In this article, we discuss the top 10 long-term stock picks of billionaire Louis Bacon.
Louis Bacon is one of the most prominent and successful hedge fund managers of his generation, known for his astute macroeconomic insights and ability to navigate volatile markets. As the founder of Moore Capital Management, Bacon built a reputation for delivering exceptional returns while maintaining a disciplined approach to risk management. Louis Moore Bacon was born in 1956 into a family with roots in business and the outdoors. His father, Louis Turner Bacon, was a businessman and chairman of the Reynolds Securities brokerage firm. These early influences shaped Bacon’s interest in finance and conservation. Bacon attended Middlebury College, where he earned a degree in American Literature, and later pursued an MBA at Columbia Business School, graduating in 1981. His education laid the groundwork for his successful career in trading and investment management.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Bacon started his financial career on the trading desk of Bankers Trust. Later, he joined Shearson Lehman Brothers, where he developed expertise in trading currencies, commodities, and futures. His early experiences as a trader honed his ability to identify macroeconomic trends, a skill that would define his investment strategy. In 1987, Bacon used a $25,000 inheritance to establish his own trading account. His success during the stock market crash of October 1987, when he profited by shorting the market, demonstrated his ability to capitalize on turbulent conditions. In 1989, Louis Bacon founded Moore Capital Management with $25,000 of his own money and $1.6 million in seed capital. The hedge fund focused on global macroeconomic investing, a strategy that involves analyzing and trading based on macroeconomic trends such as interest rates, currencies, and commodities.
Bacon’s success was rapid and significant. In its first year, Moore Capital posted a return of 86%, showcasing Bacon’s skill in navigating volatile markets. Over the decades, Moore Capital became one of the most successful hedge funds in the industry, managing more than $14 billion at its peak. Over three decades, Moore Capital delivered annualized returns of approximately 17%, outperforming most hedge funds. Bacon’s ability to generate profits during financial downturns, such as the 2008 global financial crisis, solidified his reputation as a skilled macro trader. At the end of the third quarter of 2024, the 13F portfolio of the fund was worth more than $5.4 billion with the top holdings in the technology and financial sectors.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected stocks by combing through the 13F portfolio of Moore Global Investments at the end of the third quarter of 2024. Only the companies that have been in the 13F portfolio of the fund consistently for the past three years were selected. These stocks are also popular among other hedge funds. 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).
Billionaire Louis Bacon’s Top 10 Long-Term Stock Picks
10. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
Moore Global Investments’ Stake: $9.3 million
ServiceNow, Inc. (NYSE:NOW) provides end-to-end intelligent workflow automation platform solutions for digital businesses in North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. It is one of the top long-term stock picks of Louis Bacon. At the end of the third quarter of 2024, the fund owned 10,432 shares in the company, representing 0.17% of the portfolio. Bacon has trimmed this stake four times in the past five quarters, with one increase of nearly 80% compared to the previous filing at the beginning of last year. Moore Global Investments has been bullish on the company for many years. The hedge fund first bought a stake in the firm back in the first quarter of 2015.
9. CME Group Inc. (NASDAQ:CME)
Number of Hedge Fund Holders: 63
Moore Global Investments’ Stake: $9.9 million
CME Group Inc. (NASDAQ:CME) empowers market participants worldwide to efficiently manage risk and capture opportunities by enabling clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data. The following factors make this company a worthwhile investment opportunity. Firstly, as per the reports of the third quarter of 2024, the company reported revenue of $1.6 billion and operating income of $1 billion, net income was $913 million, and diluted earnings per common share were $2.50. Moreover, on an adjusted basis, net income was $977 million, and diluted earnings per common share were $2.68. In the third quarter of 2024, Average Daily Volume (ADV) was 28.3 million contracts, including record non-US ADV, with EMEA up 30% and Asia up 28% versus the same period last year, highlighting the global market reach of the company. Lastly, CME Group and Google Cloud have announced the building of a new private Google Cloud region and a co-location facility in Aurora, Illinois. This may add investment worth as this collaboration aims to improve CME Group’s technological infrastructure.
8. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 121
Moore Global Investments’ Stake: $19.3 million
Netflix, Inc. (NASDAQ:NFLX) is a provider of entertainment services, offering TV shows and movies such as original series, documentaries, animated movies, and much more. There are several key elements that position this company as an exceptional choice for investors. Firstly, as per the report of the third quarter of 2024, the operating income increased 52% year over year to $2.9 billion, while the operating margin of 30% improved seven percentage points vs. the year-ago quarter. This was above the guidance forecast due to slightly higher revenue and the timing of spending. Also, the revenue grew 15% year over year, and the operating margin was 30% vs. 22% last year.
7. The Progressive Corporation (NYSE:PGR)
Number of Hedge Fund Holders: 95
Moore Global Investments’ Stake: $20.4 million
The Progressive Corporation (NYSE:PGR) is a company that provides personal and commercial automobile insurance and other specialty property-casualty insurance products and related services. There are several key elements that position this company as an exceptional choice for investors. Firstly, as per the reports of the third quarter of 2024, the reported revenue was $19.7 billion, up 27% from the third quarter of 2023, and net income was $2.35 billion, up 112% from the third quarter of 2023. Secondly, the company’s continued growth in insurance led to more than 10,000 open roles in 2024.
6. Alight, Inc. (NYSE:ALIT)
Number of Hedge Fund Holders: 40
Moore Global Investments’ Stake: $25 million
Alight, Inc. (NYSE:ALIT) is a leading cloud-based human capital technology and services provider that powers confident health, wealth and well-being decisions for 36 million people and dependents. This company stands out as a prime investment opportunity due to multiple compelling factors. Firstly, the improved financial growth, as illustrated in the report for the third quarter of 2024, shows a promising picture. For instance, Business Process as a Service (BPaaS) revenue grew 18.6% to $121 million, representing 21.8% of total revenue. In addition, gross profit was $174 million and gross profit margin was 31.4%, compared to $166 million and 29.8% in the prior year period, respectively, and adjusted gross profit was $200 million and adjusted gross profit margin was 36%, compared to $192 million and 34.5% in the prior year period, respectively. Moreover, the company has completed cloud migration transformation, delivering enhanced performance and significant cost savings, which may attract investors. Another project that may catch investors’ attention is the integration of the Alight LumenAITM engine across the Alight Worklife platform, which would create a cohesive AI ecosystem to deliver innovation.
5. Capital One Financial Corporation (NYSE:COF)
Number of Hedge Fund Holders: 67
Moore Global Investments’ Stake: $27.2 million
Capital One Financial Corporation (NYSE:COF) is a bank holding company specializing in credit cards, auto loans, banking, and savings accounts. There are several key elements that position this company as an appealing choice for investors. Firstly, promising financial growth is depicted in the report for the third quarter of 2024. For instance, as illustrated in the report, net income was $1.8 billion, or $4.41 per diluted common share, compared with net income of $597 million, or $1.38 per diluted common share in the second quarter of 2024, and with net income of $1.8 billion, or $4.45 per diluted common share in the third quarter of 2023. Secondly, Capital One Financial Corporation and Discover Financial Services have entered into a definitive agreement under which Capital One will acquire Discover in an all-stock transaction valued at $35.3 billion. Moreover, the company plans a community benefit scheme that commits more than $265 billion in lending, investment, and philanthropy over five years as part of its proposed acquisition of Discover Financial Services.
4. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Moore Global Investments’ Stake: $36.9 million
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The following are the key factors that make this company a top choice for investors. Firstly, increasing net sales along with operating income increase, as depicted in the report for the third quarter of 2024, paints an appealing picture for investors. As per the reports, net sales increased 11% to $158.9 billion in the third quarter, compared with $143.1 billion in the third quarter of 2023, and operating income increased to $17.4 billion in the third quarter, compared with $11.2 billion in the third quarter 2023. Secondly, the company has opened a walk-in center in Cape Town, South Africa, to help sellers reach their target market and grow their businesses. Furthermore, Amazon co-founded The Climate Pledge in 2019 to achieve net-zero carbon emissions by 2040. For this reason, they are expanding the use of zero-emission transportation such as electric delivery vans, cargo e-bikes, and on-foot deliveries, and engaging in industry initiatives to remove carbon emissions from transportation systems like ocean shipping, aviation, and trucking that may attract investors who are seeking to invest in companies with sustainable development approach.
3. Global Payments Inc. (NYSE:GPN)
Number of Hedge Fund Holders: 66
Moore Global Investments’ Stake: $37.4 million
Global Payments Inc. (NYSE:GPN) is a multinational financial technology company that provides payment technology and services to merchants, issuers and consumers. The first thing that makes Global Payments worth investing in is its consistent and commendable financial growth. As per the reports of the third quarter of 2024, GAAP revenue was $2.60 billion, showing an increase of 5%, and adjusted net revenue was $2.36 billion, portraying an increase of 6%. In addition, Global Payments’ Board of Directors approved a dividend of $0.25 per share. The Board of Directors also approved an increase in the company’s share repurchase authorization capacity to $2.5 billion. Secondly, a joint venture between Global Payments and Commerzbank offers digital payment solutions to small and medium-sized business customers across Germany. This may hold worth for investors as it is expected to enhance Global Payments’ presence in the European market and offer innovative solutions to merchants. Moreover, another collaboration between PayPal and Global Payments aims to simplify the checkout process for US merchants, offering consumers ease.
2. The Allstate Corporation (NYSE:ALL)
Number of Hedge Fund Holders: 62
Moore Global Investments’ Stake: $45.7 million
The Allstate Corporation (NYSE:ALL) is one of the largest publicly held personal lines insurers in the United States. There are several key elements that position this company as an appealing choice for investors. Firstly, promising financial growth is depicted in the report for the third quarter of 2024. For instance, total revenues of $16.6 billion in the third quarter of 2024 were $2.1 billion or 14.7% above the prior-year quarter, driven by increased Property-Liability earned premium. Revenues increased by almost 15% from the prior year, net income was $1.2 billion for the quarter, and adjusted net income return on equity was 26.1% for the prior twelve months. Secondly, the company has launched two new investment funds, including a long-term strategic fund that aims to protect the parent company against future risks such as climate change.
1. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 56
Moore Global Investments’ Stake: $135.9 million
Ally Financial Inc. (NYSE:ALLY) is a holding company that provides digital financial services to consumers, businesses, automotive dealers, and corporate clients. The following factors make Ally Financial a highly attractive investment. Firstly, the report for the third quarter of 2024 presents a compelling picture for investors as it shows robust financial growth. For instance, GAAP Earnings per Share (EPS) of $1.06 and Adjusted EPS of $0.95 were up $0.18 and $0.12 year over year, respectively. Also, the pre-tax income of $233 million was up by $5 million year over year. Secondly, Ally also became a presenting partner of the US Women’s Open, which holds potential for investors as it would enhance the company’s brand visibility and demonstrate a commitment to diversity. Moreover, the company’s modernization efforts across technology domains are commendable, including artificial intelligence, customer relationship management (CRM), and others.
While we acknowledge the potential of Ally Financial Inc. (NYSE:ALLY) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than Ally Financial Inc. (NYSE:ALLY) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
