In this article, we will discuss the top 5 stock picks of Donald Sussman’s Paloma Partners. If you want to read our detailed analysis of Sussman’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stock Picks of Donald Sussman’s Paloma Partners.
5. Monster Beverage Corporation (NASDAQ:MNST)
Paloma Partners Stake Value: $21,568,000
Percentage of Paloma Partners’ 13F Portfolio: 0.38%
Number of Hedge Fund Holders: 46
Monster Beverage Corporation (NASDAQ:MNST) is a beverage company located in California that makes and sells energy beverages. The company features on the list of the top 10 stock picks of Donald Sussman’s Paloma Partners.
In the third quarter of 2021, Monster Beverage Corporation reported earnings per share of $0.63 below the estimates by $0.04. However, the company also reported revenue amounting to $1.41 billion, surpassing forecast estimates by $20 million. Donald Sussman’s Paloma Partners presently holds 236,100 shares of Monster Beverage Corporation, amounting to $21.57 million in worth and representing 0.38% of the fund’s portfolio.
On November 2, Deutsche Bank analyst Steve Powers lowered his price target on Monster Beverage to $105 from $108 and kept a “Buy” rating on the shares.
By the end of the second quarter of 2021, 46 hedge funds out of the 873 tracked by Insider Monkey held stakes in the company, worth $2.31 billion, compared to 45 hedge funds in the previous quarter worth $2.38 billion.
4. Activision Blizzard, Inc. (NASDAQ:ATVI)
Paloma Partners Stake Value: $22,111,000
Percentage of Paloma Partners’ 13F Portfolio: 0.39%
Number of Hedge Fund Holders: 78
Activision Blizzard, Inc. (NASDAQ:ATVI), which is on the list of top 10 stock picks of Donald Sussman’s Paloma Partners, announced its third-quarter 2021 results on November 2. The American video game holding company’s revenue grew by 6.2% to $1.88 billion in the third quarter. Total MAUs for the third quarter was 390 million, compared to 408 million in the second quarter.
On November 3, MKM Partners analyst Eric Handler downgraded Activision Blizzard to “Neutral” from “Buy” with a price target of $75, down from $108. According to the analyst, the company’s reported delays of Overwatch 2 and Diablo 4 are no longer major growth drivers for 2022.
As of the end of the second quarter, 78 hedge funds tracked by Insider Monkey reported owning stakes in Activision Blizzard, Inc. (NASDAQ:ATVI). The total worth of these stakes is $3.65 billion. Paloma Partners holds 231,673 shares in the firm, worth over $22.11 million. The latest data reveals that the hedge fund’s stake in Activision Blizzard, Inc. stock increased by 3256% in the second quarter of 2021.
In its third-quarter 2021 investor letter, Cooper Investors mentioned Activision Blizzard, Inc. (NASDAQ:ATVI). Here is what the fund said:
“In late July the California Department of Fair Employment and Housing filed a complaint against Activision Blizzard. Based on a two-year investigation, it accused the company of failing to comply with the state’s workplace protection laws. Specifically: the unfair treatment of women including the lack of women in leadership positions, the difficulties they have faced in gaining promotions and discrepancy in pay. The suit also described Activision Blizzard’s culture as a “breeding ground” for harassment against women. The US Equal Employment Opportunity Commission also launched a lawsuit against the company along similar grounds.
Our investment in Activision Blizzard is predicated on an attractive industry backdrop for video game publishers, with positive trends for the owners of the best intellectual property as they monetise their content across multiple vectors (console/PC, mobile, Free to Play, Live Services etc.). It is our belief that they are the owners of the best portfolio of IP in gaming, and their strategy to focus resource here would lead to a significant increase in free cash flow generation over the coming years.
However, this is a moot point if the company is culturally unsound. Attractive financial outcomes cannot persist without the company culture necessary to support them. Further, Cooper Investors’ Responsible Investing framework codifies our belief that financial or shareholder outcomes, whilst important, are not the solitary performance indicator of a company.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Paloma Partners Stake Value: $23,882,000
Percentage of Paloma Partners’ 13F Portfolio: 0.43%
Number of Hedge Fund Holders: 271
Among the list of top 10 stock picks of Donald Sussman’s Paloma Partners is Amazon.com, Inc. (NASDAQ:AMZN), an American multinational tech company. For the third quarter, the company posted lower-than-expected results. The company’s EPS was $6.12, missing the estimates by $2.81. In addition, AWS net sales came in at $11.6 billion, vs. forecast of $15.40 billion.
Hedge fund sentiment increased for Amazon.com, Inc. in the second quarter. Insider Monkey’s data shows that 271 elite hedge funds held stakes in the company at the end of the second quarter, up from 243 funds a quarter earlier.
Polen Capital, an investment management firm, in its third-quarter 2021 investor letter, mentioned Amazon.com, Inc. (NASDAQ:AMZN). Here is what the fund said:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
2. Meta Platforms, Inc. (NASDAQ:FB)
Paloma Partners Stake Value: $24,056,000
Percentage of Paloma Partners’ 13F Portfolio: 0.43%
Number of Hedge Fund Holders: 266
Meta Platforms, Inc. (NASDAQ:FB)’s Facebook platform has 2.91 billion monthly active users in the third quarter of 2021, providing advertisers with a mix of reach, relevance, social context, and engagement to boost the value of their advertising.
Hedge funds are loading up on Meta Platforms, Inc. (NASDAQ:FB), as Insider Monkey’s data shows that 266 hedge funds held a stake in the company as of the end of the second quarter of 2021, compared to 257 funds in the previous quarter. The stock returned 21.24% year to date.
On October 26, Truist analyst Youssef Squali reduced his price target on Facebook to $400 from $425 but maintained a “Buy” rating on the shares.
In the third quarter 2021 investor letter of Polen Capital, the fund mentioned Meta Platforms, Inc. (NASDAQ:FB), and discussed its opinion on the firm. Here is what the fund said:
“Facebook’s stock was pressured on concerns about regulation in the quarter. We are constantly monitoring the potential regulatory risks to Facebook (and all of our holdings). At this point, we see very little chance that regulation changes Facebook’s business model in a meaningful and adverse way. Regarding the recent data shared by a former Facebook employee and the company itself on some of the unfortunate negative consequences of social media, we recognize these types of issues will inevitably linger in different forms and fashions well into the future. We have been focused on the ability of
Facebook to identify and mitigate these negative consequences while amplifying the value users typically cite for its apps across a long list of use cases. We continuously monitor the vibrance of the user base on Facebook’s apps to confirm that value.”
1. Colgate-Palmolive Company (NYSE:CL)
Paloma Partners Stake Value: $24,405,000
Percentage of Paloma Partners’ 13F Portfolio: 0.44%
Number of Hedge Fund Holders: 58
Colgate-Palmolive Company (NYSE:CL), the manufacturer and seller of consumer products, makes it way to the list of top 10 stock picks of Donald Sussman’s Paloma Partners. In the second quarter, the company’s revenue was $4.41 billion increasing 6.3% year over year.
On November 2, Berenberg analyst Fulvio Cazzol lowered his price target on Colgate-Palmolive to $77 from $85 and reiterated a “Hold” rating on the shares. Cazzol informs investors that the firm recorded mixed Q3 results, declining margins due to rising raw material and distribution expenses. In addition, the company announced a quarterly dividend of $0.45 per share, in line with the previous.
First Eagle Investment Management is the company’s largest shareholder, with shares worth $880.83 million. Overall, 58 hedge funds tracked by Insider Monkey have stakes in Colgate-Palmolive Company (NYSE:CL) in Q2 2021, up from 48 in the previous quarter.
First Eagle Investment Management, in its first-quarter 2021 investor letter, mentioned Colgate-Palmolive Company (NYSE:CL). Here is what the fund said:
“The leading detractors in the quarter (included) Colgate-Palmolive Company. After a strong 2020 fueled in part by lockdown-driven demand, consumer staples stocks generally cooled during the first quarter as investors shifted attention to the more economically sensitive areas of the market likely to benefit from re-openings and improved discretionary spending. The effects of this rotation could be seen in the share price underperformance of names like Colgate-Palmolive.”
You can also take a peek at Billionaire Stephen Mandel’s Top 10 Stock Picks and Growth Stock Portfolio: 10 Stock Picks By Hedge Funds
