Top 10 Stock Picks of Dmitry Balyasny’s Hedge Fund

Published on September 30, 2022 at 9:19 am by Umar Farooq in Hedge Fund Analysis, Hedge Funds, News

In this article, we discuss the top 10 stock picks of Dmitry Balyasny’s hedge fund. If you want to skip our detailed analysis of Balyasny’s investment philosophy and performance, go directly to the Top 5 Stock Picks of Dmitry Balyasny’s Hedge Fund.

Dmitry Balyasny is the managing partner and chief investment officer of Balyasny Asset Management, which was established in December 2001. Dmitry serves as the Executive Committee’s chair and actively participates in daily corporate investing. He started his trading career in 1994 with Schonfeld Securities, LLC, and has been a regular contributor to the hedge fund industry since 1999. Dmitry graduated from Loyola University in Chicago with a bachelor’s degree in finance. He serves on the boards of both the Chicago chapter of the Ayn Rand Institute and Teach for America Chicago. Dmitry assists in promoting the Institute’s educational and community engagement initiatives across the greater Chicago area.

As of March 1, 2022, Balyasny Asset Management had approximately $14.8 billion in client assets on a discretionary basis. The hedge fund last reported 13F filing for Q2 2022 included $30.721 billion in managed 13F securities and a top 10 holdings concentration of 8.45%. Balyasny Asset Management’s largest holding is SPDR S&P 500 ETF TRUST, with 1,259,397 shares. Other notable stocks in the 13F portfolio of Dmitry Balyasny during Q2 include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Oracle Corporation (NYSE:ORCL).

Dmitry Balyasny of Balyasny Asset Management

Our Methodology

At Insider Monkey, we cover the portfolios of 895 hedge funds, closely tracking the stocks they buy and sell. We selected the ten stocks discussed in this article based on the 13F regulatory filing submitted by Balyasny Asset Management with the SEC for the quarter ending June 30. These are the top ten stock picks from Balyasny’s latest portfolio.

10. Switch, Inc. (NYSE:SWCH)

Balyasny Asset Management’s Stake Value: $150.597 million

Percentage of Balyasny Asset Management’s 13F Portfolio: 0.49%

Number of Hedge Fund Holders as of Q2, 2022: 31

Switch, Inc. (NYSE:SWCH) offers colocation space as well as related services through its subsidiary Switch, Ltd. It builds and manages data centers in Georgia, Michigan, and Nevada. The business provides services to the cloud, IT, and software suppliers as well as technology and digital media corporations, banks, governments, and other organizations. Switch, Inc. (NYSE:SWCH) was established in 2000 and it is based in Las Vegas, Nevada.

Brookfield Asset Management and Switch, Inc. (NYSE:SWCH) were in acquisition negotiations in May of this year, reported Bloomberg. However, DigitalBridge Group, Inc. (NYSE:DBRG) defeated Brookfield’s bid. Switch, Inc. (NYSE:SWCH) stated on May 11 that it had entered into a formal agreement with Australian infrastructure manager IFM and DigitalBridge Group, Inc. (NYSE:DBRG) to be acquired at $34.25 per share in an all-cash deal valued at around $11 billion. Switch, Inc. (NYSE:SWCH) has a solid dividend history. It has consistently paid a dividend to stockholders over the past three years. During this time, these payouts have also consistently increased.

According to the 13F filings for the second quarter of 2022, Balyasny Asset Management held 4.49 million shares of Switch, Inc. (NYSE:SWCH), amounting to more than $150.59 million. The company represented 0.49% of the hedge fund’s 13F portfolio. Pentwater Capital Management held the most prominent stake in Switch, Inc. (NYSE:SWCH), with 6.53 million shares worth $218.59 million.

09. Wells Fargo & Company (NYSE:WFC)

Balyasny Asset Management’s Stake Value: $153.219 million

Percentage of Balyasny Asset Management’s 13F Portfolio: 0.49%

Number of Hedge Fund Holders as of Q2, 2022: 83

Wells Fargo & Company (NYSE:WFC), a diversified financial services company, provides banking, investment, mortgage, and consumer finance products and services in the United States and internationally. On September 12, Wells Fargo & Company (NYSE:WFC) price target was trimmed by Deutsche Bank analyst Matt O’Connor from $62 to $60 while maintaining a Buy rating for the stock. O’Connor informs investors in a research note that although there has been some reprieve in recent weeks, the banks have underperformed this year mostly due to recession fears. According to the analyst, banks are down approximately 25% since their January highs and are pricing in a 55%–60% likelihood of a moderate–to–severe recession.

Davis Opportunity Fund, in its Q4 2021 investor letter, mentioned Wells Fargo & Company (NYSE:WFC) and discussed its stance on the firm. Here is what the fund said.

“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”

08. Eli Lilly and Company (NYSE:LLY)

Balyasny Asset Management’s Stake Value: $155.582 million

Percentage of Balyasny Asset Management’s 13F Portfolio: 0.5%

Number of Hedge Fund Holders as of Q2, 2022: 70

Eli Lilly and Company (NYSE:LLY) discovers, develops, and markets human pharmaceuticals worldwide. The latest data shows that the hedge fund led by Balyasny owned 479,851 shares in Eli Lilly and Company (NYSE:LLY) at the end of the second quarter of 2022, worth close to $155 million, representing 0.5% of the portfolio. Ken Fisher’s Fisher Asset Management is the leading shareholder of Eli Lilly and Company (NYSE:LLY) during Q2, holding 5.9 million shares worth $1.92 billion.

On September 22, Eli Lilly and Company (NYSE:LLY) was raised by UBS analyst Colin Bristow from Neutral to Buy with a $363 price target, up from $335. Eli Lilly and Company (NYSE:LLY) is now seen by the analyst to be the large-cap pharmaceutical company with the highest potential for growth. On September 26, the Equal Employment Opportunity Commission filed a lawsuit against Lilly USA, a division of Eli Lilly (NYSE:LLY), over claims of widespread age discrimination. The Commission is of the opinion that the Indianapolis-based business deliberately broke the law by refusing to hire elderly workers.

In its Q2 2022 investor letter, Baron Health Care Fund mentioned Eli Lilly and Company (NYSE:LLY) and explained its insights for the company. Here is what the fund said:

“Eli Lilly and Company is a global pharmaceutical company focused on discovering, developing, and selling medicines for patients in the therapeutic areas of diabetes, oncology, immunology, and neuroscience. Stock performance was strong due to positive study results for Eli Lilly’s drug Tirzepatide (subsequently branded Mounjaro), which delivered up to 22.5% weight loss in adults with obesity. We think Tirzepatide is in the early innings of adoption in a large obesity market where penetration of anti-obesity medications is currently low. We continue to think Eli Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to solid revenue and earnings growth over many years.”

07. Allegion plc (NYSE:ALLE)

Balyasny Asset Management’s Stake Value: $157.046 million

Percentage of Balyasny Asset Management’s 13F Portfolio: 0.51%

Number of Hedge Fund Holders as of Q2, 2022: 33

Allegion plc (NYSE:ALLE) is a global manufacturer and distributor of mechanical and electrical security devices and systems. The company was founded in 2013. It currently has a $7.82 billion market capitalization. The stock fell 34% in the past 12 months. On September 21, Mizuho analyst Brett Linzey cut his price target on Allegion plc (NYSE:ALLE) to $114 from $125 and reiterated a Buy rating on the shares.

Allegion plc manufactures and sells mechanical and electronic security products and solutions worldwide. Allegion plc (NYSE:ALLE) was incorporated in 2013 and is based in Dublin, Ireland. Nicolai Tangen’s Ako Capital is holding the largest stake in Allegion plc (NYSE:ALLE) during Q2, holding 2.46 million of its shares worth $241.75 million.

At the end of the second quarter of 2022, 33 hedge funds in the database of Insider Monkey held stakes worth $1.176 billion in Allegion plc (NYSE:ALLE), compared to 28 in the preceding quarter worth roughly $777 million. Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Oracle Corporation (NYSE:ORCL), Allegion plc (NYSE:ALLE) is one of the best stocks to buy, according to Balyasny Asset Management.

06. Lululemon Athletica Inc. (NASDAQ:LULU)

Balyasny Asset Management’s Stake Value: $158.685 million

Percentage of Balyasny Asset Management’s 13F Portfolio: 0.51%

Number of Hedge Fund Holders as of Q2, 2022: 50

Lululemon Athletica’s (NASDAQ:LULU) Q2 comparable sales and margin performance surprised analysts, who now have a generally bullish outlook on the sports apparel firm. On September 16, analyst Matthew Boss with JPMorgan boosted his price target for Lululemon Athletica Inc. (NASDAQ:LULU) from $396 to $464 while maintaining an Overweight rating on the stock.

Balyasny Asset Management upped its stake in Lululemon Athletica’s (NASDAQ:LULU) during Q2 by a whopping 832%. The fund currently holds 582,095 of Lululemon Athletica’s (NASDAQ:LULU) shares worth $158.68 million. Out of the 895 hedge funds that Insider Monkey was following, 50 had Lululemon Athletica Inc. (NASDAQ:LULU) holdings at the end of the second quarter of 2022, with a total market value of $1.266 billion. When compared to the previous quarter, there were 44 hedge funds that held stakes totaling about $763 million.

Along with Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Oracle Corporation (NYSE:ORCL), Lululemon Athletica Inc. (NASDAQ:LULU) is one of the best stocks to buy, according to Balyasny Asset Management.

Click to continue reading and see the Top 5 Stock Picks of Dmitry Balyasny’s Hedge Fund.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

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Click to continue reading…

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