We recently analyzed billionaire Dan Loeb’s portfolio to see which large-cap stocks he’s picking up for 2024. S&P Global Inc. (NYSE:SPGI) is part of the best large-cap stock picks of billionaire Loeb.
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’s Q1’2024 Returns and Performance
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.
Billionaire Loeb Joins the “Soft Landing Camp”
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.
“We shared our views on AI’s transformational potential in recent letters and it is a key element of the thesis for nearly half of our equity positions today. Unlike in past periods of technological paradigm shifts, this new technology favors incumbents who are deploying their financial and intellectual war chests to win the AI arms race. Right now, what we see as the best-run “legacy” companies like Microsoft and Amazon (both of which we own) have built enormous competitive advantages and seen their growth vectors accelerate. Below, we discuss London Stock Exchange Group, Alphabet and TSMC, positions whose catalysts for further value creation are primarily “AI-driven”. We also see the energy transition and growth in data centers affecting scores of industrial, materials and energy companies as demand for infrastructure and certain commodities surges.”
In this article we scanned billionaire Loeb’s Q1 2024 portfolio and picked his 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).
S&P Global Inc. (NYSE:SPGI)
Billionaire Dan Loeb Q1’2024 Stake Value: $142,525,750
Billionaire Dan Loeb opened a new position in financial data and ratings company S&P Global Inc. (NYSE:SPGI) in the first quarter of 2024, buying 335,000 shares of S&P Global Inc. (NYSE:SPGI), worth about $142 million. S&P Global has 52 years of consistent dividend increases under its belt. S&P Global Inc. (NYSE:SPGI) recently posted Q1 results, beating estimates on both EPS and revenue. Adjusted earnings came in at $4.01 per share in the March quarter, surpassing estimates by $0.35. Revenue jumped 10.4% year over year to $3.49 billion, beating estimates by $80 million. S&P Global Inc. (NYSE:SPGI) also increased its full-year guidance for 2024. S&P Global Inc. (NYSE:SPGI) expects revenue growth of 6% to 8% in the year, while analysts were expecting growth of 7.42%.
Hedge fund sentiment for S&P Global Inc. (NYSE:SPGI) jumped in the first quarter, as 97 funds tracked by Insider Monkey reported owning stakes in S&P Global Inc. (NYSE:SPGI), up from 82 hedge funds in the previous quarter.
Aristotle Atlantic Focus Growth Strategy stated the following regarding S&P Global Inc. (NYSE:SPGI) in its first quarter 2024 investor letter:
“S&P Global Inc. (NYSE:SPGI detracted from portfolio performance in the quarter, as shares were weak following a lower-than-expected earnings report and newly issued fiscal year 2024 financial guidance that was slightly below expectations. The company’s lower-than-expected forecast of bond issuance activity for the year was the primary focus of the guidance, although management acknowledged that the guidance is likely conservative, which could result in actual activity exceeding expectations later in the year.”
S&P Global Inc. (NYSE:SPGI) ranks 4th 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.
