shares of two (NYSE:TWOA) valued at about $2.62 million. The stock has gained 5% year to date.
10. 7GC & Co. Holdings Inc. (NASDAQ:VII)
Louis Bacon’s Stake Value in Q3 2023: $3.04 Million
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: N/A
7GC & Co. Holdings Inc. (NASDAQ:VII) was a SPAC traded on Nasdaq as VII and backed by 7GC & Co Sarl, a tech fund in San Francisco and Berlin, and Hennessy Capital LLC, a SPAC sponsor in Wyoming and California. Its CEO was Jack Leeney and its CFO was Christopher Walsh.
On December 15, 7GC & Co. Holdings Inc. (NASDAQ:VII) and Banzai International, Inc. (NASDAQ:BNZI), a marketing tech company, closed their merger. The new company is called “Banzai International, Inc.” and will trade on Nasdaq as “BNZI” for common stock and “BNZIW” for warrants. 7GC shareholders approved the merger on December 13, 2023.
Moore Global Investments held stakes worth $3.04 million in 7GC & Co. Holdings Inc. (NASDAQ:VII) in the third quarter of 2023. The hedge fund first bought stakes in the firm in the first quarter of 2021.
9. Netflix, Inc. (NASDAQ:NFLX)
Louis Bacon’s Stake Value in Q3 2023: $6.66 Million
First Purchase: 2019 – Q4
Number of Hedge Fund Holders: 102
Netflix, Inc. (NASDAQ:NFLX) has proved to be a solid long-term investment play as a communication services company that offers entertainment services. Netflix, Inc. (NASDAQ:NFLX) is best known for its online streaming service, which features TV series, feature films, and mobile games.
Netflix, Inc. (NASDAQ:NFLX) has been on an impressive run, rallying 63% year to date. Moore Global Investments held stakes worth $6.6 million in Netflix, Inc. (NASDAQ:NFLX) as of Q3 2023.
By the end of Q3 2023, Insider Monkey reported that 102 of the 910 hedge funds it tracked invested in Netflix, Inc. (NASDAQ:NFLX). The biggest hedge fund shareholder of Netflix was Fisher Asset Management , managed by Ken Fisher, with a $1.5 billion position.
8. CME Group Inc. (NASDAQ:CME)
Louis Bacon’s Stake Value in Q3 2023: $9.01 Million
First Purchase: 2010 – Q4
Number of Hedge Fund Holders: 53
CME Group Inc. (NASDAQ:CME) is a financial services company that operates contract markets worldwide for trading futures and options on futures contracts. CME Group Inc. (NASDAQ:CME) also offers clearing house services, including clearing, settling, and guaranteeing futures and options contracts and cleared swaps products traded through its exchanges.
CME Group Inc. (NASDAQ:CME) is one of billionaire Louis Bacon’s long-term stock picks, having gained over 260% ever since Bacon first invested in 2010. CME Group Inc. (NASDAQ:CME)’s also up by about 27% for the year, outperforming the S&P 500 by 21%. Bacon held stakes worth $9 million in the company as of the end of Q3 2023.
According to Insider Monkey’s third quarter database, 53 hedge funds were bullish on CME Group Inc. (NASDAQ:CME), down from 55 in the last quarter. Guardian Capital’s GuardCap Asset Management is the top stakeholder of CME Group Inc. (NASDAQ:CME), with 4.04 million shares, valued at approximately $808 million.
Here is what VGI Partners said about CME Group Inc. (NASDAQ:CME) in its second quarter 2023 investor letter:
“CME Group Inc. (NASDAQ:CME) operates futures and derivatives exchanges, including the Chicago Mercantile Exchange, the New York Mercantile Exchange, the Chicago Board of Trade, and the Dow Jones Index Services. On top of this, CME also owns other key assets related to foreign exchange trading & infrastructure and a strategic shareholding in Standard & Poor’s (S&P) Index business.…” (Click here to read the full text)
7. CONX Corp. (NASDAQ:CONX)
Louis Bacon’s Stake Value in Q3 2023: $15.62 Million
First Purchase: 2021 – Q1
Number of Hedge Fund Holders: 11
Littleton, Colorado-based CONX Corp. (NASDAQ:CONX) is a financial services company focusing on effecting mergers, capital stock exchange, asset acquisition, and stock purchases. CONX Corp. (NASDAQ:CONX) also pursues acquisitions of technology, media, and telecommunication industries.
CONX Corp. (NASDAQ:CONX) remains one of billionaire Louis Bacon’s long-term stock picks, Moore Global Investments, having acquired 1.5 million shares in the company in Q1 2021. The hedge fund had not sold a single share in CONX Corp. (NASDAQ:CONX) as of the end of Q3 2023, valued at about $15.62 million.
CONX Corp. (NASDAQ:CONX) has gained 7% year to date. As of the end of September, 11 hedge funds were bullish about CONX Corp. (NASDAQ:CONX) compared to 12 in the previous quarter. Moore Global Investments was the leading stakeholders in CONX Corp. (NASDAQ:CONX) in the third quarter of 2023.
6. ServiceNow Inc. (NYSE:NOW)
Louis Bacon’s Stake Value in Q3 2023: $15.82 Million
First Purchase: 2020 – Q3
Number of Hedge Fund Holders: 99
ServiceNow, Inc. (NYSE:NOW) is one of Moore Global Investment’s plays in the technology sector and one of billionaire Louis Bacon’s long-term stock picks. ServiceNow, Inc. (NYSE:NOW) specializes in providing enterprise cloud computing solutions and services for enterprises worldwide.
ServiceNow, Inc. (NYSE:NOW) remains one of the best-performing stocks in Bacon’s portfolio, going by the 80% year-to-date gain. Moore Global Investments has been buying and selling shares in ServiceNow, Inc. (NYSE:NOW) since Q3 2020 and held stakes worth $15.82 million as of Q3 2023.
In Q3 2023, 99 hedge funds among the 910 monitored by Insider Monkey included ServiceNow, Inc. (NYSE:NOW) in their portfolios. The largest hedge fund investor in ServiceNow is GQG Partners, managed by Rajiv Jain, with a substantial investment of $831.6 million.
Baron Technology Fund shared its perspective on ServiceNow, Inc. (NYSE:NOW) in the Q3 2023 investor letter, expressing their insights.
“Despite near-term macro uncertainty, it’s important to frame that we find ourselves in the early innings of both the AI investment cycle and overall cloud penetration. We estimate cloud penetration to be between 25% and 30% versus the likely 70% to 75% level over time, if not even higher. AI deployments are literally just getting off the ground.Infrastructure and development platforms for securely storing and curating data, training and fine-tuning large-language and other AI models, and developing and delivering AI applications. Beneficiaries include Microsoft Azure and Amazon Web Services. Integration of generative AI capabilities, such as AI agents and copilots, directly into existing product offerings and customer workflows. Software vendors capitalizing on this opportunity includes ServiceNow, Inc.“
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Disclosure: None. Billionaire Louis Bacon’s 15 Long-Term Stock Picks is originally published on Insider Monkey.
