In this article, we discuss the top 5 stock picks of Benjamin Smith’s Laurion Capital Management. If you want to see our detailed analysis of Smith’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stock Picks of Benjamin Smith’s Laurion Capital Management.
5. Dell Technologies Inc. (NYSE:DELL)
Laurion Capital Management’s Stake Value: $236.6 million
Percentage of Laurion Capital Management’s 13F Portfolio: 0.99%
Number of Hedge Fund Holders: 62
Dell Technologies Inc. (NYSE:DELL) is an American multinational technology company headquartered in Round Rock, Texas. Formed as a result of the September 2016 merger of Dell and EMC Corporation, the company provides numerous tech products and information security services.
At the end of the third quarter, Laurion Capital Management held 2.27 million shares of Dell Technologies Inc. (NYSE:DELL), worth $236.6 million, making up 0.99% of the fund’s portfolio holdings.
Paul Singer of Elliot Management is one of the biggest stakeholders of Dell Technologies Inc. (NYSE:DELL) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 62 funds were bullish on the company by the end of the June quarter, compared to 54 in the previous quarter.
On November 4, Citi analyst Jim Suva raised the price target on Dell Technologies Inc. (NYSE:DELL) to $70 from $65.76 and kept a Buy rating on the shares of the company.
Here is what Third Point Management has to say about Dell Technologies Inc. in its Q3 2021 investor letter:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
4. Alibaba Group Holding Limited (NYSE:BABA)
Laurion Capital Management’s Stake Value: $336.7 million
Percentage of Laurion Capital Management’s 13F Portfolio: 1.41%
Number of Hedge Fund Holders: 146
Despite suffering in recent months due to a Chinese government crackdown on dual-listed companies, Alibaba Group Holding Limited (NYSE:BABA), specializing in e-commerce and retail, remains one of the top tech stocks in the world.
By the end of the second quarter of 2021, 146 out of the elite 873 hedge funds tracked by Insider Monkey reported owning stakes in Alibaba Group Holding Limited (NYSE:BABA). The total worth of these stakes is $16.79 billion. This is compared to 135 funds that had stakes in the company in the previous quarter, with a total worth of $15.49 billion.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE:BABA) with 14.2 million shares worth more than $2.1 billion.
On November 2, Barclays analyst Jiong Shao initiated coverage of Alibaba Group Holding Limited (NYSE:BABA) with an Overweight rating and $275 price target. The analyst started the China Technology sector with a Positive view saying investors “cannot ignore or not invest” in China since it is the second largest economy in the world.
Longleaf Partners International Fund, in its Q3 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE:BABA). Here is what the fund had to say:
“Alibaba has non-earning assets which are still in money-losing investment mode (including the cloud business and community group buying), so returns and profitability are deeply understated. As these businesses grow and scale up, they should generate high margins that will accelerate profitability and return on equity (ROE) going forward, despite regulatory pressures at the margin. In the meantime, Alibaba bought $3.7 billion (bn) discounted shares since April 2021, and the company upsized its approved buyback plan, first from $6bn to $10bn in December 2020, and again to $15bn in August 2021.”
3. Viatris Inc. (NASDAQ:VTRS)
Laurion Capital Management’s Stake Value: $457.2 million
Percentage of Laurion Capital Management’s 13F Portfolio: 1.92%
Number of Hedge Fund Holders: 53
Formed through the merger of Mylan and Upjohn, a division of Pfizer Inc. (NYSE:PFE) in late 2020, Viatris Inc. (NASDAQ:VTRS) is a healthcare company that sells a variety of medicines, generics, and over-the-counter (OTC) drugs under the Xanax, Lipitor and Viagra brands.
As of Q3 2021, Laurion Capital Management owned over 33.7 million shares in Viatris Inc. (NASDAQ: VTRS) with an estimated market value of $457.2 million.
Of the 873 elite funds being tracked by Insider Monkey, 53 held stakes in Viatris Inc. (NASDAQ:VTRS) at the end of the second quarter, down from 58 in the preceding quarter. James Flynn of Deerfield Management is one of the leading shareholders in the company.
On November 16, Viatris Inc. (NASDAQ:VTRS) launched its new interchangeable insulin biosimilar drug, Semglee, in both, branded and unbranded formats. According to Bernstein analyst Ronny Gal, Viatris Inc. (NASDAQ:VTRS) effectively provided payers with the option to choose between a high price, high rebate product, or another that carries a lower price and features a lower rebate.
2. Marathon Petroleum Corporation (NYSE:MPC)
Laurion Capital Management’s Stake Value: $468.2 million
Percentage of Laurion Capital Management’s 13F Portfolio: 1.97%
Number of Hedge Fund Holders: 48
Marathon Petroleum Corporation (NYSE:MPC) is an Ohio-based petroleum refining, marketing, and transportation company that operates the largest refining system in the United States.
According to the 13F filings for the third quarter of 2021, Laurion Capital Management holds over 7.57 million shares of Marathon Petroleum Corporation (NYSE:MPC), amounting to more than $468.2 million and representing 1.97% of the investment firm’s portfolio. At the end of the second quarter of 2021, 48 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in Marathon Petroleum Corporation (NYSE:MPC), up from 46 the preceding quarter worth $1.9 billion.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Elliott Management is a leading shareholder in Marathon Petroleum Corporation (NYSE:MPC) with 10.57 million shares worth more than $653.3 million.
On November 15, Wells Fargo analyst Roger Read raised his price target on Marathon Petroleum Corporation (NASDAQ:MPC) to $87 from $73, and kept an Overweight rating on the shares of the company.
1. International Flavors & Fragrances Inc. (NYSE:IFF)
Laurion Capital Management’s Stake Value: $482 million
Percentage of Laurion Capital Management’s 13F Portfolio: 2.03%
Number of Hedge Fund Holders: 52
International Flavors & Fragrances Inc. (NYSE:IFF) is a New York-based corporation that produces and markets flavors, fragrances, and cosmetic actives, with manufacturing operations in over 47 different countries.
On November 12, Deutsche Bank analyst David Begleiter raised his price target on International Flavors & Fragrances Inc. (NYSE:IFF) to $170 from $162, and kept a Buy rating on the shares following what he calls a “mixed” Q3 report.
Benjamin Smith’s Laurion Capital Management currently holds over 3.6 million shares of International Flavors & Fragrances Inc. (NYSE:IFF). These shares are valued at $482 million and account for 2.03% of the hedge fund’s portfolio.
Scott Ferguson of Sachem Head Capital is one of the biggest stakeholders of International Flavors & Fragrances Inc. (NYSE:IFF) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 52 funds were bullish on the company by the end of the June quarter, compared to 55 in the previous quarter.
Rhizome Partners, an investment management firm, mentioned International Flavors & Fragrances Inc. (NYSE: IFF) in its first-quarter 2021 investor letter. Here’s what they said:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
You can also take a peek at 10 Best Dividend Champions to Buy Now and 10 Best Dividend Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management.
