We recently published a list of 7 Best Large-Cap Stocks to Buy in 2024 According to Billionaire Dan Loeb. Since GS is part of Loeb’s top large-cap stock picks, the stock deserves a detailed look. But first let’s see the latest performance of the billionaire.
Activist investor and billionaire Dan Loeb made a comeback in the final quarter of 2023 after losing money during most of the year in addition to suffering losses in 2022. Wall Street Journal earlier this year reported that Loeb’s Third Point, which he founded in 1995, gained between 7.8% to 8.6% in the December quarter. Third Point was also down 21% in 2022. Third Point was a star performer in the pandemic year as the fund closed 2020 up 19%, as Loeb foresaw the economy doing much better than many had expected.
Loeb is known for his activist bets in high-profile companies Intel, Disney and Shell. Some of his bets were highly unsuccessful, while others paid off. Latest data shows Loeb is continuing to retain the Q4’2023 momentum into 2024. In his Q1 letter to investors, Loeb revealed that Third Point returned 7.8% in the flagship Offshore Fund.
Loeb said in his Q1 letter that he’s in the “soft landing camp” as he believes we are no longer in an inflationary environment. He’s also highly bullish on AI, saying the technology favors the “incumbents” who are deploying massive cash “war chests” to win the “AI arms race,” a term the billionaire used twice in his letter. Loeb is betting on the whole AI spectrum — semiconductors, data centers, AI software and power.
Photo by Akshay Sadarangani on Unsplash
For this article we scanned Third Point’s Q1 portfolio and picked the fund’s top large-cap stock holdings. 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).
Goldman Sachs Group Inc (NYSE:GS)
Billionaire Dan Loeb Q1’2024 Stake Value: $104,422,500
Billionaire Dan Loeb had exited his position in Goldman Sachs Group Inc (NYSE:GS) in early 2017. However, he came back to the stock in the first quarter of this year, buying 250,000 shares of the financial services giant, worth over $104.4 million. Over the past one year Goldman Sachs Group Inc (NYSE:GS) shares have jumped about 39%.
Last month, BofA published its updated list of US-1 stocks. These are the Buy-rate stocks which are the top picks of BofA. The firm recommends these stocks for “superior investment performance” over the long term. Goldman Sachs Group Inc (NYSE:GS) was part of the list.
Goldman Sachs Group Inc (NYSE:GS) is a strong dividend-paying stock, as the bank has increased its dividend every year since 2010.
Of the 919 hedge funds tracked by Insider Monkey, 72 hedge funds reported owning stakes in Goldman Sachs Group Inc (NYSE:GS). The biggest stake in Goldman Sachs Group Inc (NYSE:GS) is owned by Ken Fisher’s Fisher Asset Management which owns a $2.4 billion stake in Goldman Sachs Group Inc (NYSE:GS).
Ariel Focus Fund stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its fourth quarter 2023 investor letter:
“Global investment bank, The Goldman Sachs Group, Inc. (NYSE:GS), also increased in the period on solid earnings results. The top-line came in strong led by elevated financing activity and an improvement in advisory revenues, despite weak transaction volumes within the investment banking segment. Should conditions remain conducive, management remains cautiously optimistic the business will experience continued recovery in both capital markets and strategy activity. Meanwhile, GS continues to successfully execute on its strategic initiatives to improve the overall return of the company. It is right sizing headcount and narrowing its ambitions in consumer strategy through divestitures and an enhanced focus on driving profitability in Platform Solutions by 2025. With potential regulatory capital constraints from B3E, GS noted it will reign in buybacks over the short-term but maintain its dividend. Looking ahead, we continue to view the near and long-term outlook for Goldman as attractive at current levels, given favorable business trends, continued positive momentum on strategic initiatives and active expense/capital management programs.”
Goldman Sachs Group Inc (NYSE:GS) ranks 6th in Insider Monkey’s list of the 7 Best Large-Cap Stocks to Buy in 2024 According to Billionaire Dan Loeb.
If you are looking for an AI stock that is as promising as Microsoft 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.