In this article, we take a look at billionaire Richard Chilton’s portfolio: Microsoft (MSFT), Home Depot (HD) and more. If you want to skip our detailed analysis of Mr. Chilton’s stock picks, go directly to Billionaire Richard Chilton’s Top 5 Stock Picks.
Richard Chilton is an American entrepreneur and investor. The billionaire founded his hedge fund, Chilton Investment Company, in 1992. As of the second quarter of 2021, Mr. Chilton actively manages over $3.97 billion in 13F securities through his investment management firm. Richard Chilton’s original strategy was to generate lucrative long-term returns with limited volatility.
Richard Chilton is an agile investor, he readily drops and picks stocks depending on changing market trends. The billionaire has picked up his skills from some of the biggest names in the world, such as Merrill Lynch, Alliance Capital, and Allen & Company. Chilton Investment Company makes use of a bottom-up approach when it comes to investing. The fund prefers long/short and long-only investments with the notion of preserving its capital in poor market conditions.
Taking a look at Chilton’s second-quarter holdings, we can see that the billionaire owns more than a million shares in the software giant Microsoft Corporation (NASDAQ:MSFT), amounting to a total stake value of $273.4 million. This September, Barclays analyst Raimo Lenschow raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $345 from $330 and reiterated an Overweight rating on the shares.
The billionaire also held a significant stake in The Home Depot, Inc. (NYSE:HD) at the end of the second quarter of 2021. According to the latest 13F filings, The Home Depot, Inc. (NYSE:HD) covers an impressive 5.79% of Mr. Chilton’s investment portfolio. The American business magnate owns a little above 720,000 shares in The Home Depot, Inc. (NYSE:HD) that amount to a total stake value of $230.3 million.
Why should we pay attention to Richard Chilton’s stock picks? 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 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). 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.
Our Methodology
With this context in mind, here is our list of stocks in the billionaire’s portfolio. These were ranked according to the investment portfolio of Chilton Investment Company at the end of the second quarter of 2021. The analyst ratings of each company are also discussed to provide readers with some more context so they can make informed investment decisions.
Billionaire Richard Chilton’s Portfolio: Microsoft (MSFT), Home Depot (HD) and More
10. Republic Services, Inc. (NYSE:RSG)
Richard Chilton’s Stake Value: $145,409,000
Percentage of Richard Chilton’s 13F Portfolio: 3.65%
Number of Hedge Fund Holders: 34
Republic Services, Inc. (NYSE:RSG) together with its subsidiaries, provides non-hazardous solid waste collection, transfer, disposal, recycling, and environmental services in the United States. The company serves small-container, large-container, and municipal and residential customers. Republic Services, Inc. (NYSE:RSG) was incorporated in 1996 and is based in Phoenix, Arizona.
This August, Goldman Sachs analyst Jerry Revich added Republic Services, Inc. (NYSE:RSG) to the firm’s Conviction List and reiterated a Buy rating on the shares. The analyst raised the price target on Republic Services, Inc. (NYSE:RSG) to $147, up from $138.
Republic Services, Inc. (NYSE:RSG) is ranked tenth on Richard Chilton’s 13F portfolio. As of June 2021, the billionaire owns 1.32 million shares in the company, worth $145.4 million. The investment represents 3.65% of Chilton Investment Company’s investment portfolio.
By the end of the second quarter of 2021, 34 hedge funds out of the 873 tracked by Insider Monkey held stakes in Republic Services, Inc. (NYSE:RSG) worth about $1.28 billion. This is compared to 36 hedge funds in the previous quarter with a total stake value of approximately $1.07 billion.
Republic Services, Inc. (NYSE:RSG), Microsoft Corporation (NASDAQ:MSFT), The Sherwin-Williams Company (NYSE:SHW), Ball Corporation (NYSE:BLL), and The Home Depot, Inc. (NYSE:HD) are among the top stocks picked by billionaire Richard Chilton.
9. Mastercard Incorporated (NYSE:MA)
Richard Chilton’s Stake Value: $161,046,000
Percentage of Richard Chilton’s 13F Portfolio: 4.05%
Number of Hedge Fund Holders: 156
Mastercard Incorporated (NYSE:MA) provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers related products and services. Mastercard Incorporated (NYSE:MA) was founded in 1966 and is headquartered in New York.
This August, JPMorgan analyst Tien-tsin Huang raised his price target on Mastercard Incorporated (NYSE:MA) to $430 from $427 and kept an Overweight rating on the shares.
Mastercard Incorporated (NYSE:MA) is among the top ten stocks that came to Mr. Chilton’s attention. According to the latest filings, the billionaire has stakes of more than $161 million in the company. Mastercard Incorporated represents 4.05% of Mr. Chilton’s investment portfolio.
As of the second quarter of 2021, Mastercard Incorporated (NYSE:MA) reported earnings per share of $1.95, beating expert estimates by $0.20. The company beat revenue estimates by $160.7 million and generated $4.53 billion in revenues, up 35.77% year over year.
By the end of the second quarter of 2021, 156 hedge funds out of the 873 tracked by Insider Monkey held stakes in Mastercard Incorporated (NYSE:MA) worth about $17.1 billion. This is compared to 151 hedge funds in the previous quarter with a total stake value of approximately $17 billion.
Like Microsoft Corporation (NASDAQ:MSFT), The Sherwin-Williams Company (NYSE:SHW), Ball Corporation (NYSE:BLL), and The Home Depot, Inc. (NYSE:HD), Mastercard Incorporated (NYSE:MA) is a stock worth investing in according to Mr. Chilton.
Qualivian Investment Partners, an investment management firm, published its second-quarter 2021 investor letter in which the firm shared its stance on Mastercard Incorporated (NYSE:MA). Here’s what they had to say:
“Mastercard: Q2 revenue and EPS beat consensus estimates by 3.7% and 12% respectively. Operating margins also beat consensus by +240 bps. Gross domestic volume growth of +38.3% (+32.8% in constant currency) was buttressed by continued e-commerce strength and better in-store performance, while purchase volumes grew 41.8% (35.5% in constant currency). Cross border performance was strong, but durability remains uncertain given uncertainty arising from the Delta variant and its impact on travel and tourism. We believe Mastercard has a robust runway for growth given further travel recovery, new/existing partnerships, traction in digital payments, and ongoing economic recovery.”
8. Costco Wholesale Corporation (NASDAQ:COST)
Richard Chilton’s Stake Value: $166,991,000
Percentage of Richard Chilton’s 13F Portfolio: 4.19%
Number of Hedge Fund Holders: 54
Costco Wholesale Corporation (NASDAQ:COST), together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. Costco Wholesale Corporation (NASDAQ:COST) was founded in 1976 and is based in Issaquah, Washington.
This September, Citi analyst Paul Lejuez raised his price target on Costco Wholesale Corporation (NASDAQ:COST) to $495 from $460 and reiterated a Neutral rating on the shares.
Billionaire Richard Chilton owns approximately 422,000 shares in Costco Wholesale Corporation (NASDAQ:COST), amounting to a total stake value of $166.9 million. The investment covers an impressive 4.19% of Chilton’s 13F portfolio.
By the end of the second quarter of 2021, 54 hedge funds out of the 873 tracked by Insider Monkey held stakes in Costco Wholesale Corporation (NASDAQ:COST) worth about $4.32 billion. This is compared to 56 hedge funds in the previous quarter with a total stake value of approximately $4.01 billion.
7. Mettler-Toledo International Inc. (NYSE:MTD)
Richard Chilton’s Stake Value: $169,331,000
Percentage of Richard Chilton’s 13F Portfolio: 4.25%
Number of Hedge Fund Holders: 35
Mettler-Toledo International Inc. (NYSE:MTD) manufactures and supplies precision instruments and services worldwide. The company operates in five segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other. Mettler-Toledo International Inc. (NYSE:MTD) its products through its direct sales force and indirect distribution channels. Mettler-Toledo International Inc. (NYSE:MTD) was incorporated in 1991 and is based in Columbus, Ohio.
This July, Baird analyst Catherine Schulte raised her price target on Mettler-Toledo International Inc. (NYSE:MTD) to $1455 from $1303 and kept a Neutral rating on the shares.
Mettler-Toledo International Inc. (NYSE:MTD) contributes significantly to Chilton’s 13F portfolio. According to the latest 13F filings, Richard Chilton has stakes worth $169.3 million in Mettler-Toledo International Inc. (NYSE:MTD), which covers 4.25% of his investment portfolio.
By the end of the second quarter of 2021, 35 hedge funds out of the 873 tracked by Insider Monkey held stakes in Mettler-Toledo International Inc. (NYSE:MTD) worth about $1.26 billion. This is compared to 27 hedge funds in the previous quarter with a total stake value of approximately $1.04 billion.
Baron Funds, an asset management firm, published its “Baron Asset Fund” second quarter 2021 investor letter in which the firm mentioned Mettler-Toledo International Inc. (NYSE:MTD). Here’s their stance on the company:
“Mettler-Toledo International, Inc. is the world’s largest provider of weighing instruments for use in laboratory, industrial, and food retailing applications. Its shares rose on outstanding financial results, highlighted by 18% local currency sales growth, 49% operating profit growth, and 64% EPS growth, as well as an increase in its full-year earnings guidance. We believe Mettler is an excellent business with meaningful competitive advantages run by skilled operators. We remain optimistic that the company can compound earnings at attractive double-digit rates for years to come.”
6. Kansas City Southern (NYSE:KSU)
Richard Chilton’s Stake Value: $182,265,000
Percentage of Richard Chilton’s 13F Portfolio: 4.58%
Number of Hedge Fund Holders: 61
Kansas City Southern (NYSE:KSU) is a transportation holding company that provides domestic and international rail transportation services in North America. The company serves a ten-state region in the Midwest and southeast regions of the United States and has the shortest north/south rail route between Kansas City, Missouri, and ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi, and Texas. Kansas City Southern (NYSE:KSU) operates a commercial corridor of the Mexican railroad system and has its direct rail passageway between Mexico City and Laredo, Texas. The company serves the chemical and petroleum, industrial and consumer products, agriculture and minerals, energy, intermodal, and automotive markets. Kansas City Southern (NYSE:KSU) was founded in 1887 and is headquartered in Kansas City, Missouri.
Richard Chilton owns a little above 643,000 shares in the company, which amounts to a total stake of $182.26 million.
As of the second quarter of 2021, Kansas City Southern (NYSE:KSU) has reported an EPS of $2.06, missing estimates by -$0.09. The company has generated revenues of $749.5 million, up 36.80% year over year, and has beaten expert estimates by $0.69 million.
By the end of the second quarter of 2021, 61 hedge funds out of the 873 tracked by Insider Monkey held stakes in Kansas City Southern (NYSE:KSU) worth about $3.3 billion. This is compared to 49 hedge funds in the previous quarter with a total stake value of approximately $1.66 billion.
Miller/Howard Investments, an investment management firm, published its first-quarter 2021 investor letter, in which it mentioned Kansas City Southern (NYSE:KSU). Here’s what the firm had to say:
“Canadian Pacific Railway (CP) agreed to acquire Kansas City Southern (KSU) in the largest rail deal in over a decade. The merger will create the first rail network connecting Canada, the US, and Mexico, and it should benefit from the passage of the USMCA Trade Agreement. We initiated a position in KSU in Q4 as we expected it to benefit from growing North American trade and viewed it as a consolidation candidate.”
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Disclosure: None. Billionaire Richard Chilton’s Portfolio: Microsoft (MSFT), Home Depot (HD) and More is originally published on Insider Monkey.
