In this article, we discuss the 10 top stock picks of billionaire Stan Druckenmiller.
When it comes to growth offerings, there are few money managers on Wall Street whose opinion carries more weight on the matter than Stanley Druckenmiller, the chief of New York-based investment firm Duquesne Capital. Druckenmiller oversees a 13F portfolio at his hedge fund that was worth close to $3 billion at the end of the second quarter of 2024. As the AI craze sweeps Wall Street, Druckenmiller has outlined his bullish long-term thesis on the new technology, recently appearing in a program on news platform CNBC to claim that the AI revolution was bigger than the excitement around blockchain, the internet, or other previous tech-related breakthroughs in the recent past.
During his appearance on the show, the billionaire noted that anybody who was talking about the internet back in 1999, before the advent of high-speed wireless connections and smart devices, could not have estimated that it would become as big as it did in the twenty or so years since that time. He further highlighted how the NASDAQ, the tech-heavy benchmark index, plunged 80% during the dotcom crisis at the turn of the millennium before offering investors handsome returns in the long-term. The money manager compared this to the AI universe and said that with the capital spending on the new tech, the big payoff in the sector might take four or five years to materialize.
Druckenmiller further added that AI was a trend like he had never seen before but cautioned listeners that he was not Warren Buffett and did not own things for 20 years – a reference to the long term investing strategy of the Oracle of Omaha. The remarks were in defense of his 13F activity during the first quarter of 2024. The billionaire told CNBC that he needed a break from some AI-focused positions because there had been a hell of a run, and a lot of what his fund recognized had become recognized by the marketplace. However, Drucknemiller clarified that he remained bullish on AI in the long-term.
Our Methodology
For this article, we scanned the stock portfolio of Duquesne Capital according to the 13F filings submitted at the end of the second quarter of 2024. We selected the top 10 stocks from this portfolio. 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).
Stan Druckenmiller
Top Stock Picks of Billionaire Stan Druckenmiller
10. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 69
Duquesne Capital’s Stake: $69,618,000
Teck Resources Limited (NYSE:TECK) is a diversified metals and mining firm. It is one of the most prominent and long-term holdings of Duquesne Capital. The hedge fund first disclosed a stake in the firm back in the third quarter of 2020. That holding comprised nearly 666,000 shares. Since then, Druckenmiller has been bullish on the company, taking his stake in the firm to more than 5 million shares at the end of 2023. However, since then, the billionaire has been shedding the stock steadily, reducing stakes by 17% and 68% in the first and second quarter of 2024 respectively. The stake presently accounts for 2.38% of the 13F portfolio of the hedge fund.
Investment advisors are in agreement with Druckenmiller over Teck Resources Limited (NYSE:TECK). Scotiabank has an Outperform rating on the stock with a price target of C$78. In an investor note, the advisory highlighted that the firm had lowered its near-term commodity price outlook to reflect the impact of weaker global demand, which seemed to be more than offsetting supply-side challenges.
9. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 70
Duquesne Capital’s Stake: $90,118,000
Philip Morris International Inc. (NYSE:PM) is a company that makes and sells cigarettes in more than 180 countries across the world. Late last month, the firm posted earnings for the second quarter of 2024, reporting earnings per share of $1.59, beating market expectations by $0.03. The revenue over the period was $9.4 billion, up over 5.5% year-on-year and beating analyst estimates by $280 million. The diluted EPS is forecast to be in a range of $5.89 to $6.01, at prevailing exchange rates, versus reported diluted EPS of $5.02 in 2023.
Philip Morris International Inc. (NYSE:PM) is one of the most followed stocks on Wall Street. Barclays recently raised the price target on the shares to $130 from $110 and kept an Overweight rating on the stock. In an investor note, the advisory shared that tobacco stocks had a strong Q2 as market multiples were set not on what was happening now, but on what could happen in the terminal year.
8. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 41
Duquesne Capital’s Stake: $134,185,000
Kinder Morgan, Inc. (NYSE:KMI) operates as an energy infrastructure company primarily in North America. Many investors are focusing on the nuclear aspect of AI data center power needs. However, natural gas is also expected to play an important role in the generation of new electricity that is needed for data centers of the future. The company has a solid financial profile with an impressive dividend history. The firm is in prime position to capitalize on the AI data center boom as it controls more than 66,000 miles of natural gas pipelines that move 40% of the natural gas throughout the United States.
Last month, Argus analyst Bill Selesky upgraded Kinder Morgan, Inc. (NYSE:KMI) stock to Buy from Hold with a $24 price target. In an investor note, the analyst detailed that the Q2 EPS growth of the firm reflected increased earnings results from the Natural Gas Pipelines, Products Pipelines, and Terminals segments. He further added that the company was positioned for accelerating growth in the near term as demand for natural gas continued to increase in consumer, commercial, manufacturing and industrial applications.
7. Woodward, Inc. (NASDAQ:WWD)
Number of Hedge Fund Holders: 41
Duquesne Capital’s Stake: $166,399,000
Woodward, Inc. (NASDAQ:WWD) designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide. The company recently released earnings for the second quarter of 2024. Several important figures stood out from the rest, like 16% sales growth, 63% net earnings growth, and improved free cash flow, mostly driven by aerospace and industrial segment performance. This strong performance also led to an upward revision of financial guidance, with increased revenue and free cash flow estimates for the full year. In the earnings report, the firm lifted the lower end of the revenue guidance by $100 million to more than $3.2 billion and the higher end of the range by $50 million.
Expert investment advisors have been closely following the growth story of Woodward, Inc. (NASDAQ:WWD). Truist recently upgraded the stock to Buy from Hold with a price target of $187, up from $152. In an investor note, the advisory noted that with China natural gas engine sales effectively removed from expectations, and taking into consideration the recent stock pullback, it was now the time to get off the sidelines as the firm was a compelling way to play the expected production ramp of narrow body aircraft.