In this article, we discuss John Rogers’ top 5 stock picks. To read about Rogers’ investment philosophy and interesting details about his humble beginnings, go to John Rogers’ Top 10 Stock Picks.
5. Envista Holdings Corporation (NYSE: NVST)
Value: $238,746,000
Change in Position Size: 3%
Percent of John Rogers’ 13F Portfolio: 2.7%
California-based Envista Holdings Corporation provides essential materials for dental services. Envista delivered a $108.4 million net income or $0.64 per diluted share for the fourth quarter of 2020.
As of the end of the fourth quarter, 33 hedge funds in Insider Monkey’s database of 887 funds held stakes in Envista Holdings Corporation, compared to 20 funds in the third quarter. Harris Associates is the biggest stakeholder in the company, with 8.3 million shares, worth $278.5 million.
4. Mattel, Inc. (NASDAQ: MAT)
Value: $277,922,000
Change in Position Size: -7%
Percent of John Rogers’ 13F Portfolio: 3.1%
Mattel Inc. is a California-based toy company which owns major brands like Barbie, Polly Pocket, Hot Wheels, Matchbox, UNO, Star Wars, and Toy Story. For the fourth quarter of 2020, Mattel’s net sales were up 10% to $1.6 billion. MAT‘s reported gross margin of 51.4%, signals a 300 basis points improvement. MAT’s reported net income was $130.5 million while its adjusted EBITDA was up 53% to $283.8 million.
With a $303.9 million stake in Mattel, Mason Hawkin’s Southeastern Asset Management owns 17.4 million shares of the company as of the end of the fourth quarter of 2020. Our database shows that 25 hedge funds held stakes in Mattel as of the end of the fourth quarter, versus 26 funds in the third quarter.
In their Q3 2020 Investor Letter, Longleaf Partners’ highlighted a few stocks and Mattel Inc (NASDAQ:MAT) is one of them. Here is what Longleaf Partners’ stated:
“Mattel (21%, 1.25%), the classic toy company, was another strong contributor in the quarter. Although this year’s revenues will be down due to global lockdowns shutting stores, the company is on track to increase its annual earnings before interest, taxes, depreciation and amortization (EBITDA) with higher gross margins and the successful execution of its outsourced manufacturing strategy. Barbie delivered another excellent performance, gaining seven points of U.S. doll market share in the second quarter, while growing its revenues as competitors shrunk. Mattel also released a new Barbie special on Netflix in September, part of a promising long-term push into intellectual property licensing. American Girl, a brand that has struggled for years, doubled its digital sales during the quarter as well. With higher profitability, shoppers returning to stores and a strong new digital media presence behind its biggest brands, CEO Ynon Kreiz’s strategy is beginning to pay off.”
3. Microsoft Corporation (NASDAQ: MSFT)
Value: $316,548,000
Change in Position Size: -10%
Percent of John Rogers’ 13F Portfolio: 3.6%
Microsoft Corporation returned a whopping $9.5 billion to shareholders in the form of share repurchases and dividends in first quarter of fiscal 2021. The company’s revenue was $37.2 billion in the past quarter, a 25% increase compared to the same quarter last year. MSFT had a 30% increase in its net income which totaled $13.9 billion while delivering a $1.82 diluted earnings per share. With a $1.77 trillion market capitalization, Microsoft achieved a decent 42.9% return in the past 12 months and settled at $236.94 per share at the closing of March 1, 2021.
As of the end of the fourth quarter, there were 258 hedge funds in Insider Monkey’s database that held stakes in Microsoft, compared to 234 funds in the third quarter. Fisher Asset Management, with 23.4 million shares of MSFT, is the biggest stakeholder in the company. Microsoft Corporation ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds: 2020 Q4 Rankings.
2. Philip Morris International Inc. (NYSE: PM)
Value: $365,017,000
Change in Position Size: -3%
Percent of John Rogers’ 13F Portfolio: 4.1%
New York-based Philip Morris International Inc. recently beat Q4 estimates, posting upbeat earnings and revenue. The company’s net revenue of $7.44 billion came in above the estimates of $7.43 billion. With a $133.67 billion market capitalization, Philip Morris delivered an 11.36% return in the past 3 months.
According to our database, the number of PM’s long hedge funds positions increased at the end of the fourth quarter of 2020. There were 52 hedge funds that hold a position in Philip Morris International Inc. compared to the 50 funds in the third quarter. The biggest stakeholder of the company is Terry Smith’s Fundsmith LP, with 19.5 million shares, worth $1.6 billion.
In one of their investor letters, First Eagle Investment Management highlighted Philip Morris International Inc. (NYSE: PM). Here is what First Eagle has to say about the cigarette company:
“Philip Morris was able to recover some of the ground lost during the first quarter selloff but remains well below its early-year highs. Tobacco industry volumes were hurt by Covid-19, as lockdowns and other social-distancing restrictions in certain key markets hurt demand. Duty-free sales also suffered given the lack of global travel during the period. Given its pricing power, cost discipline and robust balance sheet, we believe Philip Morris appears well positioned to navigate the ongoing transition from traditional combustible tobacco products to “heat not burn” alternatives.”
1. Baidu, Inc. (NASDAQ: BIDU)
Value: $633,710,000
Change in Position Size: 3%
Percent of John Rogers’ 13F Portfolio: 7.1%
China-based Baidu Inc. ranks 1st in our list of John Rogers’ top 5 stock picks. Baidu Inc. is China’s leading internet company. The company recently announced its plan to build an intelligent electric vehicle company and signed a strategic partnership with Geely Automobile. Baidu Inc. currently has a $133.67 billion market capitalization. It delivered an impressive 154.45% return in the past 12 months and settled at $295.58 per share at the closing of March 1, 2021.
As of the end of the fourth quarter, 51 hedge funds in Insider Monkey’s database of 887 funds held stakes in Baidu Inc., compared to 43 funds in the third quarter. Jim Simons’ Renaissance Technologies is the biggest stakeholder in the company, with 8.6 million shares, worth $1.86 billion.
Horos Asset Management said in their Q4 2020 investor letter that they reduced their position in Baidu, Inc. (NASDAQ: BIDU) amid rising competition.
Here is what Horos Asset Management stated in their Q4 2020 investor letter:
“We also reduced our exposure to the other Chinese technology giant we hold in our portfolio: Baidu. As we have already highlighted in prior letters, the company has managed—after some very challenging quarters—to refocus its services and develop its own ecosystem around its super app Baidu App, to face the threats posed by WeChat (Tencent), Alipay (Alibaba) and other recently created apps, which have huge acceptance and growth in the country. Finally, Baidu’s share price has rewarded these efforts, with a share price rise of over 100% since the March lows.”
You can also take a peek at Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021 and Billionaire Julian Robertson’s Top 10 Stocks.
