In this article, we discuss the top 10 stock picks of John Armitage’s Egerton Capital. If you want to skip our detailed analysis of these stocks, go directly to the Top 5 Stock Picks of John Armitage’s Egerton Capital.
John Armitage is a British-Irish billionaire who founded Egerton Capital in 1994, and currently serves as the portfolio manager and chief investment officer of the London-based hedge fund. With Q3 securities valued at over $21 billion and discretionary assets under management of $27.4 billion, Egerton Capital invests primarily in the transportation, communications, information technology, finance, and consumer discretionary sectors.
After graduating from Pembroke College in 1981, Armitage started his career at Morgan Grenfell the same year, which was a leading London-based investment bank of its time. Armitage remained with Morgan Grenfell for 13 years, and was promoted as the director of the bank’s asset management division. He ventured out in 1994 to start his own hedge fund.
Employing equity long/short and long-only strategies, Egerton Capital chooses a fundamental, research-intensive approach to investing. The most notable stocks in the third quarter portfolio of John Armitage’s fund include Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:FB).
John Armitage of Egerton Capital
Our Methodology
We used the Q3 portfolio of John Armitage’s Egerton Capital to select the fund’s top 10 stock picks. We ranked the securities according to Egerton Capital’s stake value in each holding.
Top Stock Picks of John Armitage’s Egerton Capital
10. Comcast Corporation (NASDAQ:CMCSA)
Egerton Capital’s Stake Value: $910,251,000
Percentage of Egerton Capital’s 13F Portfolio: 4.32%
Number of Hedge Fund Holders: 75
Comcast Corporation (NASDAQ:CMCSA), a multinational American telecommunications conglomerate, is one of the top stock picks of John Armitage’s Egerton Capital, with the hedge fund increasing its stake in Comcast Corporation (NASDAQ:CMCSA) by 61% in the third quarter. Egerton Capital holds a $910.25 million position in the company, which represents 4.32% of the firm’s Q3 investments.
On October 26, Comcast Corporation (NASDAQ:CMCSA) declared a quarterly dividend of $0.25 per share, in line with previous, payable on January 26, 2022.
Comcast Corporation (NASDAQ:CMCSA) reported its Q3 results on October 28, posting earnings per share of $0.87, beating estimates by $0.12. Revenue over the period jumped 18.67% year-over-year to $30.30 billion, exceeding estimates by approximately $425 million.
Citi analyst Michael Rollins downgraded Comcast Corporation (NASDAQ:CMCSA) on December 15 to Neutral from Buy with a price target of $53, down from $60. The analyst believes the opportunity to unlock Comcast Corporation (NASDAQ:CMCSA)’s sum-of-parts value has become more difficult over the next 12 months, with pressure on cable multiples from slowing broadband growth.
Among the hedge funds tracked by Insider Monkey in the third quarter, 75 funds were bullish on Comcast Corporation (NASDAQ:CMCSA), down from 84 funds in the preceding quarter. First Eagle Investment Management is the biggest Comcast Corporation (NASDAQ:CMCSA) stakeholder, with more than 29 million shares worth $1.6 billion.
Just like Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:FB), Comcast Corporation (NASDAQ:CMCSA) is a notable stock from Egerton Capital’s Q3 portfolio.
Here is what ClearBridge Investments has to say about Comcast Corporation (NASDAQ:CMCSA) in its Q2 2021 investor letter:
“We funded the shift primarily with trims in Comcast following big gains in this name. Comcast is a long-term holding that has been and remains core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
Comcast, like Blackstone, has been a meaningful long-term holding whose stock performance has at times lagged its robust fundamental performance. Over the last nine months the stock price caught up some with the fundamentals and looked like it had more room to run. Our thesis on the name evolved, however, following the May 17 announcement that competitor Discovery was merging its operations with Time Warner. This deal positions the new company as a credible competitor to Netflix, Amazon Prime, Hulu and Disney, and results in Comcast being left without the proverbial dance partner in the evolving pay TV/DTC landscape. While we continue to believe Comcast’s cable systems business is well-positioned and that NBCUniversal remains valuable, the competitive dynamic for NBCUniversal has stiffened. Our reduced position size reflects both our continued enthusiasm for many parts of the franchise and emerging concerns given the evolving pay TV/DTC landscape.”
9. Canadian National Railway Company (NYSE:CNI)
Egerton Capital’s Stake Value: $916,455,000
Percentage of Egerton Capital’s 13F Portfolio: 4.35%
Number of Hedge Fund Holders: 42
Canadian National Railway Company (NYSE:CNI) is a Canadian freight railway organization from Montreal, operating in Canada, the American Midwest, and Southern United States. Egerton Capital acquired a position in Canadian National Railway Company (NYSE:CNI) during the third quarter of 2021, buying 7.92 million shares of the company, worth $916.45 million, representing 4.35% of the fund’s Q3 investments.
Canadian National Railway Company (NYSE:CNI) announced on November 3 that it is partnering with Renewable Energy Group, Inc. (NASDAQ:REGI), to test advanced renewable fuel blends that will support the company’s sustainability goals. Canadian National Railway Company (NYSE:CNI) is aiming for reduced greenhouse gas emissions from its locomotive fleet.
Publishing its Q3 results on October 19, Canadian National Railway Company (NYSE:CNI) reported an EPS of $1.23, beating estimates by $0.08. The quarterly revenue equaled $2.90 billion, up 11.81% year-over-year, surpassing estimates by $78.78 million.
Stephens analyst Justin Long raised the price target on Canadian National Railway Company (NYSE:CNI) to $132 from $126 and kept an Equal Weight rating on the shares on January 4. He has updated his Q4, 2022, and 2023 estimates ahead of earnings season to reflect reported AAR volumes and adjustments to several expense-related items in the rails group.
Billionaire Chris Hohn’s TCI Fund Management is the largest Canadian National Railway Company (NYSE:CNI) stakeholder, with 36.6 million shares, worth $4.24 billion. Overall, 42 hedge funds were long Canadian National Railway Company (NYSE:CNI) during the third quarter, with stakes totaling $7.3 billion.
8. CSX Corporation (NASDAQ:CSX)
Egerton Capital’s Stake Value: $989,311,000
Percentage of Egerton Capital’s 13F Portfolio: 4.70%
Number of Hedge Fund Holders: 56
John Armitage owns 33.2 million CSX Corporation (NASDAQ:CSX) shares as of September 2021, worth $989.3 million, representing 4.70% of his fund’s Q3 investments. CSX Corporation (NASDAQ:CSX) is a Florida-based rail transportation and real estate holding company.
CSX Corporation (NASDAQ:CSX) declared a $0.093 per share dividend on October 7, in line with previous. The dividend was paid on December 15, 2021.
In the third quarter earnings report, published on October 20, CSX Corporation (NASDAQ:CSX) announced an EPS of $0.43, beating estimates by $0.05. Revenue for the period gained 24.32% from the prior-year quarter, reaching $3.29 billion, outperforming estimates by roughly $230 million.
Stephens analyst Justin Long raised the price target on CSX Corporation (NASDAQ:CSX) on January 4 to $43 from $39 and kept an Overweight rating on the shares. Moving into 2022, he thinks the focus for rail group investors could shift more towards the industry’s ability to improve service metrics and drive better volume growth.
Of the 56 hedge funds that were bullish on CSX Corporation (NASDAQ:CSX) in the third quarter, Soroban Capital Partners is the largest company stakeholder, holding a total of 39.5 million shares worth $1.17 billion.
7. The Charles Schwab Corporation (NYSE:SCHW)
Egerton Capital’s Stake Value: $1,039,011,000
Percentage of Egerton Capital’s 13F Portfolio: 4.93%
Number of Hedge Fund Holders: 59
The Charles Schwab Corporation (NYSE:SCHW), a California-based multinational financial services company, is one of the top stock picks of John Armitage’s Q3 portfolio. Egerton Capital boosted its stake in The Charles Schwab Corporation (NYSE:SCHW) by 127% in the third quarter, owning a total of 14.2 million shares worth $1.03 billion, representing 4.93% of the fund’s 13F securities.
The Charles Schwab Corporation (NYSE:SCHW), on October 26, declared a $0.18 per share quarterly dividend, in line with previous, paid on November 26.
On October 15, The Charles Schwab Corporation (NYSE:SCHW) published its Q3 results. The company posted earnings per share of $0.84, exceeding estimates by $0.03. The quarterly revenue came in at $4.57 billion, up 86.68% year-over-year, surpassing estimates by $47.10 million. The Charles Schwab Corporation (NYSE:SCHW) is expecting balance sheet growth in Q4, and the company’s assets climbed to $7.98 trillion in October.
Deutsche Bank analyst Brian Bedell raised the price target on The Charles Schwab Corporation (NYSE:SCHW) to $120 from $100 and kept a Buy rating on the shares on December 17. The analyst heads into 2022 “even more constructive than at the start of 2021” on the brokers, asset managers, and exchanges sector.
David Blood and Al Gore’s Generation Investment Management is one of the leading stakeholders of The Charles Schwab Corporation (NYSE:SCHW), with 12.9 million shares worth $940.4 million. Overall, 59 hedge funds reported owning stakes worth $4.5 billion in The Charles Schwab Corporation (NYSE:SCHW) in Q3 2021.
Here is what Ariel Fund & Ariel Appreciation Fund has to say about The Charles Schwab Corporation (NYSE:SCHW) in its Q3 2021 investor letter:
“Additionally, financial services provider Charles Schwab Corporation (SCHW) was another strong performer in the period. Management has made progress increasing new and existing customer engagement through its multichannel approach and low-cost, high value product offerings—bolstering the company’s competitive positioning. Elevated interest rate expectations have been another driver of performance as SCHW reinvests deposits in securities and earns a spread. In our view, SCHW has the ability to weather various macro-economic and competitive pressures by flexing its scale and customer centric focus in support of the company’s industry leading cost advantage. We also believe the TD Ameritrade acquisition will create incremental value and further enhance SCHW’s market place standing and long-term growth trajectory.”
6. Linde plc (NYSE:LIN)
Egerton Capital’s Stake Value: $1,052,110,000
Percentage of Egerton Capital’s 13F Portfolio: 4.99%
Number of Hedge Fund Holders: 46
Linde plc (NYSE:LIN) is a multinational company specializing in industrial gas production, medical gas and air separation, physical plant engineering, and logistics services, headquartered in Dublin, Ireland. Linde plc (NYSE:LIN) stock represents 4.99% of Egerton Capital’s Q3 portfolio, with the fund owning 3.5 million shares of the company, worth $1.05 billion.
Offering a forward yield of 1.34%, Linde plc (NYSE:LIN) declared a quarterly dividend per share of $1.06, in line with previous. The company paid the dividend on December 16 to shareholders of record on December 3.
Linde plc (NYSE:LIN) published its third quarter financial results on October 28, posting earnings per share of $2.73, beating estimates by $0.07. The $7.67 billion revenue exceeded estimates by $140.09 million.
Societe Generale analyst Peter Clark on January 4 raised the price target on Linde plc (NYSE:LIN) to $400 from $365 and reiterated a Buy rating on the shares. Linde plc (NYSE:LIN) is entering its sixth consecutive year as one of the analyst’s top sector picks, and the company is set for “structurally stronger growth and profitability, and even lower earnings volatility than it currently enjoys.”
46 hedge funds in the Q3 database of Insider Monkey were bullish on Linde plc (NYSE:LIN), down from 55 funds in the preceding quarter. Nicolai Tangen’s Ako Capital is the largest Linde plc (NYSE:LIN) stakeholder, with 3.80 million shares worth $1.12 billion.
In addition to Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:FB), Linde plc (NYSE:LIN) is a notable stock from John Armitage’s third quarter portfolio.
Click to continue reading and see Top 5 Stock Picks of John Armitage’s Egerton Capital.
Suggested articles:
- 10 Healthcare Stocks to Buy According to Lee Ainslie’s Maverick Capital
- 10 High Dividend Stocks to Buy According to Billionaire Lee Cooperman
- 10 Tech Stocks to Buy According to Billionaire Philippe Laffont
Disclosure: None. Top 10 Stock Picks of John Armitage’s Egerton Capital is originally published on Insider Monkey.
