Below is billionaire Louis Bacon’s top 5 stock picks that helped his hedge fund in generating massive gains in 2020. For a comprehensive list see Billionaire Louis Bacon’s Top 10 Stock Picks.
5. Bunge Limited (NYSE: BG)
Billionaire Louis Bacon has been bullish on Bunge Limited (NYSE: BG) over the years. The hedge fund first initiated a position in Bunge in 2017 and it accounted for 2.46% of the overall portfolio at the end of the September quarter.
Shares of Bunge Limited rallied 29% in the last twelve months despite experiencing a massive selloff early in 2020. Most of the share price apperception occurred during the final quarter of 2020 as the chief executive officer Greg Heckman claims that the turnaround phase of its strategy is completed and is seeing financial performance improvement is the day ahead. Bunge Limited operates as an agribusiness and food company worldwide. The company expects adjusted earnings per share for 2020 in the range of $7.00.
4. Amazon.com (NASDAQ: AMZN)
The New York-based hedge fund has sold 30% of its Amazon (NASDAQ: AMZN) position during the third quarter to capitalize on the stunning share price rally. Despite that, Amazon accounted for 2.46% of the overall portfolio at the end of the September quarter. Shares of Amazon rose close to 67% in the last twelve months.
L1 Capital International Fund, which returned 5.1% for the third quarter, highlighted bullish aspects of Amazon in an investor’s letter. Here is what L1 Capital stated:
“Several investments in the technology sector were trimmed on valuation grounds with the proceeds used to increase our investment in Amazon. Amazon’s successful flywheel business model and Amazon Web Services are well known. However, we believe the current share price under‑appreciates:
– The consistency and longevity of Amazon’s growth potential in its key businesses;
– The importance of additional revenue streams such as advertising which are high margin and growing rapidly; and
– The strengthening barriers to competition and competitive advantages arising from Amazon’s stepped‑up investment in logistics and other infrastructure.”
3. Fisker Inc. (NYSE: FSR)
Louis Bacon’s Moore Capital has also expressed confidence in electric vehicle manufacturer Fisker Inc. (NYSE: FSR) during the third quarter. The firm has bought 9.4 million shares of Fisker valued at $145 million.
Electric vehicle stocks have been performing well since Joe Biden’s presidential election win. Joe Biden’s focus on clean energy policy has been supporting EV stocks over the past two months. In addition, the global demand prospects are also strengthening as the majority of European countries plan to ban fossil fuel vehicle production in the next decade.
2. iShares MSCI Emerging Markets ETF (NYSEARCA: EEM)
Moore Capital’s strategy of initiating a position in iShares MSCI Emerging Markets ETF (NYSEARCA: EEM) worked for the hedge fund. This is because the Emerging Markets ETF rallied more than 20% in the last three months.
iShares MSCI Emerging Markets fund invests money in equity markets of the global emerging region, with the main focus of investments in companies operating across diversified sectors. In addition to returns through share price gains, EEM also offers dividends to investors. The dividend yield currently hovers above 1%.
1. Alibaba Group Holding Limited (NYSE: BABA)
Louis Bacon’s hedge fund has raised its stake by 54% in Alibaba Group Holding Limited (NYSE: BABA) during the September quarter to 6.22% of the overall portfolio. Shares of Alibaba performed well during the second and third quarter of 2020, but regulatory pressure weighed on its stock price in the last three months.
Alger Spectra Fund has also highlighted strong confidence in the Chinese e-commerce giant in an investor’s letter. Here is what Alger Spectra Fund stated:
“Alibaba is the dominant e-commerce platform in the Chinese economy, where e-commerce remains underpenetrated and fast-growing. It is also a leading player in China’s cloud computing, big data analytics. digital media and entertainment markets. The performance of shares of Alibaba reflects investor excitement about its ability to exploit the large addressable market opportunities in e-commerce and cloud computing because of state-enacted barriers blocking foreign competitive entry.
Additionally, the accelerating pace of consumer spending in China is one of the world’s greatest growth stories and Alibaba is a prime beneficiary.
Please also see Billionaire Stephen Mandel’s Lone Pine Is Embracing The Tech Revolution and 15 Best Undervalued Stocks to Buy Now
Disclosure: None.