In this article, we discuss the top 10 stock picks of Alec Litowitz and Ross Laser’s Magnetar Capital. If you want to skip our detailed analysis of Litowitz’s and Laser’s history, investment philosophy, and hedge fund performance, go directly to the Top 5 Stock Picks of Alec Litowitz and Ross Laser’s Magnetar Capital.
Magnetar Capital, a multi-strategy alternative investment manager, was founded in 2005, and as of May 1, 2022, it roughly had $13.8 billion in assets under management. Its headquarters are in Evanston, Illinois, with offices in New York, London, and Beijing. A “magnetar” is a neutron star with a powerful magnetic field that produces energy bursts.
Before joining the hedge fund in 2005, Alec Litowitz spent nine years as a principal at Citadel Investment Group, where he served as Global Head of Equities. Meanwhile, Ross Laser formerly worked at Glenwood Capital Partners. However, Magnetar Capital announced on June 7 that David Snyderman had been named managing partner by its founder and CEO, Litowitz. While co-founder Laser will continue to operate the firm as President, Litowitz will transition to Senior Advisor position.
“The reason I’m comfortable implementing this transition now is because I believe the firm is so well-positioned,” Litowitz said in the letter, noting that the company is “coming off two of our most successful years.”
Litowitz said he intends to utilize his almost three decades in the hedge fund industry to “solve some of society’s biggest challenges.”
“We’re at a unique moment in time where rapid advances in data and technology, coupled with major shifts in human behavior, will drastically alter the future of how we live, work and play.”
Magnetar Capital invests opportunistically in various alternative credit and fixed income, energy and infrastructure, and systematic investment techniques to produce steady risk-adjusted returns. It invests in public and private markets across regions and business structures, using fundamental and quantitative analysis. Magnetar Capital made $9.7 billion in net profit for investors since its inception through March 31. The hedge fund’s 13F portfolio is above $9.96 billion as of Q1 2022. Some of the most notable stocks in the fund’s portfolio are Broadcom Inc. (NASDAQ:AVGO), Thermo Fisher Scientific Inc. (NYSE:TMO), and Alphabet Inc. (NASDAQ:GOOG).
Alex Litowitz of Magnetar Capital
Our Methodology
With this industry outlook in mind, let’s start our list of top 10 stock picks of Magnetar Capital. We used Litowitz and Laser’s 13F portfolio for Q1 2022 for this analysis.
Top Stock Picks of Magnetar Capital
10. CMC Materials, Inc. (NASDAQ:CCMP)
Magnetar Capital’s Stake Value: $143,821,000
Percentage of Magnetar Capital’s 13F Portfolio: 1.53%
Number of Hedge Fund Holders: 35
CMC Materials, Inc. (NASDAQ:CCMP) is a consumable materials provider for the semiconductor and pipeline industries. 35 out of the 912 hedge funds held stakes in CMC Materials, Inc. (NASDAQ:CCMP) in the first quarter of 2022, worth $894.58 million, compared to 26 funds in the preceding quarter holding stakes in CMC Materials, Inc. (NASDAQ:CCMP) totaling $514.08 million.
CMC Materials, Inc. (NASDAQ:CCMP) was downgraded from Buy to Neutral by CL King analyst David Silver on April 7. In a research note to investors, Silver predicted that the upside over the medium term would be modest and that there would be few roadblocks to fast merger completion. In December, Entegris, Inc. (NASDAQ:ENTG) agreed to pay $6.5 billion in cash and shares to buy CMC Materials, Inc. (NASDAQ:CCMP).
Along with CMC Materials, Inc. (NASDAQ:CCMP), Broadcom Inc. (NASDAQ:AVGO), Thermo Fisher Scientific Inc. (NYSE:TMO), and Alphabet Inc. (NASDAQ:GOOG) are also some of the stocks to buy according to Magnetar Capital.
In the first quarter, Magnetar Capital sold 11,326 shares of CMC Materials, Inc. (NASDAQ:CCMP), reducing its remaining stake by about 2%. At the end of Q1 of 2022, the hedge fund still held 775,732 shares of CMC Materials, Inc. (NASDAQ:CCMP), worth about $143.82 million. This represented 1.53% of the investment portfolio of Magnetar Capital.
In its Q4 2021 investor letter, Carillon Tower Advisers mentioned CMC Materials, Inc. (NASDAQ:CCMP). Here is what the fund said:
“CMC Materials supplies consumable materials used in semiconductor chip production as well as oil pipelines. Shares rose after it was announced the firm had reached an agreement to be acquired by a materials sciences company that is another of the fund’s holdings in a cash and stock deal valuing the company at a healthy premium to the prior close price. We believe this acquisition makes a lot of sense given the increasing importance of critical chemicals used by chip makers at smaller nodes.”
9. Rogers Corporation (NYSE:ROG)
Magnetar Capital’s Stake Value: $145,933,000
Percentage of Magnetar Capital’s 13F Portfolio: 1.55%
Number of Hedge Fund Holders: 24
Rogers Corporation (NYSE:ROG) creates engineered materials and components for mission-critical applications, and it designs, develops, manufactures, and sells them. Rogers Corporation (NYSE: ROG) stated on January 25 that its shareholders had approved DuPont de Nemours, Inc. (NYSE:DD)’s previously announced the acquisition of Rogers. Under the merger agreement’s terms, Rogers’ investors will receive $277.00 in cash for each share of Rogers capital stock they own immediately before the transaction’s adequate time.
On the other hand, Rogers Corporation (NYSE:ROG) slumped 3% on May 13 on news that China’s antitrust clearance of DuPont de Nemours, Inc. (NYSE:DD) $5.2 billion purchase will take longer than planned.
The number of hedge funds tracked by Insider Monkey owning stakes in Rogers Corporation (NYSE: ROG) reduced to 24 in Q1 2022, from 28 in the preceding quarter. These stakes hold a collective value of over $657.87 million. Among these hedge funds, Magnetar Capital held the most prominent position in Rogers Corporation (NYSE: ROG), with stakes valued at $145.93 million.
8. Sanderson Farms, Inc. (NASDAQ:SAFM)
Magnetar Capital’s Stake Value: $147,513,000
Percentage of Magnetar Capital’s 13F Portfolio: 1.57%
Number of Hedge Fund Holders: 35
Sanderson Farms, Inc. (NASDAQ:SAFM) is a chicken producer that produces, processes, markets, and distributes fresh, frozen, processed, and ready-to-eat chicken. Consumer Edge analyst Connor Rattigan lowered Sanderson Farms, Inc. (NASDAQ:SAFM) from Overweight to Equal Weight on June 16.
As per Insider Monkey’s Q1 database, 35 elite funds loaded up on Sanderson Farms, Inc. (NASDAQ:SAFM), owning stakes worth over $889.80 million. In contrast, 33 hedge funds held stakes in the Mississippi-based company in the previous quarter, worth $761.88 million.
Magnetar Capital started investing in Sanderson Farms, Inc. (NASDAQ:SAFM) during Q2 of 2020, purchasing shares worth $225,000. At the end of Q1 2022, the hedge fund owned 786,777 Sanderson Farms, Inc. (NASDAQ:SAFM) shares, valued at over $147.51 million. The company made up 1.57% of the hedge fund’s portfolio.
7. Welbilt, Inc. (NYSE:WBT)
Magnetar Capital’s Stake Value: $154,091,000
Percentage of Magnetar Capital’s 13F Portfolio: 1.64%
Number of Hedge Fund Holders: 31
Welbilt, Inc. (NYSE:WBT) creates, produces, and distributes food and beverage equipment worldwide for the retail food service industry. Reducing its stake in Welbilt, Inc. (NYSE:WBT) by 1% in Q1 2022, Magnetar Capital held 6.49 million company shares worth $154.09 million. The stock has consistently featured on the hedge fund’s portfolio since Q2 2021.
Welbilt, Inc. (NYSE:WBT) rose 0.8% on June 17 after the European Commission provisionally authorized its acquisition by Ali Group. The decision came after Pentair plc (NYSE:PNR) agreed in March to pay $1.6 billion for Manitowoc, a prominent manufacturer of commercial ice makers held by Welbilt, Inc. (NYSE:WBT).
As per Insider Monkey’s Q1 2022 database, 31 hedge funds tracked by Insider Monkey held stakes in Welbilt, Inc. (NYSE:WBT), down from 35 in the previous quarter. These stakes hold an aggregate value of over $1.09 billion. Icahn Capital LP is Welbilt, Inc. (NYSE:WBT)’s largest shareholder, with shares worth $264.82 million.
Turtle Creek Asset Management mentioned Welbilt, Inc. (NYSE:WBT) in its Q1 2022 investor letter. Here is what the firm has to say:
“The final example is Welbilt Inc. (NYSE:WBT), a company we had followed for years, but only added to our portfolio in mid-2020. As with many companies, its share price declined significantly in the March 2020 COVID Crash, falling by more than two-thirds. But whereas the share prices of many of the companies we owned quickly rebounded, Welbilt’s share price was still at a low point months later. By July of 2020, the stock was relatively attractive, so we added it to both TCEF and Turtle Creek United States Equity Fund at around $6.50 per share.5 During the last quarter of 2020, the share price rose into the low teens, during which time we trimmed the position by half…” (Click here to see the full text)
6. Shaw Communications Inc. (NYSE:SJR)
Magnetar Capital’s Stake Value: $160,115,000
Percentage of Magnetar Capital’s 13F Portfolio: 1.7%
Number of Hedge Fund Holders: 23
Shaw Communications Inc. (NYSE:SJR) is a telecommunications firm based in Canada that offers phone, Internet, TV, and mobile services. Shaw Communications Inc. (NYSE:SJR) was upgraded to Outperform from Sector Perform by National Bank analyst Adam Shine on May 18, with a price objective of C$40.50.
According to Magnetar Capital’s 13F filings for Q1 2022, the hedge fund owned 5.16 million Shaw Communications Inc. (NYSE:SJR) shares, valued at $160.12 million, representing 1.7% of the total securities for the period. The hedge fund trimmed its position in Shaw Communications Inc. (NYSE:SJR) by 1% in the first quarter.
Rogers Communications Inc. (NYSE:RCI) announced on May 30 that it will not complete its proposed C$20 billion ($15.8 billion) acquisition of Shaw Communications Inc. (NYSE:SJR) until it has reached an agreement with the competition bureau or the competition tribunal has rendered its decision.
At the end of the first quarter of 2022, 23 hedge funds in the database of Insider Monkey held stakes worth $891.89 million in Shaw Communications Inc. (NYSE:SJR), up from 19 the preceding quarter worth $731.09 million. Millennium Management is the leading shareholder of Shaw Communications Inc. (NYSE:SJR) with 7.90 million shares worth over $245.53 million.
In addition to Broadcom Inc. (NASDAQ:AVGO), Thermo Fisher Scientific Inc. (NYSE:TMO), and Alphabet Inc. (NASDAQ:GOOG), Shaw Communications Inc. (NYSE:SJR) is one of the stocks in the Q1 portfolio of Magnetar Capital.
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Disclosure: None. Top 5 Stock Picks of Alec Litowitz and Ross Laser’s Magnetar Capital is originally published on Insider Monkey.
