In this piece we will take a look at some of the stocks Chris Hohn is buying.
Sir Chris Hohn, a British billionaire, is responsible for managing the portfolio of the London-based investment management fund, TCI Management Limited. Through this fund, he is known for taking a longer-term, relationship-based approach towards investment, through TCI Fund Management’s multi-billion dollar portfolio.
Sir Hohn’s investment fund has holdings in companies belonging to several sectors, ranging from technology to real estate. This portfolio also features new additions, and we will be talking about these companies in the list that follows.
However, even as Sir Hohn grows his portfolio, his biggest investments focus exclusively on established American technology firms, through multi billion dollar investments in Alphabet Inc. (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT), which are now joined by Charter Communications, Inc. (NASDAQ:CHTR).
TCI Management Limited is also known for its contractual commitment to sharing profits with The Children’s Investment Fund Foundation, a charitable organization.
Additionally, Sir Hohn’s activist approach has often brought in wins and losses, with TCI Fund Management having sued governments and made successful and unsuccessful attempts at introducing major change inside large firms. For instance, while the firm was able to stop a German market services provider from a takeover attempt, it lost a lawsuit from an American railroad company.
The New York Times called Hohn one of the “most feared” investors in Europe. In his book titled “Invasion of the Locusts,” Werner G. Seifert, former CEO of trading company Deutsche Börse, described Hohn as someone driven by a “desire to win.”
Therefore, Sir Hohn’s new stock picks are often a must watch. The billionaire was worth $5 billion in 2020, and TCI Management’s portfolio is worth several times its founder’s net worth.
Chris Hohn
Our Methodology
Our methodology for this piece is simple. We picked the stocks in which TCI initiated new stakes in the second quarter and those in which the fund increased its hold in the same period.
Why pay attention to hedge fund holdings? 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 more than 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.
Europe’s Most Feared Investor Chris Hohn is Buying These 6 Stocks
6. Kilroy Realty Corporation (NYSE:KRC)
Sir Hohn’s Stake Value: $8.3 million
Percentage of Sir Hohn’s 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 26
Kilroy Realty Corporation (NYSE:KRC) is an American real estate firm that has focused its attention on the West Coast of the Continental United States. The company has properties in localities such as San Diego, San Francisco, Los Angeles and Seattle. Kilroy Realty Corporation’s properties focus mostly on non residential use and the company also has millions of acres of projects under development.
Sir Hohn’s investment firm TCI Fund Management added 120,083 shares of Kilroy Realty Corporation to its portfolio in the second quarter of this year. This stake is worth $8.3 million and it represents 0.02% of Sir Hohn’s sum portfolio holdings.
Kilroy Realty Corporation’s largest shareholder is Howard Marks’s Oaktree Capital Management, which owns $6.3 million through 910,011 shares.
Insider Monkey’s survey of the holdings of 873 hedge funds reveals that 26 held a stake in the real estate company, and Deutsche Bank analyst Derek Johnston upgraded the stock’s rating to Buy and increased its price target to $73 in an investor note released in early October. The analyst believes that the office real estate sector holds strong potential despite recent headwinds.
Alongside Microsoft Corporation and Alphabet Inc., Kilroy Realty Corporation is now part of Sir Hohn’s portfolio which includes other holdings such as Charter Communications, Inc..
5. Alexandria Real Estate Equities, Inc. (NYSE:ARE)
Sir Hohn’s Stake Value: $29.7 million
Percentage of Sir Hohn’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 28
Alexandria Real Estate Equities, Inc. (NYSE:ARE), as its name suggests, is a real estate investment trust that was founded in 1994.
By posting revenue of $509.6 million and funds from operations (FFO) of $1.93, Alexandria Real Estate Equities, Inc. beat analyst estimates for both metrics in the second quarter. In an analyst note issued late October, BTIG raised the company’s price target to $233 from $187, sharing that it believes that the company’s out of the box thinking differentiates it from its competitors.
Alexandria Real Estate Equities, Inc. is now part of Sir Hohn’s best picks, in a portfolio which includes other holdings such as Charter Communications, Inc., Canadian Pacific Railway Limited (NYSE:CP) and big tech firms such as Microsoft Corporation and Alphabet Inc..
Alexandria Real Estate Equities, Inc.’s largest shareholder is Stuart J. Zimmer’s Zimmer Partners, which owns 1.3 million shares of the company. These shares are worth $241 million. Insider Monkey’s survey of the holdings of 873 hedge funds reveals that 28 had invested in the real estate company by the end of the second quarter.
4. Boston Properties, Inc. (NYSE:BXP)
Sir Hohn’s Stake Value: $1.3 billion
Percentage of Sir Hohn’s 13F Portfolio: 3.26%
Number of Hedge Fund Holders: 19
Boston Properties, Inc. (NYSE:BXP) is the largest American real estate owner and developer whose shares trade on a public index. The company owns properties in its hometown Boston and other cities that include San Francisco, California and New York, New York.
Sir Hohn’s investment firm increased its holdings of Boston Properties, Inc. by 31% in the second quarter of this year, bringing up total share ownership to 11.44 million shares worth a cool $1.3 billion and representing 3.26% of TCI Fund Management’s investment portfolio. The firm is also Boston Properties, Inc.’s largest shareholder.
Boston Properties, Inc.’s second largest shareholder is Jean-Marie Eveillard’s First Eagle Investment Management, who owns 2.5 million shares worth $287 million.
Investment bank Barclays initiated coverage of Boston Properties, Inc. in September, as it set the company’s target share price to $134 and set an Overweight rating for the stock.
Boston Properties, Inc. joins Microsoft Corporation and Alphabet Inc., alongside Charter Communications, Inc. as a top pick in Hohn’s portfolio.
3. Canadian National Railway Company (NYSE:CNI)
Sir Hohn’s Stake Value: $3.2 billion
Percentage of Sir Hohn’s 13F Portfolio: 7.92%
Number of Hedge Fund Holders: 40
Canadian National Railway Company (NYSE:CNI) is a more than a hundred year old company that is based inside Canada and provides railroad services to customers on both sides of the border. The company is responsible for the goods transport, and it transports materials such as metals, minerals and chemicals alongside products such as fertilizer and petroleum.
Out of the 873 hedge funds polled by Insider Monkey in the second quarter, 40 had held a stake in the Canadian National Railway Company. Its largest shareholder after Sir Hohn is Stephen J. Errico’s Locust Wood Capital Advisers who owns 171,168 shares worth $19.7 million.
In a late October note, Deutsche Bank’s analyst Amit Mehrotra raised Canadian National Railway Company’s price target to $130 per share from an earlier $110.
2. Canadian Pacific Railway Limited (NYSE:CP)
Sir Hohn’s Stake Value: $4.3 billion
Percentage of Sir Hohn’s 13F Portfolio: 10.71%
Number of Hedge Fund Holders: 25
Canadian Pacific Railway Limited is one of the oldest companies in Canada, as it was founded in 1881 and it is headquartered in Calgary. The company primarily targets the commodity and minerals transportation markets, by shipping a diverse range of products covering grains, fertilizers, plastics, minerals and metals.
During the second quarter, Sir Hohn’s TCI Fund Management held 55.8 million shares of the company, a stake that represented 10.7% of his portfolio and was worth $4.2 billion.
A second quarter poll of 873 hedge funds by Insider Monkey revealed that 25 held a stake in Canadian Pacific Railway Limited, and the company’s largest investor after Sir Hohn is Stephen J. Erricos’s Locust Wood Capital Advisors.
ClearBridge Investments in a first quarter investor letter published earlier this year had the following to say about Canadian Pacific Railway Limited:
“We reoriented the portfolio for a more cyclical market in the fourth quarter and saw good performance in these areas from structural growth companies like Canadian Pacific Railway, which we repurchased during the quarter. Canadian Pacific pared gains after announcing the acquisition of Kansas City Southern that will create the first rail operator connecting the U.S., Mexico and Canada.”
Canadian Pacific Railway Limited joins Microsoft Corporation and Alphabet Inc., alongside Charter Communications, Inc. as a top Sir Hohn pick.
In an October analyst note, RBC Capital analyst Walter Spracklin kept an outperform rating on Canadian Pacific Railway Limited and reduced its price target by CAD$1 to CAD$115.
1. Charter Communications, Inc. (NASDAQ:CHTR)
Sir Hohn’s Stake Value: $7.5 billion
Percentage of Sir Hohn’s 13F Portfolio: 18.68%
Number of Hedge Fund Holders: 75
Charter Communications, Inc. is headquartered in Stamford, Connecticut after being founded in 1993. It is a broadband connectivity and cable services provider that offers several kinds of internet connections alongside equipment that enable its customers to set up their connections inside their homes.
Sir Hohn increased his holdings in Charter Communications, Inc. by 2% to 10.3 million shares in Q2. These shares were worth $7.4 billion and they represented nearly one fifth or 18.68% of his portfolio. Additionally, 75 of the 873 hedge funds polled by Insider Monkey during the same time period held a stake in Charter Communications, Inc..
Following Sir Hohn, Charter Communications, Inc.’s largest stakeholder is the legendary Warren Buffett’s Berkshire Hathaway, who owns 5.2 million shares for a stake that is worth $3.7 billion.
In its first quarter investor letter, ClearBridge Investments had the following to say about Charter Communications, Inc.:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter trailed after generating robust returns earlier in the recovery.”
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This article is originally published at Insider Monkey.
