In this article, we discuss the top 5 stock picks of Glenn Greenberg’s Brave Warrior Capital. If you want to read our detailed analysis of Greenberg’s investment philosophy and performance, go directly to Top 10 Stock Picks of Glenn Greenberg’s Brave Warrior Capital.
5. Primerica, Inc. (NYSE:PRI)
Brave Warrior Capital’s Stake Value: $263,439,000
Percentage of Brave Warrior Capital’s 13F Portfolio: 9.04%
Number of Hedge Fund Holders: 13
Primerica, Inc. (NYSE:PRI) is an insurance, investment, and financial services firm that serves middle-income households in the United States and Canada. Its products are distributed and sold through a network of 129,515 licensed sales associates. The number of long hedge fund positions in Primerica, Inc. (NYSE:PRI) declined to 13 at the end of the second quarter, compared to 16 positions in the previous quarter. Primerica, Inc. (NYSE:PRI) accounted for about 9.04% of Brave Warrior Capital’s portfolio, as the hedge fund owned a $263.44 million stake in the company in Q2 2022.
After Primerica, Inc. (NYSE:PRI)’s Q2 results, Truist analyst Mark Hughes increased his price target on the company to $160 from $150 and reaffirmed a ‘Buy’ recommendation on the stock on August 10.
Baron Funds, in its Q1 2021 investor letter, mentioned Primerica, Inc. (NYSE: PRI) and shared its insights on the company. Here is what the fund said:
“While the market was focused on cyclical stocks during the quarter, we remain excited about the sustainable growth prospects of our secular growth oriented portfolio over our five-year investment horizon. We believe that end market conditions are improving for almost all our investments, most notably for those that did not benefit from a COVID-driven tailwind last year. We expect Primerica, Inc. to benefit from the recent rise in interest rates, as its investment portfolio generates more compelling returns and its fixed income products offer better yields.”
4. Lithia Motors, Inc. (NYSE:LAD)
Brave Warrior Capital’s Stake Value: $272,419,000
Percentage of Brave Warrior Capital’s 13F Portfolio: 9.35%
Number of Hedge Fund Holders: 40
Lithia Motors, Inc. (NYSE:LAD), a supplier of personal transportation solutions in the United States, ranks fourth on the list of top 10 stock picks of Glenn Greenberg’s Brave Warrior Capital. However, hedge funds sentiment reduced for Lithia Motors, Inc. (NYSE:LAD). At the close of Q2 2022, Insider Monkey found 40 hedge funds long Lithia Motors, Inc. (NYSE:LAD), down from 46 funds in the previous quarter.
Abrams Capital Management is the leading shareholder of Lithia Motors, Inc. (NYSE:LAD), with 2.35 million shares worth over $646.10 million. Next on the list is Glenn Greenberg’s Brave Warrior Capital. The hedge fund purchased an additional 106,194 shares of Lithia Motors, Inc. (NYSE:LAD) in the second quarter of 2022, increasing its stake by about 12%. At the end of the June quarter, the hedge fund held 991,301 shares of Lithia Motors, Inc. (NYSE:LAD), worth about $272.42 million, representing 9.35% of its portfolio.
On July 15, JPMorgan analyst Rajat Gupta maintained an ‘Overweight’ rating on the shares while cutting his price objective for Lithia Motors, Inc. (NYSE:LAD) to $325 from $380. Gupta predicted that franchise auto dealership performance would likely be characterized in the second quarter by low new vehicle unit sales and low used vehicle volumes, with only a small amount of relief coming from ongoing price increases on both new and used car sales.
Here is what Oakmark Funds had to say about Lithia Motors, Inc. (NYSE:LAD) in its Q1 2022 investor letter:
“As is typical during periods of significant volatility, we added a new name to the portfolio. Lithia Motors (NYSE:LAD) is the largest franchised auto dealer group in the United States. The company has a long history of creating shareholder value through best-in-class operations and consistent acquisitions of smaller dealers at attractive returns. There is a long runway for management to continue creating value through such acquisitions. Management believes this will drive earnings per share to more than $50 by 2025, even as car prices return to pre-pandemic levels. Meanwhile, Lithia has a significant opportunity to further accelerate growth through Driveway, its online auto retailing platform. We believe Lithia’s existing nationwide infrastructure provides Driveway with significant competitive advantages in e-commerce, which smaller dealers will struggle to replicate. Driveway is not generating any earnings today, but it could become a major contributor over the next five to seven years. With the stock priced at less than 7x management’s 2025 EPS target and with substantial future growth potential from Driveway, we believe Lithia shares are a bargain today…. (Click to read the full text).”
3. Fidelity National Financial, Inc. (NYSE:FNF)
Brave Warrior Capital’s Stake Value: $337,056,000
Percentage of Brave Warrior Capital’s 13F Portfolio: 11.57%
Number of Hedge Fund Holders: 36
Fidelity National Financial, Inc. (NYSE:FNF) offers title insurance and transaction services to the real estate and mortgage sectors. The hedge fund chaired by Greenberg held 9.12 million shares in Fidelity National Financial, Inc. (NYSE:FNF), worth over $337.06 million in Q2 2022. It is the third largest holding of Brave Warrior Capital.
Fidelity National Financial, Inc. (NYSE:FNF) recently experienced a decrease in hedge fund interest. Fidelity National Financial, Inc. (NYSE:FNF) was part of 36 hedge fund portfolios at the end of the second quarter of 2022. There were 38 hedge funds in our database with Fidelity National Financial, Inc. (NYSE:FNF) holdings at the end of the previous quarter.
On August 4, Barclays analyst Mark DeVries maintained an ‘Overweight’ rating on the stock while increasing his price objective to $68 from $66. According to DeVries’ research note to investors, the company’s Q2 results were strong across the board, led by commercial and margin strength. On August 2, Fidelity National Financial, Inc. (NYSE:FNF) published earnings for the second quarter, announcing earnings per share of $1.90, beating estimates by $0.29.
In its Q1 2021 investor letter, Merion Road Capital Management mentioned Fidelity National Financial, Inc. (NYSE:FNF). Here is what the fund said:
“During the period I added to our position in Fidelity National Financial (“FNF”). FNF is the nation’s largest title insurer with 33% market share. It was built over the last 30 years by Bill Foley, who revolutionized the industry with his emphasis on eliminating bureaucracy, utilizing technology to streamline operations, and maximizing customer service. He is well-regarded as a savvy investor and consummate deal-maker having acquired and divested multiple entities both in title and ancillary fields. He continues to serve as the chairman of FNF with a personal stake in the company worth hundreds of millions… (Click to read the full text)”.
2. Apollo Global Management, Inc. (NYSE:APO)
Brave Warrior Capital’s Stake Value: $360,110,000
Percentage of Brave Warrior Capital’s 13F Portfolio: 12.36%
Number of Hedge Fund Holders: 61
Apollo Global Management, Inc. (NYSE:APO) is a private equity business specializing in credit, private equity, and real estate investments. With a $360.11 million stake in Apollo Global Management, Inc. (NYSE:APO), Glenn Greenberg’s Brave Warrior Capital owned 7.43 million shares of the company as of the end of the second quarter of 2022, making it the most significant shareholder of the company.
Apollo Global Management, Inc. (NYSE:APO) was poised to lose control of the lighting components firm it owns after Lumileds Holdings reached a debt reduction arrangement and filed for bankruptcy on August 29. Lumileds Holdings struggled with supply chain challenges exacerbated by the situation in Ukraine.
On August 12, Deutsche Bank analyst Brian Bedell maintained a ‘Buy’ rating on Apollo Global Management, Inc. (NYSE:APO), while trimming his price objective from $91 to $87. Given the stock market rebound so far in Q3 and the “pretty strong” fundamentals seen in Q2, Bedell updated the macro assumptions in his models.
In addition, our database shows that 61 hedge funds held stakes in Apollo Global Management, Inc. (NYSE:APO) as of the end of the second quarter of 2022 versus 64 funds in the first quarter of 2022.
Miller Value Partners mentioned Apollo Global Management Inc. (NYSE:APO) in their Q4 2021 investor letter. Here is what the fund said:
“Apollo Global Management (NYSE:APO) rose 18.4% during the quarter. The company reported Q3 distributable earnings (DE) of $1.71, well ahead of consensus of $1.10 and the quarterly dividend of $0.50/share (2.8% annualized yield). Fee-related earnings of $300M beat by 7% while realized net performance fees of $312M topped estimates by 23%. Total assets under management (AUM) of $481.1Bn and fee-earning AUM of $361.3Bn both rose +2% sequentially on the back of robust capital raising with $18.1Bn of inflows over the period. Additionally, Apollo (NYSE:APO) hosted their 2021 Investor Day, outlining long-term financial targets including over $9/share in distributable earnings by 2026 (14% Compound Annual Growth Rate (CAGR) from $5.50 pro-forma 2022E) and fee-related earnings of $4.50-$4.75 (18% CAGR). Management expects to roughly double AUM by 2026 to $1trn from $481Bn currently with a 2.25x increase in fee-related revenues to $4.6Bn.”
1. Anthem, Inc. (NYSE:ANTM)
Brave Warrior Capital’s Stake Value: $584,538,000
Percentage of Brave Warrior Capital’s 13F Portfolio: 20.06%
Number of Hedge Fund Holders: 74
Anthem, Inc. (NYSE:ANTM) is a healthcare organization dedicated to improving people’s lives and making healthcare more accessible. Anthem’s connected enterprises serve more than 118 million people, including more than 45 million through its family of health plans. On June 28, Anthem received an official rebranding and started trading on the New York Stock Exchange under the new ticker code “ELV”.
Based on its 13F holdings for the second quarter of 2022, Brave Warrior Capital owned 1.21 million shares of Anthem, Inc. (NYSE:ANTM), valued at $584.54 million. First Eagle Investment Management is the leading stakeholder of Anthem, Inc. (NYSE:ANTM), with 2.01 million shares worth $970.47 million.
As of the end of the second quarter, 74 hedge funds in Insider Monkey’s database of 895 funds held stakes in Elevance Health Inc. (NYSE:ELV), compared to 69 funds in the previous quarter. On August 22, SVB Securities analyst Whit Mayo raised Elevance Health Inc. (NYSE:ELV) from ‘Market Perform’ to ‘Outperform,’ with a $580 price objective, up from $490.
ClearBridge Investments, in its Q4 2021 investor letter, mentioned and discussed its stance on the firm. Here is what the fund said:
“The quarter also saw strong showings from Anthem; has been operating well and is a key player in the evolution of health care insurance and delivery, providing more integrated and cost-effective solutions and receiving a tailwind from an aging population. The company tends to be volatile based on changes in medical loss ratios (MLR), though we view this volatility as a short term for business models that are able to reprice policies relatively quickly. We added significantly to the position during the year.”
You can also take a peek at Top 10 Stock Picks of Cinctive Capital Management and Top 10 Stock Picks of Mark Gallogly’s Centerbridge Partners.
