This article discusses the top 10 stock picks of Levin Easterly Partners at the end of the second quarter of 2022. If you want to jump ahead and learn about the firm’s top five favourite stocks, please go to Levin Easterly Partners’ Latest Portfolio: Top 5 Stock Picks.
Levin Easterly Partners traces its origin back to Levin Capital Strategies LP, an investment management firm founded by John A. Levin in 2006. Before starting Levin Capital Strategies, Mr. Levin had founded John A. Levin & Co. in 1982, which Baker, Fentress & Company acquired in 1997. Mr. Levin also served as a partner at legendary hedge fund manager Michael Steinhardt’s hedge fund Steinhardt Partners between 1976 and 1982. In 2019, asset management holding company, Easterly, bought the institutional investment business of Levin Capital Strategies, thus creating Levin Easterly Partners.
Last year in April, Levin Easterly Partners announced through a press release that it would be changing its name to Easterly Investment Partners. At the time of the firm’s name change, Jack Murphy, Chief Investment Officer (CIO) and lead portfolio manager at Easterly Investment Partners, said:
“Our name has changed, but our people, our strategies and our investment philosophy remain the same. This renaming enables us to strengthen our story, and to more clearly communicate how we deliver solutions to investors.”
Mr. Murphy holds a bachelor of science degree from Bryant College and an MBA from Northeastern University. He has also served as the CIO at Levin Capital Strategies. Easterly Investment Partners’ primary objective is to invest in companies that satisfy the three primary criteria of its investment philosophy: contrarian, value and catalyst.
Levin Easterly Partners’ Portfolio
As of March 28, 2022, Easterly Investment Partners managed assets worth over $1.5 billion for 390 clients. According to the fund’s last filed 13F filing for the quarter ending June 30, its portfolio had a high concentration of stocks from the financial sector, which accounted for around 29% of the aggregate value of its $1.12 billion portfolio. During the second quarter, Easterly Investment Partners sold its entire stake in 23 companies and initiated a new stake in the same number of companies. The top 10 holdings of the fund, which include Unilever PLC (NYSE:UL), Pfizer Inc. (NYSE:PFE), and Dominion Energy Inc. (NYSE:D), accounted for 22.39% of the aggregate value of the fund’s 13F portfolio at the end of Q2.
Image by Sergei Tokmakov, Esq. from Pixabay
Our Methodology
For the stocks discussed in this article, we have relied on the 13F filing submitted by Easterly Investment Partners with the SEC for the quarter ending June 30. At Insider Monkey, we track the portfolios of over 900 hedge funds as our research shows that the consensus stock picks of the top hedge funds beat the broader market by a wide margin in the long run.
Levin Easterly Partners’ Latest Portfolio: Top 10 Stock Picks
10. Centene Corporation (NYSE:CNC)
Levin Easterly Partners’ Stake Value: $19,985,000
Percentage of Levin Easterly Partners’ 13F Portfolio: 1.78%
Number of Hedge Fund Holders(Q1): 60
At the end of March, 60 funds tracked by us held a stake in Centene Corporation (NYSE:CNC), up from 53 at the end of 2021. Many of those funds would likely have benefitted from investing in stock this year as shares of Centene Corporation (NYSE:CNC) are up close to 14% year-to-date, beating the broader market by more than 26%.
The company reported its second-quarter numbers last month. Though Centene Corporation (NYSE:CNC) reported a loss of $172 million on revenue of $35.9 billion for the period, it was an improvement from the $535 million loss on $31 billion of revenue it had reported for the same quarter in the previous year. Along with its earning release, Centene Corporation’s (NYSE:CNC) management also increased its full-year EPS guidance by $0.20 and now expects FY 2022 EPS to be between $5.60 and $5.75.
9. Pioneer Natural Resources Company (NYSE:PXD)
Levin Easterly Partners’ Stake Value: $22,848,000
Percentage of Levin Easterly Partners’ 13F Portfolio: 2.03%
Number of Hedge Fund Holders(Q1): 54
Levin Easterly Partners reported a stake in Pioneer Natural Resources Company (NYSE:PXD) in its 13F filing for the second quarter of 2021. Since then, Pioneer Natural Resources Company’s (NYSE:PXD) stock has appreciated more than 40%. At the end of March, Gavin M. Abrams’ Abrams Bison Investments was the largest shareholder of Pioneer Natural Resources Company (NYSE:PXD) among the funds tracked by us, holding 598,000 shares valued at close to $150 million.
During the company’s latest earnings call, Natural Resources Company’s (NYSE:PXD) CEO, Scott Sheffield, opined that due to extremely tight supply and rising demand, he expects crude oil prices to average around $100 per barrel for the next five years, saying:
“I’m still very optimistic that the oil price is going to continue to march forward, with probably more upside than downside.”
8. Johnson & Johnson (NYSE:JNJ)
Levin Easterly Partners’ Stake Value: $23,882,000
Percentage of Levin Easterly Partners’ 13F Portfolio: 2.12%
Number of Hedge Fund Holders(Q1): 83
Levin Easterly Partners more than doubled its stake in the healthcare and pharma major Johnson & Johnson (NYSE:JNJ) by 121% to 134,536 shares during the second quarter. Other hedge funds that increased their stake in Johnson & Johnson (NYSE:JNJ) during that period included Jeffrey Talpins’ Element Capital Management, which raised it by 50% to 21,744 shares, and Ken Fisher’s Fisher Asset Management, which increased it by a whopping 798% to 5.73 million shares.
On August 11, Johnson & Johnson (NYSE:JNJ) announced that it would stop selling its globally recognized and bestselling talc-based baby powder in 2023. The company has faced several lawsuits and complaints in the past few years alleging that the talc-based baby powder it sells has caused cancer due to its contamination with asbestos. Johnson & Johnson (NYSE:JNJ) has not sold this product in the US and Canada since 2020. On July 21, following the company’s second-quarter earnings release, UBS analyst Kevin Caliendo lowered his price target on the stock to $180 from $185 while maintaining his ‘Neutral’ rating.
7. Cisco Systems, Inc. (NASDAQ:CSCO)
Levin Easterly Partners’ Stake Value: $24,095,000
Percentage of Levin Easterly Partners’ 13F Portfolio: 2.14%
Number of Hedge Fund Holders(Q1): 66
From Levin Easterly Partners’ top stock pick at the end of March, Cisco Systems, Inc. (NASDAQ:CSCO) fell six spots during the second quarter and became the fund’s seventh stock pick at the end of June. Cisco Systems, Inc.’s (NASDAQ:CSCO) stock fell by more than 23% during Q2, which could be one of the reasons behind Levin Easterly Partners reducing its stake in the networking equipment giant by 27% to 565,084 shares in that period.
On August 10, Cisco Systems, Inc. (NASDAQ:CSCO) revealed through a blog post that it faced a cyberattack which it recognized on May 24, and the company has been investigating it since then. According to the company:
“Since that point, Cisco Security Incident Response (CSIRT) and Cisco Talos have been working to remediate.
During the investigation, it was determined that a Cisco employee’s credentials were compromised after an attacker gained control of a personal Google account where credentials saved in the victim’s browser were being synchronized.
CSIRT and Talos are responding to the event and we have not identified any evidence suggesting that the attacker gained access to critical internal systems, such as those related to product development, code signing, etc.
We assess with moderate to high confidence that this attack was conducted by an adversary that has been previously identified as an initial access broker (IAB) with ties to the UNC2447 cybercrime gang, Lapsus$ threat actor group, and Yanluowang ransomware operators.”
6. Bio-Rad Laboratories, Inc. (NYSE:BIO)
Levin Easterly Partners’ Stake Value: $24,481,000
Percentage of Levin Easterly Partners’ 13F Portfolio: 2.18%
Number of Hedge Fund Holders(Q1): 45
Hercules, California-based Bio-Rad Laboratories, Inc. (NYSE:BIO) is a manufacturer and distributor of life science research and clinical diagnostic products that are sold worldwide. The company’s Life Science segment manufactures a range of reagents, apparatus, and laboratory instruments, while its Clinical Diagnostics segment manufactures informatics systems, test kits, specialized quality controls, and supports test systems for clinical laboratories. Bio-Rad Laboratories, Inc.’s (NYSE:BIO) stock made its lifetime high of $832.7 last year but has fallen considerably since then and is currently trading down by 26% year-to-date.
On August 5, Bio-Rad Laboratories, Inc. (NYSE:BIO) revealed that it will acquire Curiosity Diagnostics, Sp. Z. o. o. from Poland-based Scope Fluidics, S.A. for up to $170 million. The terms of the deal are pretty interesting where Bio-Rad Laboratories, Inc. (NYSE:BIO) will pay approximately $100 million to Scope Fluidics upfront in cash, and $70 million will be paid based on future milestones. According to the press release, Curiosity Diagnostics is a late-stage, pre-commercial platform company developing a sample-to-answer, rapid diagnostics PCR system for the molecular diagnostics market.
Click to continue reading and see Levin Easterly Partners’ Latest Portfolio: Top 5 Stock Picks.
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Disclosure: None. Levin Easterly Partners’ Latest Portfolio: Top 10 Stock Picks is originally published on Insider Monkey.
