In this article, we discuss the top 5 stock picks of John Armitage’s Egerton Capital. If you want our detailed analysis of these stocks, go directly to the Top 10 Stock Picks of John Armitage’s Egerton Capital.
5. Visa Inc. (NYSE:V)
Egerton Capital’s Stake Value: $1,125,033,000
Percentage of Egerton Capital’s 13F Portfolio: 5.34%
Number of Hedge Fund Holders: 143
Visa Inc. (NYSE:V), a multinational financial services corporation known for electronic fund transfers via debit, credit, and prepaid cards, is one of the top holdings of Egerton Capital. The hedge fund owns more than 5 million shares of Visa Inc. (NYSE:V), worth $1.12 billion, representing 5.34% of the fund’s total Q3 investments.
Visa Inc. (NYSE:V) announced on December 15 a new share repurchase authorization of $12 billion, which brings the total funds available for future share repurchases to $13.2 billion. These authorizations do not have an expiration date.
Visa Inc. (NYSE:V) declared a $0.375 per share quarterly dividend on October 26, up 17.2% from the prior-quarter dividend of $0.320. The dividend was paid on December 7 to shareholders of record on November 12.
Wedbush analyst Moshe Katri lowered the price target on Visa Inc. (NYSE:V) to $240 from $270 and kept an Outperform rating on the shares on December 20. The analyst observed continued indications of choppy consumer spending, renewed pandemic-driven B&M shutdowns/travel slowdown, and lower spending on non-discretionary items given inflationary pricing pressure on staple goods.
TCI Fund Management is the biggest Visa Inc. (NYSE:V) stakeholder as of September 2021, with the hedge fund owning almost 20 million shares of the company, worth $4.44 billion. Overall, 143 funds were bullish on the stock during Q3.
Here is what L1 Capital has to say about Visa Inc. (NYSE:V) in its Q3 2021 investor letter:
“In our view, the payment network company, Visa, remains very well positioned to participate in an ever-expanding market for electronic payments. In time, ‘Buy now, Pay Later’ may have a modest impact on Visa’s transaction volumes, however in aggregate, we believe it will have the greater effect of supporting growth in electronic payments more broadly. Nearer term, we believe the recovery in international travel as the world gradually normalizes and learns to live with COVID-19 will be materially positive for Visa’s financial performance. eCommerce will also remain a positive key driver for Visa growth.”
4. Microsoft Corporation (NASDAQ:MSFT)
Egerton Capital’s Stake Value: $1,135,663,000
Percentage of Egerton Capital’s 13F Portfolio: 5.39%
Number of Hedge Fund Holders: 250
John Armitage owns more than 4 million Microsoft Corporation (NASDAQ:MSFT) shares as of September 2021, worth $1.13 billion, representing 5.39% of his Q3 portfolio.
SMBC Nikko analyst Steve Koenig on December 21 initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with an Outperform rating and a $410 price target, citing the company’s successful transition to the cloud, and Microsoft Corporation (NASDAQ:MSFT) being “well positioned at the center of the big secular trends in software”.
In the third quarter of 2021, 250 hedge funds were long Microsoft Corporation (NASDAQ:MSFT), with total stakes amounting to $65.8 billion. Fisher Asset Management is the leading Microsoft Corporation (NASDAQ:MSFT) stakeholder, holding 25.5 million shares worth $7.19 billion.
Here is what ClearBridge Sustainability Leaders Strategy has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:
“The Strategy modestly outperformed the benchmark; consistent with our fundamental approach that seeks balanced exposure to industries and the growth and value spectrum, performance was driven by companies from diverse sectors. Microsoft, which develops software including the Windows family of products, the Microsoft Office system and the Azure cloud platform, and is a leader in data protection and customer privacy as well as human rights and diversity, contributed strongly as earnings maintained positive sentiment. Microsoft is seeing a number of businesses reach a new, higher level of engagement, adoption and momentum.”
3. Charter Communications, Inc. (NASDAQ:CHTR)
Egerton Capital’s Stake Value: $1,528,358,000
Percentage of Egerton Capital’s 13F Portfolio: 7.26%
Number of Hedge Fund Holders: 74
Charter Communications, Inc. (NASDAQ:CHTR), an American telecommunications and mass media company, is one of the top stock picks of John Armitage’s Egerton Capital. The hedge fund elevated its stake in Charter Communications, Inc. (NASDAQ:CHTR) by 21% during Q3 2021, holding a total of 2.1 million shares worth $1.52 billion, representing 7.26% of the 13F securities.
Wolfe Research analyst John Janedis on January 3 downgraded Charter Communications, Inc. (NASDAQ:CHTR) to Underperform from Peer Perform with a price target of $621, down from $712, citing his view that cable operators will continue to see slower growth in their core broadband business over both the near and long-term.
As of September 2021, 74 hedge funds were long Charter Communications, Inc. (NASDAQ:CHTR), with stakes amounting to $18.79 billion. Berkshire Hathaway is one of the largest Charter Communications, Inc. (NASDAQ:CHTR) stakeholders, holding a $3.05 billion position in the company.
Here is what ClearBridge Investments has to say about Charter Communications, Inc. (NASDAQ:CHTR) in its Q1 2021 investor letter:
“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 Charter trailed after generating robust returns earlier in the recovery.”
2. Canadian Pacific Railway Limited (NYSE:CP)
Egerton Capital’s Stake Value: $1,870,961,000
Percentage of Egerton Capital’s 13F Portfolio: 8.89%
Number of Hedge Fund Holders: 38
Canadian Pacific Railway Limited (NYSE:CP) is primarily a freight railway company that owns over 20,000 kilometers of railway tracks in Canada and the United States. Egerton Capital, as of Q3 2021, boosted its position in Canadian Pacific Railway Limited (NYSE:CP) by 47%, holding 28.75 million shares worth $1.87 billion, representing 8.89% of the fund’s total Q3 portfolio.
Canadian Pacific Railway Limited (NYSE:CP) declared a C$0.19 per share quarterly dividend on October 19, payable on January 31, 2022 to shareholders of record on December 31.
Citi analyst Christian Wetherbee raised the price target on Canadian Pacific Railway Limited (NYSE:CP) on January 5 to $84 from $80 and kept a Buy rating on the shares. The analyst reduced Q4 estimates for the rails but generally expects results to be in line with consensus, since yields are supposed to be “quite good,” offsetting weaker than expected volumes. This could be a source of upside relative to estimates.
Billionaire Andreas Halvorsen’s Viking Global is one of the leading Canadian Pacific Railway Limited (NYSE:CP) stakeholders from Q3 2021, with a $224.3 million position in the company. Overall, 38 hedge funds were bullish on the stock in the third quarter.
Here is what ClearBridge Investments has to say about Canadian Pacific Railway Limited (NYSE:CP) in its Q1 2021 investor letter:
“We reoriented the portfolio for a more cyclical market in the fourth quarter and saw good performance in these areas from structural growth companies like Canadian Pacific Railway, which we repurchased during the quarter. Canadian Pacific pared gains after announcing the acquisition of Kansas City Southern that will create the first rail operator connecting the U.S., Mexico and Canada.”
1. Alphabet Inc. (NASDAQ:GOOG)
Egerton Capital’s Stake Value: $2,276,913,000
Percentage of Egerton Capital’s 13F Portfolio: 10.82%
Number of Hedge Fund Holders: 156
Egerton Capital owns 854,277 Alphabet Inc. (NASDAQ:GOOG) shares as of the third quarter of 2021, worth $2.27 billion, representing 10.82% of the fund’s 13F securities. Alphabet Inc. (NASDAQ:GOOG) is the largest holding in John Armitage’s Q3 portfolio.
Alphabet Inc. (NASDAQ:GOOG) announced on January 4 that given Google Cloud’s commitment to advancing invisible security and democratizing security operations for organizations, Alphabet Inc. (NASDAQ:GOOG) has acquired Siemplify, a leading security orchestration, automation, and response provider. Siemplify will join Google Cloud’s security team to help companies better manage their threat response.
Observing the company’s increasing focus on artificial intelligence and consequent product innovation, Tigress Financial analyst Ivan Feinseth on December 3 raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,540 from $3,185 and reiterated a Strong Buy rating on the shares.
156 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG) in the third quarter, holding stakes worth approximately $35 billion. Harris Associates is one of the leading Alphabet Inc. (NASDAQ:GOOG) stakeholders, with a $5 billion position in the company.
On October 26, Alphabet Inc. (NASDAQ:GOOG) announced its Q3 earnings, posting an EPS of $27.99, outperforming estimates by $4.75.
Here is what Saturna Capital Amana Funds has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter:
“Alphabet was a new addition to the Fund this year, as we believed it important to have exposure to the top online media and advertising company in the world. Some have raised concerns surrounding Alphabet’s exposure to political interference, but we take comfort from the belief that were the company to be broken up, it would quite likely be worth even more than as a single entity.”
You can also take a look at 10 Healthcare Stocks to Buy According to Tiger Cub Chase Coleman and 10 Key Quarterly Reports to Watch.
