Below we present the list of Top 5 New Stocks Billionaire Ken Fisher Just Bought. For the full list and background on Ken Fisher, please see Top 10 New Stocks Billionaire Ken Fisher Just Bought.
- The Cheesecake Factory Incorporated (NASDAQ:CAKE)
Fisher Asset Management couldn’t resist taking a bite out of The Cheesecake Factory Incorporated (NASDAQ:CAKE) during Q3, buying 542,709 shares totaling 1.19% of the outstanding shares of CAKE. Bullishness for the stock hit a new high at the end of 2019 among the hedge funds tracked by Insider Monkey, but ownership of it declined by 19% during Q1 as the pandemic caused a mass reorganization of investment portfolios.
The Cheesecake Factory has weathered the Covid-19 storm as well as could be expected, expanding its pick-up and delivery options, which captured close to 40% of its sales mix. The company saw strong demand for indoor dining in Q3 as well, as 20 of its 187 locations that are currently serving indoor diners posted positive comparable sales year-over-year despite being limited to about 50% dining capacity.
- Sally Beauty Holdings, Inc. (NYSE:SBH)
Fisher Asset Management bought up nearly 2% of Sally Beauty Holdings, Inc. (NYSE:SBH)’s outstanding shares during Q3, 2.22 million in total, making a big investment in the supplier of beauty products. Multiple other hedge funds are extremely bullish on SBH, as Arrowstreet Capital (2.27 million shares) and Cliff Asness’ AQR Capital (3.68 million shares) also had large ownership stakes in the company as of June 30.
Sally Beauty shares are still down by 46% year-to-date, sliding down further on November 11 despite relatively impressive fiscal Q4 results. Net sales of $958 million were down by just 1% year-over-year following a 28% slide in fiscal Q3, while diluted EPS of $0.99 and free cash flow of $131 million were both strong. The company grew e-commerce sales by 69% during the quarter and managed to reduce its debt levels by nearly $450 million during its fiscal 2020.
- Kennametal Inc. (NYSE:KMT)
Kennametal Inc. (NYSE:KMT) was one of the largest new purchases made by Fisher Asset Management during Q3, as the investment firm bought just over 800,000 shares of the company that were valued at $23.17 million at the end of September. Hedge fund ownership of KMT sank to a 5-year low at the end of the first quarter of 2020 among the funds tracked by Insider Monkey as confidence in the industrial sector plummeted.
In its second quarter investor letter, John Rogers’ Ariel Investments, which owned 5.81 million KMT shares on June 30, expressed confidence in the initiatives undertaken by Kennametal to mitigate headwinds from Covid-19, stating:
“KMT continues to adjust production levels and is focused on managing costs while executing on its simplification/modernization and restructuring initiatives. We believe the scale, scope, quality, low- cost production and the value proposition of the cutting tools themselves also mitigate pricing pressure. Additionally, KMT continues to execute on its strategic plan to improve economies of scale and generate margin improvement, while gaining share in the marketplace.”
- Denny’s Corporation (NASDAQ:DENN)
Fisher Asset Management has taken a 3.75% stake in Denny’s Corporation (NASDAQ:DENN) after buying 2.39 million shares of the restaurant operator during the September quarter. Denny’s hit a 5-year high in hedge fund ownership at the end of Q2 among the funds tracked by Insider Monkey after there was a 15% increase in DENN ownership during Q2.
Denny’s has been hit particularly hard by Covid due to its exposure to the California market (25%), which has had some of the toughest dining restrictions in the U.S. In addition, the majority of its locations (70%) have been unable to maintain the chain’s customary 24/7 schedule. Same-store sales slid by 33.6% in Q3 and the company expects only slight better results for the full-year, with same-store sales expected to be between 70%-75% of 2019 levels.
- Dine Brands Global, Inc. (NYSE:DIN)
Topping the list, Fisher Asset Management bought 458,262 shares of Dine Brands Global, Inc. (NYSE:DIN) during Q3, taking a 2.79% stake in the company as hedge funds increasingly warm up to the quick service restaurant company, which owns and operates IHOP and Applebee’s. Among the hedge funds tracked by Insider Monkey there has been a 66% jump in ownership of DIN between the middle of 2019 and the middle of 2020.
DIN shares have given back most of the gains from their Pfizer announcement bump and remain down by 31% in 2020. Dine Brands announced at the end of October that it would close 100 of breakfast chain IHOP’s underperforming locations over the next six months, primarily locations with expiring leases or which are located in areas where traffic characteristics have deteriorated. The company is confident that it will eventually be able to replace these locations with more vibrant, better performing ones.
If you are in the mood to invest in some smaller companies that Ken Fisher has a ton of conviction in, don’t miss our article about the 10 Best Small-Cap Stocks To Buy Now.
Disclosure: None.
