In this article, we discuss the top 10 stocks to buy according to billionaire Steve Cohen. If you want to skip our detailed analysis of these stocks, go directly to the Top 5 Stocks to Buy According to Billionaire Steve Cohen.
Steve Cohen is the founder, president, and chief executive officer of Point72 Asset Management, which is a privately held American hedge fund. Cohen is an economics graduate from the Wharton School at the University of Pennsylvania, and he started his financial career right after completing his Bachelor’s degree in 1978 as a junior trader at Gruntal & Co. He had a successful career at Gruntal & Co but eventually left to start his own hedge fund, S.A.C Capital Advisors in 1992.
SAC Capital Advisors was known for frequent and rapid trading, and after some regulatory issues, the fund shifted its investment operations to Point72 Asset Management in 2014. As of Q3 2021, Cohen’s Point72 Asset Management is responsible for a $22.7 billion 13F portfolio and discretionary assets under management of $117.5 billion. The fund’s Q3 investments are focused on the information technology, industrials, healthcare, finance, consumer discretionary, energy, and communications sectors. Point72 Asset Management has a top ten holdings concentration of 15.44%.
Billionaire Steve Cohen purchased 381 new equities, bought additional stakes in 304 companies, sold out of 307, and reduced holdings in 255 stocks. His top buys for Q3 2021 were International Business Machines Corporation (NYSE:IBM), Twitter, Inc. (NYSE:TWTR), and Thermo Fisher Scientific Inc. (NYSE:TMO). Whereas, he reduced holdings in Amazon.com, Inc. (NASDAQ:AMZN), Micron Technology, Inc. (NASDAQ:MU), and Western Digital Corporation (NASDAQ:WDC).
The most notable stocks from Steve Cohen’s Point72 Asset Management include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG).
Steven Cohen of Point72 Asset Management
Our Methodology
We used the Q3 portfolio of Steve Cohen’s Point72 Asset Management to select his top 10 stock picks, ranking the companies according to the billionaire’s stake value in each holding.
Top Stocks to Buy According to Billionaire Steve Cohen
10. Jabil Inc. (NYSE:JBL)
Point72 Asset Management’s Stake Value: $200,664,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 27
Jabil Inc. (NYSE:JBL) is a Florida-based manufacturing company that serves multiple sectors worldwide including healthcare, life sciences, clean technology, defense, aerospace, automotive, computing, consumer products, and telecommunications. Jabil Inc. (NYSE:JBL) is also known for its design engineering, supply chain, and logistics services.
Steve Cohen’s Point72 Asset Management owns 3.43 million Jabil Inc. (NYSE:JBL) shares as of Q3 2021, worth $200.6 million, representing 0.88% of the fund’s total investments.
In the first quarter earnings report for 2022, published by Jabil Inc. (NYSE:JBL) on December 16, the company posted an EPS of $1.92, beating estimates by $0.12. Revenue over the period jumped 9.38% year-over-year to $8.57 billion, outperforming estimates by $284.5 million.
On December 17, Raymond James analyst Melissa Fairbanks raised the price target on Jabil Inc. (NYSE:JBL) to $80 from $70 and kept a Strong Buy rating on the shares following the November quarter results. Fairbanks stated that Jabil Inc. (NYSE:JBL)’s recent diversification efforts will result in significant long-term secular growth trends across a number of end markets with more consistent, predictable margins, and returns through the cycle.
Of the 27 hedge funds that were long Jabil Inc. (NYSE:JBL) in the third quarter, one of the leading stakeholders of the company is Millennium Management, with 1.45 million shares worth over $85 million.
In addition to Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG), Jabil Inc. (NYSE:JBL) is a top stock pick of billionaire Steve Cohen.
9. Microsoft Corporation (NASDAQ:MSFT)
Point72 Asset Management’s Stake Value: $203,836,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.89%
Number of Hedge Fund Holders: 250
Billionaire Steve Cohen increased his stake in Microsoft Corporation (NASDAQ:MSFT) by 99% in the third quarter, holding 723,028 shares worth $203.8 million, representing 0.89% of the billionaire’s total investment portfolio.
Microsoft Corporation (NASDAQ:MSFT) reported its Q3 results on October 26, posting earnings per share of $2.27, beating estimates by $0.19. The revenue gained 21.97% from the preceding year quarter, totaling $45.32 billion, exceeding estimates by $1.33 billion.
SMBC Nikko analyst Steve Koenig on December 21 initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with an Outperform rating and a $410 price target, which represents about 28% upside from current levels. According to the analyst, Microsoft Corporation (NASDAQ:MSFT) is successfully transitioning its customers to the cloud, is “well positioned at the center of the big secular trends in software”, and is primed to capitalize on IT spending priorities.
Microsoft Corporation (NASDAQ:MSFT) is one of the most popular stocks among hedge funds, with 250 funds in the Q3 database of Insider Monkey holding stakes in the tech company, up from 238 funds in the prior quarter. Fisher Asset Management is the largest Microsoft Corporation (NASDAQ:MSFT) stakeholder as of the third quarter, with 25.5 million shares worth more than $7 billion.
Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue beating Street estimates by 4.5%, an acceleration in Commercial Cloud revenue to 31% constant-currency growth, a four-point improvement in Commercial Cloud gross margins (to 70% from 66%), and GAAP earnings up 42%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by TAM expansion across its disruptive cloud product portfolio, as more companies look to transform and digitize their businesses, as well as strong operating leverage as its cloud products gain scale.”
8. Visa Inc. (NYSE:V)
Point72 Asset Management’s Stake Value: $211,911,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.93%
Number of Hedge Fund Holders: 143
Visa Inc. (NYSE:V), a multinational financial services corporation offering digital transfer of funds via prepaid, debit, and credit cards, is one of the top stocks to buy according to billionaire Steve Cohen. Cohen’s Point72 Asset Management owns 951,341 Visa Inc. (NYSE:V) shares as of Q3 2021, worth approximately $212 million, accounting for 0.93% of the fund’s total investments.
On October 26, Visa Inc. (NYSE:V) announced its third quarter earnings. The company posted earnings per share of $1.62, exceeding estimates by $0.08. The Q3 revenue equaled $6.56 billion, surpassing estimates by $45.89 million.
Wedbush analyst Moshe Katri on December 20 lowered the price target on Visa Inc. (NYSE:V) to $240 from $270 and kept an Outperform rating on the shares. The analyst observed continued indications of choppy consumer spending, renewed pandemic-driven B&M shutdowns/travel slowdown, and reduced spending on non-discretionary items given inflationary pricing pressure on staple goods.
A total of 143 hedge funds tracked by Insider Monkey were bullish on Visa Inc. (NYSE:V) in the third quarter, holding stakes worth more than $26 billion. The largest Visa Inc. (NYSE:V) stakeholder is TCI Fund Management, increasing its stake in the company by 42% in Q3, holding 19.9 million shares valued at $4.4 billion.
Here is what L1 Capital has to say about Visa Inc. (NYSE:V) in its Q3 2021 investor letter:
“In our view, the payment network company, Visa, remains very well positioned to participate in an ever-expanding market for electronic payments. In time, ‘Buy now, Pay Later’ may have a modest impact on Visa’s transaction volumes, however in aggregate, we believe it will have the greater effect of supporting growth in electronic payments more broadly. Nearer term, we believe the recovery in international travel as the world gradually normalizes and learns to live with COVID-19 will be materially positive for Visa’s financial performance. eCommerce will also remain a positive key driver for Visa growth.”
7. International Business Machines Corporation (NYSE:IBM)
Point72 Asset Management’s Stake Value: $223,427,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.98%
Number of Hedge Fund Holders: 41
International Business Machines Corporation (NYSE:IBM) is a new arrival in Steve Cohen’s Q3 portfolio, with the billionaire’s hedge fund purchasing 1.60 million shares of the company worth $223.4 million. International Business Machines Corporation (NYSE:IBM) is a New York-based multinational technology corporation offering computer hardware, software, hosting services, nanotechnology, cloud computing, and IT consultancy, in addition to other relevant services.
International Business Machines Corporation (NYSE:IBM) announced its Q3 results on October 20, reporting an EPS of $2.52, beating estimates by $0.01. The revenue totaled $17.62 million, missing estimates by $191.84 million.
On December 7, Credit Suisse analyst Sami Badri assumed coverage of International Business Machines Corporation (NYSE:IBM) with an Outperform rating and a price target of $164.29.
Among the hedge funds tracked by Insider Monkey in the third quarter, 41 funds were long International Business Machines Corporation (NYSE:IBM), with stakes equaling $1.40 billion. Arrowstreet Capital is one of the leading International Business Machines Corporation (NYSE:IBM) stakeholders, with a $398.1 million position in the company.
6. Mastercard Incorporated (NYSE:MA)
Point72 Asset Management’s Stake Value: $235,979,000
Percentage of Point72 Asset Management’s 13F Portfolio: 1.03%
Number of Hedge Fund Holders: 146
Mastercard Incorporated (NYSE:MA), a multinational financial services corporation providing credit cards and payment systems, is a top stock pick of billionaire Steve Cohen’s Point72 Asset Management. The hedge fund owns a $235.9 million position in Mastercard Incorporated (NYSE:MA) as of Q3 2021, which accounts for 1.03% of the total investments.
Publishing its Q3 results on October 28, Mastercard Incorporated (NYSE:MA) posted earnings per share of $2.37, beating estimates by $0.18. The quarterly revenue was up 29.92% year-over-year, equaling $4.99 billion, outperforming estimates by $35.79 million.
Wedbush analyst Moshe Katri lowered the price target on Mastercard Incorporated (NYSE:MA) to $380 from $400 and kept an Outperform rating on the shares.
In Q3 2021, 146 hedge funds tracked by Insider Monkey were bullish on Mastercard Incorporated (NYSE:MA), down from 156 funds in the prior quarter. The leading company stakeholder is Akre Capital Management, holding 5.85 million Mastercard Incorporated (NYSE:MA) shares, worth more than $2 billion.
Just like Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG), Mastercard Incorporated (NYSE:MA) is a notable stock from billionaire Steve Cohen’s Q3 portfolio.
Here is what Polen Capital has to say about Mastercard Incorporated (NYSE:MA) in its Q3 2021 investor letter:
“Mastercard faced pressure as some believe these “old payment infrastructure” businesses will be disrupted by newer fintech companies using blockchain, buy now, pay later (BNPL), or other innovations to provide better/cheaper payment services. However, we believe that some of these technologies have meaningful limitations which could benefit existing payment networks. For example, BNPL transactions are often funded with cards and turn a one-time transaction into many smaller ones with more transaction fees for Mastercard. Just like with regulation, we continually monitor for competition and technological disruption. As of now, we do not see a significant risk in the foreseeable future to this company.”
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Disclosure: None. Top 10 Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.
