In this article, we will discuss the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital. If you want to skip our detailed analysis of Steyer’s history, investment philosophy, and hedge fund performance, go directly to Top 5 Stocks To Buy According To Thomas Steyer’s Farallon Capital.
Renowned billionaire hedge fund manager, philanthropist, and environmentalist Thomas Steyer is the founder and former senior managing partner of the California-based global institutional asset management firm Farallon Capital Management. After earning his B.A. in Economics and Political Science from Yale University, Steyer began his career at Morgan Stanley. In 1979, he continued his education, earning his M.B.A from the Stanford Graduate School of Business. He later joined The Goldman Sachs Group where he served as an associate in the risk arbitrage division till 1985. A year later, he founded his own hedge fund in San Francisco.
According to the most recent 13F Filings, Farallon Capital Management manages more than $22.48 billion in its investment portfolio. The fund invests heavily in the Healthcare sector, which makes up over 36.5% of the investment fund’s portfolio. A majority of the companies present in the fund’s portfolio are large-cap stocks.
Some of the top stocks present in the investment portfolio of Farallon Capital Management at the end of the second quarter of 2021 include Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), T-Mobile Us, Inc. (NASDAQ:TMUS) and Willis Towers Watson Public Limited Company (NASDAQ:WLTW), among other discussed in detail below.
Our Methodology
With this background in mind, let us now look towards the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital. We made use of Farallon Capital Management’s 13F portfolio for the second quarter for this analysis.
Why should we pay attention to hedge fund activity? 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 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.
Top 10 Stocks To Buy According To Thomas Steyer’s Farallon Capital
10. Aramark (NYSE:ARMK)
Farallon Capital’s Stake Value: $454.8 million
Percentage of Farallon Capital’s 13F Portfolio: 2.02%
Number of Hedge Fund Holders: 36
Aramark (NYSE:ARMK) is a Pennsylvania-based company that operates as food services, facilities, and uniform service provider. The company serves clients in various industries, including education and healthcare. Aramark (NYSE:ARMK) ranks tenth on our list of the top 10 stocks to buy according to Thomas Steyer’s Farallon Capital.
On September 2, RBC Capital analyst Ashish Sabadra assumed coverage of Aramark (NYSE:ARMK) with a Sector Perform rating and $38 price target.
Of the 873 elite funds tracked by Insider Monkey, 36 were long in Aramark (NYSE:ARMK) at the end of June, compared to 39 in the first quarter of 2021. Thomas Steyer’s Farallon Capital Management holds over 12.2 million shares of Aramark (NYSE:ARMK), amounting to over $454.8 million and representing 2.02% of the fund’s portfolio value.
9. Slack Technologies, Inc. (NYSE:WORK)
Farallon Capital’s Stake Value: $462.4 million
Percentage of Farallon Capital’s 13F Portfolio: 2.05%
Number of Hedge Fund Holders: 61
Slack Technologies, Inc. (NYSE:WORK) is a California-based software development company that provides a communications platform for its clients worldwide. It ranks ninth on the list of top 10 stocks to buy according to Thomas Steyer’s Farallon Capital.
According to the latest filings, Farallon Capital Management owns 10.4 million shares of Slack Technologies, Inc. (NYSE:WORK) in the second quarter of 2021, worth $462.3 million. There were 61 hedge funds in our database that held stakes in Slack Technologies, Inc. (NYSE:WORK) in the second quarter, compared to 60 funds in the previous quarter.
8. Microsoft Corporation (NASDAQ:MSFT)
Farallon Capital’s Stake Value: $464 million
Percentage of Farallon Capital’s 13F Portfolio: 2.06%
Number of Hedge Fund Holders: 238
On September 17, Tigress Financial analyst Ivan Feinseth raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $366 from $303, and kept a Buy rating on the shares.
As of Q2 2021, Thomas Steyer’s hedge fund held over 1.7 million shares of the tech giant. These shares were valued at $464 million and represented 2.06% of his hedge fund’s portfolio value. By the end of the second quarter of 2021, 238 hedge funds out of the 873 tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), worth roughly $62.46 billion, compared to 251 hedge funds in the previous quarter, with stakes worth approximately $58.9 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
7. T-Mobile US, Inc. (NASDAQ:TMUS)
Farallon Capital’s Stake Value: $499.4 million
Percentage of Farallon Capital’s 13F Portfolio: 2.22%
Number of Hedge Fund Holders: 100
T-Mobile US, Inc. (NASDAQ:TMUS) is ranked seventh on our list of top 10 stock to buy according to Thomas Steyer’s Farallon Capital. The firm provides communication services and is headquartered in Washington. According to the latest filings, Farallon Capital Management owned 3.4 million shares in the company at the end of the second quarter of 2021 worth $499.4 million, representing 2.22% of the portfolio.
At the end of the second quarter of 2021, 100 hedge funds in the database of Insider Monkey held stakes worth $8.02 billion in T-Mobile US, Inc. (NASDAQ:TMUS), up from 98 the preceding quarter worth $9.06 billion.
On September 20, investment advisory Loop Capital initiated coverage of T-Mobile US, Inc. (NASDAQ:TMUS) stock with a Buy rating and a price target of $160.
ClearBridge Investments, an investment management firm, in its first-quarter 2021 investor letter mentioned T-Mobile US, Inc. (NASDAQ:TMUS). Here is what the firm said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”
6. Alphabet Inc. (NASDAQ:GOOG)
Farallon Capital’s Stake Value: $533.6 million
Percentage of Farallon Capital’s 13F Portfolio: 2.37%
Number of Hedge Fund Holders: 155
As of the end of the June quarter, 155 hedge funds out of the 873 tracked by Insider Monkey held stakes in Alphabet Inc. (NASDAQ:GOOG). Thomas Steyer’s Farallon Capital Management currently holds 212,917 shares in the company, worth more than $533.6 million, accounting for 2.37% of the fund’s total investment portfolio.
On October 12, JPMorgan analyst Doug Anmuth maintained an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) with a $3,250 price target, noting that the company was the most liked mega-cap internet stock.
In its Q2 2021 investor letter, Mawer Investment Management named Alphabet Inc. (NASDAQ:GOOG) among the companies that reported strong results. Here is what the fund said:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Alphabet. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
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Disclosure: None. Top 10 Stocks To Buy According To Thomas Steyer’s Farallon Capital is originally published on Insider Monkey.
