In this article we will take a look at billionaire Paul Tudor Jones’ top 10 stocks picks. If you want to skip our discussion about Paul Tudor Jones’ investment philosophy, his thoughts on Bitcoin and his history, go directly to billionaire Paul Tudor Jones’ top 5 stocks picks.
Hedge fund manager Paul Tudor Jones, founder of Tudor Investment Corporation, is considered one of the pioneers of the current hedge fund industry. With over $5.1 billion net worth, PTJ is known for predicting the Black Monday collapse of 1987. Tudor teaches an undergrad class at the University of Virginia.
He uses 200-day moving average of closing prices to evaluate market trends. Paul advises against contrarian investing.
Paul began his career in commodities trading before forming the Tudor Group in 1980. After four decades, Tudor has grown into a global investment firm.
On a side note, billionaire Tudor Jones was one of the hedge fund managers who believed in Bitcoin and backed the digital currency last December. He thinks that Bitcoin is hard to value and is similar to what the internet was during its early stages where no one was able to correctly predict its value due to the possibility that lay ahead.
Earlier last year, he included Bitcoin on his list of inflation hedges and considered it “the fastest horse” in the race to beat inflation. According to Jones, Bitcoin scored far better profitability and liquidity levels versus its asset peers, and was extremely undervalued on a market cap outstanding basis relative to other asset classes as a hedge against inflation.
Jones traded Bitcoin for the first time in 2017. At that time he doubled his invested money before exiting the trade near the peak price of the cryptocurrency at $20,000. However, in 2020, he considered Bitocin as a store of value and inflation hedge.
He stated:
“The most compelling argument for owning Bitcoin is the coming digitization of currency everywhere, accelerated by COVID-19.”
The digital currency had advanced more than 300% in 2020 and is currently trading above $45,000. Moreover, analysts think that the resurgence of the cryptocurrency last year was mainly driven by the endorsement of institutional investors which gave confidence to retail investors in this asset class. Jones’ statements on Bitcoin may have been among the catalysts that pushed its price towards new high levels.
Tudor Investment Corporation has disclosed 1,238 total holdings in their latest SEC filings, as of the end of the third quarter. The market value of the fund holdings was estimated at nearly $2.30 billion, with major investments in consumer services and technology stocks. Those sectors represented 18.3% and 15.4% of the fund respectively.
Let’s take a look at billionaire Paul Tudor Jones’ top 10 stock picks.
10. Natura &Co Holding S.A. (NYSE: NTCO)
Tudor has a history of taking positions in derivatives of Natura & Co. (NYSE: NTCO) in the form of stock options. As of the end of the third quarter, he held put options on 900,000 shares constituting 0.7% of his overall portfolio. The position remained unchanged during the quarter and the company was the tenth largest holding of TJP. Natura & Co. (NYSE: NTCO), a multinational cosmetics, hygiene and beauty company, posted strong revenue growth during the third quarter of 2020. However its share value decreased by 18% during the last twelve months. The company is significantly outperforming the global Cosmetics, Fragrance, and Toiletries market. In fact, it managed to raise its capital by an additional $1 billion during October 2020.
During 2020, the company took another step forward in its digitalization process and successfully launched &Co Pay, which represents its proprietary financial services platform helping consultants and representatives achieve higher productivity. &Co Pay was initially launched in Latin America, and is expected to roll out globally within the next years.
9. Keurig Dr Pepper Inc. (NASDAQ: KDP)
Keurig Dr Pepper Inc. (NASDAQ: KDP) shares witnessed an 11.46% appreciation in price during the last twelve months. Paul Tudor Jones has initiated a position in the company during the third quarter of 2020 with a market value of $19.544 million. About 0.8% of Tudor’s portfolio was allocated to KDP, which is an integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States, Mexico and Canada.
KDP benefited during the prior year from the shift in consumer behavior following the emergence of COVID-19 and the strong growth in at-home coffee consumption. This new customer behavior is expected to increase the company’s market share during the coming periods. For that matter, Keurig Dr Pepper is investing in its e-commerce operations and its distribution platforms.
Keurig Dr Pepper pays an annual dividend of $0.60 per share and currently its dividend yield is 1.81%. The company has a market cap of $44.75 billion. Its revenue increased by 66% over the last three years.
Diluted earnings per share were steadily increasing during 2020, recording $0.29, $0.38 and $0.43 per share, respectively, for the first, second and third quarter of 2020.
Oakmark Fund, in their Q3 2020 Investor Letter, highlighted a few stocks and Keurig Dr Pepper Inc. (NASDAQ:KDP) was one of them. Here is what Oakmark Fund stated:
“Keurig Dr Pepper is one of North America’s leading beverage companies and commands dominant positions in single-serve coffee and flavored sodas. We believe single-serve coffee pods will capture almost all of the incremental growth in at-home coffee consumption because coffee drinkers increasingly prefer K-Cups over drip brewing due to its greater convenience, quality, variety and value. Keurig’s competitive advantages (low-cost production, the largest installed base of brewers, exclusive brand partnerships) allow it to collect a toll on most pods sold in North America. The company’s soda franchises remain highly profitable, and we do not expect health-related concerns about sugar to materially impact consumption trends. We believe that Keurig’s brands should deliver steady growth, consistent market share gains and significant excess cash. We think the company is an above-average business trading at a meaningful discount to the broader market, its beverage peers and historical private market transactions.”
8. Kingsoft Cloud Holdings Limited (NASDAQ: KC)
Ranking 8th on billionaire Paul Tudor Jones’ top 10 stock picks list is Kingsoft Cloud Holdings Limited (NASDAQ: KC), which is a recent Nasdaq IPO that provides cloud services to businesses and organizations in China. Since going public in May 8, 2020, KC shares showed a 146% price appreciation and its price is still reaching new high levels.
Paul Tudor Jones increased his position during the third quarter of 2020. The stake is valued at $20.175 million constituting 0.9% of the portfolio.
As the number of Chinese companies adopting multi-cloud strategies is increasing, KC has a substantial potential to grow over the medium to long run since it is the largest independent cloud service provider in China.
The company reported a 12.6% increase in revenues during the third quarter of 2020, compared to the second quarter, while EPS is still in the negative zone.
7. Apple Inc. (NASDAQ: AAPL)
Apple (NASDAQ: AAPL) was the seventh stock on the top 10 holdings list of Paul Tudor Jones. By allocating 1% of the portfolio to the i-products manufacturer, the position has been boosted by 316%, ending the quarter with a market value $23.042 million.
Year-to-date, Apple stock gained 70.54% and on January 29th it had a closing price of $131.96. Shares of Apple split on August 31st 2020. An investor having 1 share of Apple stock prior to the split would have 4 shares after the split.
The tech giant has been increasing its dividend for 8 consecutive years paying an annual dividend of $0.82 per share and currently has a dividend yield of 0.58%.
Apple was the first publicly traded company to reach a $1 trillion market cap. Moreover, during the third quarter, Apple hit a market cap of $2 trillion, surpassing the state oil giant Aramco and became the world’s most valuable publicly traded company on top of being the first publicly traded U.S. company to reach a $2 trillion market cap.
Alger Spectra Fund, in their Q3 2020 Investor Letter, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what Alger Spectra Fund stated:
“Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. This tight engagement is facilitating significant growth in high-margin services like streaming music. apps. and Apple Pay. Apple’s continued development of high-margin services and earnings streams for wearable devices as well as the potential contribution of 5G phones to the company’s growth supported the performance of Apple shares.”
6. National General Holdings Corp. (NASDAQ: NGHC)
PTJ initiated a position in National General Holdings Corp. (NASDAQ:NGHC) during the third quarter of 2020. The stock has a weight of 1.41% in the portfolio as stated in Tudor’s 13F portfolio.
Shares of National General Holdings Corp. (NASDAQ: NGHC) increased by only 8% in the last twelve months.
The company is a specialty personal lines insurance holding company and it has focused recently on growing organically through the introduction of new products to cater to market demand.
On January 4, 2021, The Allstate Corporation (NYSE: ALL) announced that it closed its $4 billion acquisition of National General Holdings Corp.
“The acquisition of National General advances our strategy of growing personal lines insurance with an increase of 1 percentage point in market share. Independent agents will now have more protection offerings for customers, with a strong technology platform creating growth opportunities for them and Allstate…”
The merger agreement stated that each NGHC shareholder will be entitled to a cash contribution of $34.50 per share (comprised of $32.00 and a $2.50 special dividend to holders immediately prior to the effective time).”
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Disclosure: None. Billionaire Paul Tudor Jones’ Top 10 Stock Picks is originally published at Insider Monkey.
