We recently published a list of 9 Best Stocks to Buy in 2024 According to Billionaire George Soros. Since CRH Plc (NYSE:CRH) ranks 5th in the list, it deserves a deeper look.
Billionaire George Soros has been one of the most active and divisive figures in the Wall Street. Often a right-wing target, the billionaire handed over the control of his $25 billion empire to his son Alexander Soros last year. The 93 year-old Hungarian American is known as the philosopher investor in the Wall Street, mainly due to his contributions to philosophy and his deep desire to leave his mark in the world of philosophy, which many believe he fulfilled thanks to his General Theory of Reflexivity for capital markets.
George Soros founded Soros Fund Management in 1970. Since its inception through 2010, the fund posted on average a 20% annual rate of return. A Wall Street Journal report earlier this year said that Soros Fund Management has posted a compound annual return of 13.5% over the past three years through June 30, 2023.
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George Soros in his book The New Paradigm of Financial Markets wrote a chapter titled “Autobiography of a Failed Philosopher” in which he talked in detail about how many, including his son and his biographer, started accepting the idea that Soros was a failed philosopher. Soros talks in detail about his childhood, his relationship with his father who at one point, according to Soros, lost all ambition in life and did not amass any wealth. A Jew by birth, Soros decided to come to the UK after the Nazi occupation of Hungary. Soros’ first interactions with philosophy started when he was impressed by the works of Karl Popper. But Soros’ dreams of creating a career in philosophy could not realize for several reasons, some of which he talks about in his book:
“I would have preferred to stay within the safe walls of academe—I even had a teaching assistant job prospect at the University of Michigan in Kalamazoo, but my grades were not good enough, and I was forced to go out into the real world. After several false starts, I ended up working as an arbitrage trader, first in London and then in New York.* At first I had to forget everything I had learned as a student in order to hold down my job, but eventually my college education came in very useful. In particular, I could apply my theory of reflexivity to establish a disequilibrium scenario or boom-bust pattern for financial markets. The rewarding part came when markets entered what I called far-from-equilibrium territory because that is when the generally accepted equilibrium models broke down.”
For this article we scanned Billionaire Soros’s Soros Fund Management’s Q1 portfolio and chose its top 9 stock picks. 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).
CRH Plc (NYSE:CRH)
Billionaire George Soros’s Q1’2024 Stake Value: $68,278,672
Building materials company CRH Plc (NYSE:CRH) ranks fifth on our list of the best stocks to buy in 2024 according to billionaire George Soros. While the billionaire’s fund cut its stake in CRH Plc (NYSE:CRH) by 46% in the first quarter, it still owns a $68 million stake in CRH Plc (NYSE:CRH). CRH Plc (NYSE:CRH) accounts for about 1.13% of the total portfolio of Soros Fund Management. Operating in 29 countries, CRH Plc (NYSE:CRH) is on an acquisition spree to expand more. CRH Plc (NYSE:CRH) is expected to spend $4 billion on acquisitions in 2024 and invest $1 billion in growth capital expenditure. CRH Plc (NYSE:CRH) is also a great stock in terms of shareholder value. CRH Plc’s (NYSE:CRH) share buybacks are expected to be around $1.2 billion in 2024, including the recently announced $300 million for Q2. CRH Plc (NYSE:CRH) has been paying dividends consistently since 2018. Analysts believe CRH Plc (NYSE:CRH) is poised to benefit from the huge infrastructure spending and housing projects in the US in the coming years, irrespective of the outcome of the election. CRH Plc’s (NYSE:CRH) EBITDA margin over the past ten years doubled from 9% to 18%, while FCF has grown at a CAGR of 13%. CRH Plc’s (NYSE:CRH) forward P/E is around 14, lower than the industry median of 15.6. CRH Plc’s (NYSE:CRH) earnings are expected to grow about 10% YoY next year and at 10.27% over the next five years on a per-annum basis. CRH Plc’s (NYSE:CRH) sales are expected to rise by 5.5% in 2025. Based on this growth and low P/E ratio, CRH is an undervalued dividend-paying stock.
L1 Long Short Fund stated the following regarding CRH plc (NYSE:CRH) in its first quarter 2024 investor letter:
“CRH plc (NYSE:CRH) (Long +25%) shares continued to rally strongly after the company delivered strong Q4 FY23 numbers and provided FY24 guidance ~5% ahead of consensus expectations. The company is a significant beneficiary of the exceptional growth in U.S. infrastructure spending which will underpin many years of robust demand. The Infrastructure Investment and Jobs Act (‘IIJA’), Inflation Reduction Act (‘IRA’) and the Chips and Science Act will together add roughly US$2 trillion in investment to ageing U.S. infrastructure. These market tailwinds, together with CRH’s ability to drive value-accretive M&A, position the company to deliver consistent double-digit earnings growth over the medium term.”
Overall, CRH Plc (NYSE:CRH) ranks 5th in Insider Monkey’s list of Billionaire George Soros’s 10 Best Stock Picks in 2024. You can visit 9 Best Stocks to Buy in 2024 According to Billionaire George Soros to see other stock picks of Billionaire George Soros. While we acknowledge the potential of CRH Plc (NYSE:CRH), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CRH Plc (NYSE:CRH) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.