In this article, we discuss the top 5 stock picks of John Hempton’s Bronte Capital. If you want to read a detailed analysis of Hempton’s investment philosophy and current portfolio allocation strategies, go directly to Top 10 Stock Picks of John Hempton’s Bronte Capital.
5. Visa Inc. (NYSE:V)
Bronte Capital’s Stake Value: $58,265,000
Percentage of Bronte Capital’s 13F Portfolio: 6.67%
Number of Hedge Fund Holders: 166
Insider Monkey data shows that Bronte Capital owned 295,928 shares of Visa Inc. (NYSE:V) at the end of the second quarter of 2022, worth more than $58.27 million, representing 6.67% of the portfolio. TCI Fund Management is Visa Inc. (NYSE:V)’s most significant stakeholder. In Q2 2022, 166 hedge funds owned positions worth $24.08 billion in Visa Inc. (NYSE:V), compared to 159 funds with stakes valued at nearly $28.08 billion a quarter earlier.
Visa Inc. (NYSE:V) announced on September 10 that it would provide a new merchant category code for American gun merchants to help customers identify purchases made at gun shops.
On August 16, Daiwa analyst Kazuya Nishimura downgraded Visa Inc. (NYSE:V) from ‘Outperform’ to ‘Neutral’ and trimmed his price objective from $230 to $225. The analyst anticipated that there would be less prospects for profitability to exceed market expectations despite the practically complete elimination of border barriers.
Here is what Baron Funds has to say about Visa Inc. (NYSE:V) in its Q2 2022 investor letter:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Visa, Inc. (NYSE:V). These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
4. Herbalife Nutrition Ltd. (NYSE:HLF)
Bronte Capital’s Stake Value: $61,282,000
Percentage of Bronte Capital’s 13F Portfolio: 7.02%
Number of Hedge Fund Holders: 28
Herbalife Nutrition Ltd. (NYSE:HLF) provides nutrition solutions across South and Central America, North America, Mexico, Europe, China, the Middle East, Africa, and the rest of the Asia Pacific. Following the release of the Q2 results, Riley analyst Jeff Van Sinderen reduced his price objective on Herbalife Nutrition to $38 from $41 and reiterated a ‘Buy’ recommendation on the stock on August 3. The analyst lowered projections to account for currency fluctuations and a slow sales rebound.
Regulatory filings revealed that Bronte Capital owned 3 million shares of Herbalife Nutrition Ltd. (NYSE:HLF) at the end of the second quarter of 2022, valued at $61.28 million, representing 7.02% of the portfolio. Herbalife Nutrition Ltd. (NYSE:HLF) has been in Bronte Capital’s portfolio since the fourth quarter of 2018.
At the end of June, a total of 28 hedge funds tracked by Insider Monkey held long positions in Herbalife Nutrition Ltd. (NYSE:HLF). By comparison, 34 hedge funds held shares in Herbalife Nutrition Ltd. (NYSE:HLF) a quarter ago.
In its Q3 2021 investor letter, Bronte Capital mentioned Herbalife Nutrition Ltd. (NYSE:HLF). Here is what the fund said:
“Herbalife is – as we have discussed many times before – a multi-level marketing scheme selling weight-loss shakes. The idea is simple. If I replaced six meals a week with low-calorie protein shakes and I walked an extra 15km a week I would quickly lose 15-20kgs. It would be good for me. It is also well-nigh impossible to do…..(Click to read the full text).”
3. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Bronte Capital’s Stake Value: $88,190,000
Percentage of Bronte Capital’s 13F Portfolio: 10.1%
Number of Hedge Fund Holders: 44
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) researches, develops, produces, and sells medications for the treatment of several illnesses around the world. On September 12, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) released preliminary data for the treatments, ubamatamab and REGN5093, for advanced non-small cell lung cancer with MET mutations.
Bronte Capital has owned a stake in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) since the fourth quarter of 2020. The hedge fund increased its stake in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) by 8% in the second quarter of 2022. The fund held 149,189 shares worth $88.19 million as of June 30, making Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) the third-largest stock in its 13F portfolio.
Following the latest success in the Phase III PULSAR and PHOTON trials employing a higher dosage, 8mg formulation of aflibercept, Guggenheim analyst Yatin Suneja increased his price objective on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) to $925 from $740 and reaffirmed a ‘Buy’ rating on September 12.
According to Insider Monkey’s database, 44 hedge funds had a stake in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) as of Q2 2022. The total value of their holdings was $1.60 billion. Jim Simons’ Renaissance Technologies is the leading shareholder of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), with a stake worth over $344.67 million.
2. Berkshire Hathaway Inc. (NYSE:BRK-A)
Bronte Capital’s Stake Value: $116,496,000
Percentage of Bronte Capital’s 13F Portfolio: 13.35%
Number of Hedge Fund Holders: 109
Berkshire Hathaway Inc. (NYSE:BRK-A)’s specializes in the utilities, energy, freight rail transportation, banking, manufacturing, and retail businesses. In addition, the firm offers property and liability insurance, as well as reinsurance. John Hempton’s Bronte Capital owned 426,694 Berkshire Hathaway Inc. (NYSE:BRK-A) shares in the second quarter of 2022 after purchasing an additional 365,649 shares.
On August 7, Keefe Bruyette analyst Meyer Shields boosted his price objective on Berkshire Hathaway Inc. (NYSE:BRK-A) to $535,000 from $480,000 and maintained a ‘Market Perform’ rating on the stock. In a research note, Shields explained to investors why the company’s Q2 operating earnings were remarkably beyond those expected by the Street, a lower than expected tax rate and higher than expected results from the insurance, railroads, utilities, and energy sectors.
Among the hedge funds tracked by Insider Monkey, 109 were bullish on Berkshire Hathaway Inc. (NYSE:BRK-A) at the end of June 2022, compared to 104 funds in the preceding quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust is a prominent shareholder of Berkshire Hathaway Inc. (NYSE:BRK-A) as of Q2 2022, with 34.69 million shares worth $9.47 billion.
In its Q1 2022 investor letter, Diamond Hill Capital mentioned Berkshire Hathaway Inc. (NYSE:BRK-A) and explained its insights for the company. Here is what the fund said:
“Diversified holding company Berkshire Hathaway reported strong earnings during the quarter and benefited from continued share repurchases below intrinsic value. The company also announced significant deployments of excess cash during the quarter, including the acquisition of Alleghany and a large increase in its stake in Occidental Petroleum.”
1. Alphabet Inc. (NASDAQ:GOOG)
Bronte Capital’s Stake Value: $120,058,000
Percentage of Bronte Capital’s 13F Portfolio: 13.76%
Number of Hedge Fund Holders: 153
Following interruptions in China caused by COVID-19 lockdowns and Beijing’s escalating tensions with the United States, the tech giant Alphabet Inc. (NASDAQ:GOOG) is considering shifting part of the manufacture of Pixel phones to India. Chris Hohn’s TCI Fund Management is the leading stakeholder of Alphabet Inc. (NASDAQ:GOOG-A), with 2.48 million shares worth $5.42 billion.
Ivan Feinseth, an analyst at Tigress Financial, increased his price target on Alphabet Inc. (NASDAQ:GOOG) to $186 from $183 on August 3 and maintained a ‘Strong Buy’ recommendation on the stock, citing the company’s Q2 results as evidence of the strength of its core businesses in Cloud and Search.
John Hempton’s Bronte Capital boosted its stake in Alphabet Inc. (NASDAQ:GOOG) by 3% in Q2 2022, holding about 55,091 shares worth $120.06 million, representing 13.76% of the total securities.
Overall, 153 hedge funds in the database of Insider Monkey owned positions in Alphabet Inc. (NASDAQ:GOOG) at the end of June, with a collective stake value of $22.30 billion. This was a decrease of 7 hedge funds from the previous quarter when 160 hedge funds owned stakes in Alphabet Inc. (NASDAQ:GOOG).
Here is what Baron Funds has to say about Alphabet Inc. (NASDAQ:GOOG-A) in its Q2 2022 investor letter:
“Alphabet Inc. is the parent company of Google, the world’s largest search and online advertising company. Shares of Alphabet declined 21.6% in the quarter due to concerns about slower global growth impacting the company’s core advertising business. We retain conviction in Alphabet’s merits as it continues to benefit from growth in mobile and online video advertising, which accrues to its core assets of search, YouTube, and the Google ad network. We are further encouraged by Alphabet’s investments in Cloud, AI, and Autonomous Driving (through its Waymo subsidiary).”
You can also take a peek at Top 10 Stock Picks of Glenn Greenberg’s Brave Warrior Capital and Top 10 Stock Picks of Cinctive Capital Management.
