We recently published a list of Billionaire Chris Hohn’s Top 9 Stock Picks. In this article, we are going to take a look at where Moody’s Corporation (NYSE:MCO) stands against other Billionaire Chris Hohn’s top stock picks.
Chris Hohn is a British hedge fund manager, philanthropist, and activist investor, best known for founding TCI Fund Management. Renowned for his aggressive yet principled investment strategies, Hohn has not only achieved exceptional financial success but has also used his influence to advocate for corporate accountability and social causes, particularly in climate change and child welfare. He was born in 1966 in England to an immigrant family. His father, a Jamaican-born car mechanic, and his mother, a legal secretary, emphasized the importance of hard work and education. Hohn excelled academically, earning a first-class degree in economics and accounting from the University of Southampton. He later attended Harvard Business School, where he graduated with an MBA and earned distinction as a Baker Scholar, placing in the top 5% of his class.
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Hohn began his career in finance with a position at Perry Capital, a New York-based hedge fund, where he honed his skills in investment management. By 2003, after gaining substantial experience and building a network of investors, Hohn decided to establish his own hedge fund with a unique vision: blending high returns with philanthropy. In 2003, Hohn founded The Children’s Investment Fund Management (TCI) in London. The hedge fund’s name reflected its dual mission: to generate exceptional investment returns and to support philanthropic efforts through a linked charity, The Children’s Investment Fund Foundation (CIFF). TCI follows a concentrated activist investment strategy, often holding large stakes in a small number of companies. Hohn uses these positions to push for changes in corporate governance, operational efficiency, and environmental practices.
TCI has delivered an average annualized return of over 15% since its inception, outperforming many peers in the hedge fund industry. As of the end of the third quarter of 2024, TCI manages over $40 billion in 13F securities, making it one of the largest hedge funds in Europe. Hohn has pushed major corporations to adopt stricter environmental policies and disclose their carbon emissions. He also advocates for linking executive compensation to environmental performance. In 2019, he publicly criticized governments and companies for not addressing aviation’s role in climate change, calling for greater transparency and accountability. Hohn’s strategy emphasizes long-term value creation, focusing on businesses with strong fundamentals but inefficiencies in management or operations.
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For this article, we selected stocks by combing through the 13F portfolio of TCI Fund Management at the end of the third quarter of 2024. These stocks are also popular among other hedge funds. 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).
A hand holding a rating chart, emphasizing the importance of credit ratings in the financial services sector.
Moody’s Corporation (NYSE:MCO)
Number of Hedge Fund Holders: 67
TCI Fund Management’s Stake: $6.2 billion
Moody’s Corporation (NYSE:MCO) operates as an integrated risk assessment firm worldwide. There are multiple compelling aspects that make Moody’s Corp. (NYSE:MCO) a rewarding investment potential. First of all, the company showed incredible financial performance, as depicted in the third report of 2024. For instance, reported revenue was $1.81 billion, showing a 23% increase from the same period in 2023, driven by strong performances across both divisions. Additionally, the adjusted net income was $585 million, indicating efficient operations and business growth. Secondly, Moody’s (NYSE:MCO) has announced a new strategic partnership agreement with MSCI to leverage each other’s strengths to bring greater transparency on ESG and sustainability to markets and power better decisions. Moody’s (NYSE:MCO) will leverage MSCI’s sustainability data and models, which are used by the world’s largest asset managers and asset owners. With access to MSCI data, Moody’s intends over time to migrate its existing ESG data and scores to offering MSCI’s sustainability content through a range of solutions serving Moody’s customers in the banking, insurance and corporate sectors.
Overall, MCO ranks 2nd on our list of Billionaire Chris Hohn’s top stock picks. While we acknowledge the potential of MCO as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a stock that is more promising than MCO 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.
