In this article, we discuss Citrone’s top 15 stock picks. To skip the detailed analysis of Citrone’s hedge fund, go directly to Citrone’s Top 5 Stock Picks.
The S&P 500 finished 2023 on a high, gaining more than 4% in December to finish the year up by about 24%. Outlook for 2024 is also strong amid expectations of rate cuts later in the year.
Discovery Capital Management was one hedge fund that benefited from the impressive gains last year, especially in the technology sector. Founded in 1999 by Rob Citrone, the macro hedge fund is best known for its focus on high-growth stocks in the technology, services, and basic material and financial sectors.
Citrone’s hedge fund has averaged annual returns of about 17% since inception. Therefore, it was always expected to do well at the height of one of the strongest bull runs in recent history. After dropping by 29% in 2022 at the height of the bear run, Discovery Capital Management bounced back in 2023, gaining about 48% and outperforming the S&P 500.
The stellar performance of the $1.5 billion fund was fueled mainly by its long bets in high-growth stocks, sovereign bonds in Latin America, and US credit. The hedge fund also benefited from its long and short wagers on financial stocks. Strong stock-picking skills also played a role in allowing Discovery Capital Management to benefit from the overall Bull Run in the market.
Citrone has become one of Wall Street’s most successful hedge fund managers. He is best known for his experience in emerging markets through work in the Latin American debt crisis. He has also worked at Fidelity Investments in Boston, where he headed the company’s emerging markets fixed income and currency group.
The billionaire hedge fund manager is often dubbed a Tiger cub, having previously worked at Julian Robertson Tiger Management as a portfolio manager before founding Discovery Capital Management. Last year, he reiterated his firm conviction about technology stocks as they offer a great way of investing in the future.
Nevertheless, the hedge fund manager raised concerns about valuations in the technology sector.
“Technology is still a fantastic area to invest in going forward, but I still think that the multiples are too high for most companies. Anytime a company’s still being priced to sales, or they’re talking about the TAM, I want nothing to do with that company,” Citrone said
Our Methodology
Citrone is one of the most followed fund managers, given his impressive track record in picking winners in the market. Consequently, we have analyzed Discovery Capital Management’s 13F filings for the fourth quarter of 2023 and settled on Citrone’s top stock holdings. The stocks are arranged in ascending order based on the value of hedge fund’s stakes in them. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Citrone’s Top Stock Picks According to His Latest Portfolio
15.Abercrombie & Fitch Co (NYSE:ANF)
Discovery Capital Management’s Equity Stake: $13.78M
Lifestyle retailer Abercrombie & Fitch Co (NYSE:ANF) ranks 15th in our list of the top stock picks of Rob Citrone. Discovery Capital bought a new stake worth about $14 million in the company during the fourth quarter of 2023.
14. Compass, Inc. (NYSE:COMP)
Discovery Capital Management’s Equity Stake: $13.99M
Compass, Inc. (NYSE:COMP) is Citrone’s top holding in the real estate sector. The company operates as a cloud-based platform providing an integrated software suite for customer relationship management and marketing client services in the real estate sector. Compass, Inc. (NYSE:COMP) also offers mobile apps that allow agents to manage their business from anywhere.
13. Genius Sports Ltd (NYSE:GENI)
Discovery Capital Management’s Equity Stake: $14.22M
Rob Citrone’s hedge fund owns a $14 million stake in Genius Sports as of the end of the fourth quarter of 2023. The stock has gained about 14% over the past one year.
12. Cemex S A B De C V (NYSE:CX)
Discovery Capital Management’s Equity Stake: $15.13M
Building materials company Cemex S A B De C V (NYSE:CX) was a new arrival on Citrone’s portfolio in the fourth quarter of 2023, as his hedge fund bought a stake worth over $15 million in the company during the period.
11. Invesco Exchange Traded Fd T
Discovery Capital Management’s Equity Stake: $17.08M
Citrone’s hedge fund increased its hold in Invesco Exchange-Traded Fund Trust by 526% in the fourth quarter, ending the period with a $17 million stake.
10. Adecoagro SA (NYSE:AGRO)
Citrone’s hedge fund increased its stake in agro-industrial company Adecoagro SA (NYSE:AGRO) by 412% in the fourth quarter of 2023, ending the year with an $18.17 million stake in the company.
9. Grupo Financiero Galicia S.A. (NASDAQ:GGAL)
Discovery Capital Management’s Equity Stake: $20.02M
Argentina-based financial services company Grupo Financiero ranks ninth in our list of the top stock picks of Rob Citrone. As of the end of the fourth quarter Discovery Capital reported having a $20 million stake in the company.
8.Rtx Corp (NYSE:RTX)
Discovery Capital Management’s Equity Stake: $21M
Rtx Corp (NYSE:RTX), most commonly known as Raytheon, is one of the top stock picks of Rob Citrone. Discovery Capital bought a new stake in the company worth about $21 million during the fourth quarter of 2023. The stock has lost about 5.2% over the past one year.
7. Itau Unibanco Holding SA ADR (NYSE:ITUB)
Discovery Capital Management’s Equity Stake: $24.73M
Brazilian financial services company is yet another new arrival in Discovery Capital’s portfolio as the fund bought a stake worth about $25 million in the company during the fourth quarter of 2023.
6. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Discovery Capital Management’s Equity Stake: $27.18M
San Jose, California-based Credo Technology Group Holding Ltd (NASDAQ:CRDO) is a technology company that provides solutions that enable high-speed connectivity solutions for optical and electrical Ethernet applications. Credo Technology Group Holding Ltd (NASDAQ:CRDO)’s solutions include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chipsets, and SerDes IP.
Credo Technology Group Holding Ltd (NASDAQ:CRDO) was one of the best-performing stocks in the Discovery Capital Management portfolio, going by the 46% gain in 2023.
Click to continue reading and see Citrone’s Top 5 Stock Picks.
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Disclosure: None. Citrone’s Top 15 Stock Picks is originally published on Insider Monkey.