We recently published a list of Billionaire Howard Marks’ Top 10 Stock Picks. In this article, we are going to take a look at where AngloGold Ashanti plc (NYSE:AU) stands against other Billionaire Howard Marks’ top stock picks.
A decade of peerless returns. That’s what billionaire investor Howard Marks expects in the aftermath of Donald Trump’s assuming the position of the leader of the biggest economy in the world. He expects the US economy to remain the envy of the world and grow in strength with the slashing of red tape and easing taxes.
“Warren Buffett said it: don’t bet against the United States. He’s probably right about that,” the Wall Street veteran told the Sohn Hearts & Minds investment conference in Adelaide.
The remarks followed Trump’s big win against Democrat rival Kamala Harris, which ended up sparking a surge in stocks. Initially, US equities rallied to record highs as investors reacted to a potential slash in interest rates and taxes and an easing of regulatory pressure.
READ ALSO: 10 Cheap Value Stocks to Invest In, According To Seth Klarman and 10 Cheap Value Stocks to Invest in According to Warren Buffett.
Fast forward, equities have pulled back significantly amid growing concerns about valuations. Worries that the Federal Reserve might not cut interest rates aggressively due to a potential spike in inflation on Trump tariffs have also left the markets on edge.
In mid-last year, the founder of Oaktree Capital Management raised concerns over high debt loads in private equity and real estate. Marks reiterated that the sectors would remain under pressure should interest rates stay higher for longer.
“The leverage, the use of debt to amplify your returns, has been the lifeblood of these two asset classes,” Marks said in an interview with Bloomberg. Amid growing concerns about the long-term impact of the high interest rate environment, Marks has moved to strengthen Oaktree Capital Management’s exposure in the energy sector. Energy holdings account for the most significant share of the hedge fund portfolio, having carried out significant changes in the third quarter of last year.
Increased focus on energy holdings does not come as a surprise. Marks is looking to take advantage of the growing demand for energy amid the artificial intelligence revolution. One of his energy holdings is already pushing for a deal with a tech giant that needs clean nuclear energy to power its data centres.
In addition to focusing on energy holdings, the founder of Oaktree Capital Management remains bullish about investment opportunities in China. Despite China’s slow recovery from the COVID-19 pandemic causing it to lose favor among investors, Marks sees numerous attractive investment opportunities still available.
“Clearly, China is on the pile of things that people feel ill about, and it’s on that pile that you find the bargains,” he said. “That doesn’t mean that you should buy everything on the pile, but that’s where you look for the castoffs and the bargains.”
The focus on Chinese equities does not come as a surprise, as Marks believes US equities are “high priced.” Therefore, bargains in China are more appealing. Consequently, the billionaire investor expects Chinese growth to exceed other countries in the near future, including the US.
Our Methodology
We scanned Oaktree Capital Management’s portfolio to make the list of billionaire Howard Marks’ top 10 stock picks. We then settled on the hedge fund’s biggest holdings and examined why they stand out as the top stock picks. Finally, we ranked the stocks in ascending order based on the hedge fund’s stake value.
At Insider Monkey, we are obsessed with 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).
A group of miners in hard hats and safety gear descending into a deep coal mine.
AngloGold Ashanti plc (NYSE:AU)
Oaktree Capital Management’s Stake Value: $150.66 million
Number of Hedge Fund Holders: 21
AngloGold Ashanti plc (NYSE:AU) is a gold mining company that explores gold and produces silver and sulphuric acid as by-products. It was one of the best-performing stocks in the Oaktree Capital Management portfolio, rallying 30% in 2024. The rally came as the company benefited from a spike in gold prices that found support above the $2600 an ounce level.
AngloGold Ashanti plc (NYSE:AU) had an impressive third quarter as its managed operations produced the most gold in 2024 and a notable 339% increase in adjusted EBITDA over the previous year. The increase was due to improved production from managed operations, effective cost control, and higher gold prices, which rose 28% year over year to $2,449/oz. Managed operations produced about 1.56% more gold year over year.
The company has sought to strengthen its position in the gold mining business with the acquisition of Egypt-focused smaller rival Centamin in a $2.5 billion stock and cash deal. Centamin’s main asset is the Sukari gold mine, Egypt’s largest and one of the largest producing mines in the world. Following the acquisition, AngloGold Ashanti plc (NYSE:AU) is on course to become the fourth largest gold producer in the world by volume, as Sukari has the potential to produce up to 450,000 gold ounces per year.
Overall, AU ranks 5th on our list of Billionaire Howard Marks’ top stock picks. While we acknowledge the potential of AU to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
