In this article, we discuss Paul Marshall and Ian Wace’s 10 stock picks: Biogen Inc (BIIB), Apple Inc (AAPL) and More based on Q2 holdings of the fund. If you want to skip our detailed analysis of Marshall and Wace’s history, investment philosophy, and hedge fund performance, go directly to the Paul Marshall and Ian Wace’s Top 5 Stock Picks.
Ian Gerald Patrick Wace is a British financier who was born in January 1963. Wace worked as a director for 11 years at S. G. Warburg & Co. He worked as the head of European equities sales in 1988, head of proprietary trading in 1993, and head of international trading in 1994. He became the head of equities and derivatives trading at Deutsche Morgan Grenfell in 1995.
Paul Roderick Clucas Marshall was born in England. He acquired an MBA degree from the INSEAD business school in Fontainebleau, France. Marshall worked for S. G. Warburg & Co.’s fund management subsidiary, Mercury Asset Management.
Ian Wace and Paul Marshall co-founded Marshall Wace LLP in 1997, a hedge fund that they now operate together; Wace is the CEO and chief risk officer, while Marshall is the chairman and chief investment officer. Marshall Wace LLP manages many long-short equities funds. The hedge fund released MW TOPS, the world’s first “Alpha Capture” program, in 2002. The software polls equities sell-side practitioners worldwide for their investment ideas, then utilizes computers to analyze and optimize this data into liquid stock portfolios. In the second quarter of 2021, the total value of the Marshall Wace LLP 13F portfolio is $22.16 billion.
As of the second quarter of 2021, some notable stock picks of Paul Marshall and Ian Wace’s portfolio include Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL).
On September 17, Tigress Financial analyst Ivan Feinseth raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $366 from $303 and reiterated a “Buy” rating on the shares.
Another notable stock in Paul Marshall and Ian Wace’s portfolio is Amazon.com, Inc. (NASDAQ: AMZN). The investor owns a $280.36 million stake in the company. On September 14, Evercore ISI analyst Mark Mahaney raised his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $4,700 from $4,200 and maintained an “Outperform” rating on the shares.
Paul Marshall and Ian Wace also has a stake in Apple Inc. (NASDAQ:AAPL), in which their fund owns 1.31 million shares worth $179.25 million. On September 9, Piper Sandler analyst Harsh Kumar raised his price target on Apple Inc. (NASDAQ:AAPL) to $175 from $165 and reiterated an “Overweight” rating on the shares.
Ian Wace of Marshall Wace
Why it is important to pay attention to hedge funds’ stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context and industry outlook in mind, let’s start our list of the Paul Marshall and Ian Wace’s stock picks: Biogen Inc (BIIB), Apple Inc (AAPL) and More. We picked stocks from the Q2 portfolio of Marshall and Wace.
Paul Marshall and Ian Wace’s Stock Picks: Biogen Inc (BIIB), Apple Inc (AAPL) and More.
10. Zoetis Inc. (NYSE:ZTS)
Marshall and Wace’s Stake Value: $177,281,000
Percentage of Paul Marshall and Ian Wace’s 13F Portfolio: 0.8%
Number of Hedge Fund Holders: 58
Zoetis Inc. (NYSE:ZTS) discovers, develops, produces, and markets animal health medications, vaccines, and diagnostic products. The company was founded in 1952 and is placed tenth on the list of Paul Marshall and Ian Wace’s stock picks. Zoetis Inc. (NYSE:ZTS) stock has returned more than 23.39% to investors during the course of the past 12 months.
On August 25, Argus analyst Jasper Hellweg raised his price target on Zoetis Inc. (NYSE:ZTS) to $225 from $195 and maintained a “Buy” rating on the shares. On August 5, Zoetis Inc. (NYSE:ZTS) declared earnings for the second quarter of 2021. It posted earnings per share of $1.19, beating the estimates by $0.10. Revenue for the second quarter of 2021 was $1.9 billion, up 22.6% YoY, surpassing the expectations by $70 million.
In the second quarter of 2021, Marshall Wace LLP reduced its stake in Zoetis Inc. (NYSE:ZTS) by 45% to 951,285 shares. Nicolai Tangen’s Ako Capital is Zoetis Inc.’s (NYSE:ZTS) most significant stakeholder, with 2.43 million shares worth $453.27 million.
Polen Capital, in its second-quarter 2021 investor letter, mentioned Zoetis Inc. (NYSE: ZTS). Here is what the fund said:
“As is usually the case, Portfolio turnover was modest during the quarter. We trimmed Zoetis. The Zoetis trim is simply an acknowledgement of the company’s current valuation, which we assess is elevated.”
9. Apple Inc. (NASDAQ:AAPL)
Marshall and Wace’s Stake Value: $179,247,000
Percentage of Paul Marshall and Ian Wace’s 13F Portfolio: 0.81%
Number of Hedge Fund Holders: 138
Apple Inc. (NASDAQ:AAPL) designs, manufactures and sells smartphones, laptops, tablets, wearables, and accessories. The company was incorporated in 1977 and stands ninth on the list of Paul Marshall and Ian Wace’s stock picks. Apple Inc. (NASDAQ:AAPL) currently has a $2.46 trillion market capitalization.
On September 16, South China Morning Post reported that Apple Inc.’s (NASDAQ:AAPL) official store on JD.com received more than 2 million iPhone 13 pre-orders, up from 1.5 million iPhone 12 pre-orders on the same site during last year’s launch time.
Marshall Wace LLP holds 1.31 million shares of Apple Inc. (NASDAQ:AAPL), worth $179.25 million. In the second quarter of 2021, 138 hedge funds in the database of Insider Monkey held stakes in Apple Inc. (NASDAQ:AAPL), up from 127 the preceding quarter. Legendary investor and billionaire Warren Buffett’s Berkshire Hathaway is the biggest stakeholder in Apple Inc. (NASDAQ:AAPL) out of the 873 hedge funds tracked by Insider Monkey, in the second quarter of 2021. The Oracle of Omaha owns 887.14 million shares of the company worth $121.50 billion.
ClearBridge Investments, in its first-quarter 2021 investor letter, mentioned Apple Inc. (NASDAQ: AAPL). Here is what the fund said:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
8. ViacomCBS Inc. (NASDAQ:VIAC)
Marshall and Wace’s Stake Value: $208,464,000
Percentage of Paul Marshall and Ian Wace’s 13F Portfolio: 0.94%
Number of Hedge Fund Holders: 71
ViacomCBS Inc. (NASDAQ:VIAC) is a diversified global media and entertainment company based in the United States. The company was founded in 1986 and ranks eighth on the list of Paul Marshall and Ian Wace’s stock picks. ViacomCBS Inc. (NASDAQ:VIAC) currently has a $26.32 billion market capitalization and was able to deliver 32.59% return in the past 12 months.
On August 18, ViacomCBS Inc. (NASDAQ:VIAC) partnered with Comcast Corporation (NASDAQ:CMCSA) to begin SkyShowtime, a new streaming service to debut in more than 20 European territories. Wells Fargo analyst Steven Cahall upgraded ViacomCBS Inc. (NASDAQ:VIAC) to “Overweight” from “Equal Weight” setting a price target at $60, up from $45.
Paul Marshall and Ian Wace’s hedge fund decreased its hold in ViacomCBS Inc. (NASDAQ:VIAC) by 23% in the second quarter, with 4.61 million shares worth $208.46 million. In the second quarter of 2021, 71 hedge funds in Insider Monkey’s database of 873 funds held stakes in ViacomCBS Inc. (NASDAQ:VIAC), compared to 89 funds in the previous quarter.
7. Biogen Inc. (NASDAQ:BIIB)
Marshall and Wace’s Stake Value: $225,534,000
Percentage of Paul Marshall and Ian Wace’s 13F Portfolio: 1.01%
Number of Hedge Fund Holders: 67
Biogen Inc. (NASDAQ:BIIB) is a biotech company that develops, produces, and distributes treatments for neurological and neurodegenerative disorders. It was incorporated in 1978 and is placed seventh on the list of Paul Marshall and Ian Wace’s stock picks. Biogen Inc. (NASDAQ:BIIB) has offered investors 9.37% in returns over the past 12 months.
On September 17, Biogen Inc. (NASDAQ:BIIB) declared that the EMA’s Committee for Medicinal Products for Human Use had given Vumerity a favorable opinion for approval in the EU. Vumerity is a next-generation oral fumarate used to treat relapsing-remitting multiple sclerosis in adults. On September 16, UBS analyst Colin Bristow lowered his price target on Biogen Inc. (NASDAQ:BIIB) to $442 from $475 but kept a “Buy” rating on the shares. The analyst is adding Tofersen phase 3 data to his model since it is “anticipated any day,” but he also adds that his revised price target incorporates an increase in Aduhelm gross-to-net assumption from 15% to 30%.
Marshall Wace LLP holds 651,320 shares in Biogen Inc. (NASDAQ:BIIB), worth over $225.53 million. This represents 1.01% of their portfolio. The hedge fund’s stake in Biogen Inc. (NASDAQ:BIIB) increased by 301% in the second quarter of 2021, the latest data reveals. Biogen Inc. (NASDAQ:BIIB) is also getting the attention of the smart money, as 67 hedge funds tracked by Insider Monkey reported owning stakes in the company in the second quarter of 2021, up from 63 funds a quarter earlier.
Longleaf Partners Fund, in its second-quarter investor letter, highlighted a few stocks, and Biogen Inc. (NASDAQ:BIIB) is one of them. Here is what the fund said:
“Biogen (51%, 1.78%), a biotechnology company specializing in therapies for the treatment of neurological diseases, contributed in a way that warrants a longer than usual writeup. When we first began buying the company in early January, the stock scored well on all three Business, People and Price criteria, but the range of outcomes was wider than most investments for us. On the business, while the company has had a leading position in neuroscience for decades, it had become a collection of assets that was hard for the stock market to value. This led to most short-term investors focusing on year-over-year (YOY) earnings declines in 2021 and pipeline uncertainty. We focused most on strong cash flows from Biogen’s Multiple Sclerosis franchise, a growing yet hidden biosimilars business, and a pipeline that we believed was actually quite interesting and diversified beyond the manic market focus on Aducanumab, a proposed treatment for Alzheimer’s. On the people front, we also liked what the board and management had been doing (large, discounted repurchases and prudent internal and external investments) and not doing (no big, dumb M&A or unsustainable dividends). Our single point appraisal was around $375/share, but we saw a range at the low end of slightly above $250 if the pipeline totally failed or approaching $500 if the company saw a reasonable amount of pipeline success. We also thought that we were effectively paying a very low double-digit multiple of FCF/share. It is important to note that we were not betting on our science expertise or any other predictions that fall outside our circle of competence. Rather, we used our bottom-up appraisal skills to find a security that was mispriced at that given moment – we had followed the company for over 10 years before our purchase – and that shorter-term investors were afraid to own due to the potential for near-term stock price volatility. We started with a partial position, as we felt the wider-than-usual range of outcomes and uncertainty around the stock could lead to the chance to fill it out at a better price later.
On June 7, the FDA approved Aducanumab (now known as Aduhelm) after a contentious process that has yet to fully play out. The stock shot upward, and our single point value increased to $425. With the stock trading at that level, we exercised our price discipline and sold our position. In this era of “multi-decade-compounders at any price” and given Southeastern’s history of being long term, it feels weird to be in and out of something so quickly. But it also feels OK to be able to use our appraisal skills to secure a payoff for our long-term clients. The company’s stock price has fallen since our sale, and we will continue to watch the price-to-value (P/V) gap going forward.”
6. Thermo Fisher Scientific Inc. (NYSE:TMO)
Marshall and Wace’s Stake Value: $252,319,000
Percentage of Paul Marshall and Ian Wace’s 13F Portfolio: 1.14%
Number of Hedge Fund Holders: 87
Thermo Fisher Scientific Inc. (NYSE:TMO) provides life science solutions, analytical equipment, specialized diagnostics, and laboratory goods and services. The company was incorporated in 1956 and is ranked sixth on the list of Paul Marshall and Ian Wace’s stock picks. Thermo Fisher Scientific Inc. (NYSE:TMO) has returned 39.10% to investors over the past 12 months.
On September 8, Thermo Fisher Scientific Inc. (NYSE:TMO) announced that it intends to open a manufacturing plant in Nashville to produce single-use technologies products. On August 4, Credit Suisse analyst Katie Tryhane initiated coverage of Thermo Fisher Scientific Inc. (NYSE:TMO) with an “Outperform” rating and gave a price target of $580.
Paul Marshall and Ian Wace’s hedge fund owns 500,167 shares of Thermo Fisher Scientific Inc. (NYSE:TMO), worth $252.32 million. There were 87 hedge funds in our database that held stakes in Thermo Fisher Scientific Inc. (NYSE:TMO) in the second quarter of 2021, compared to 79 funds in the previous quarter. Select Equity Group is Thermo Fisher Scientific Inc.’s (NYSE:TMO) most significant stakeholder, with 576,252 shares worth $290.70 billion.
Just like Amazon.com, Inc. (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL), Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the stock picks of Paul Marshall and Ian Wace.
In its second-quarter 2021 investor letter, DEVON Equity Management mentioned Thermo Fisher Scientific Inc. (NYSE:TMO). Here is what the fund said:
“The broad response to the COVID pandemic from the healthcare, pharmaceutical, and life science industries has been nothing short of incredible. Whilst Vaccine makers understandably garner the highest profile, Thermo Fisher (6.2% of NAV) should be considered one of the outstanding performers, reflected in their ‘COVID related revenue’ hitting US$9.4bn in the 12 months since March 2020 (we appreciate measuring ‘contribution’ to the pandemic by ‘dollars’ generated is a little crude – but ultimately it does tell us something) …” (Click here to see the full text)
Click to continue reading and see Paul Marshall and Ian Wace’s Stock 5 Stock Picks.
Suggested articles:
- Billionaire Andreas Halvorsen’s Top Stock Picks
- Billionaire David Abrams’ Top Stock Picks
- 10 Best Stock Picks and Investments Of Billionaire Chamath Palihapitiya
Disclosure: None. Paul Marshall and Ian Wace’s Stock Picks: Biogen Inc (BIIB), Apple Inc (AAPL) and More is originally published on Insider Monkey.
