In this article, we will discuss Top 5 Stock Picks of Michael Bilger’s 59 North Capital. For the full list and the investment strategy of 59 North Capital, head on Top 10 Stock Picks of Michael Bilger’s 59 North Capital.
5. WESCO International, Inc. (NYSE:WCC)
59 North Capital Stake: $31,721,000
Percentage of 59 North Capital’s Portfolio: 9.08%
Number of Hedge Fund Holders: 48
WESCO International, Inc. (NYSE:WCC) is a distributor of industrial products with three reporting segments: electrical and electronic solutions, communications and security solutions, and utilities and broadband solutions.
In the last quarter, Michael Bilger added to his investment in WESCO International, Inc. (NYSE:WCC) by 54%. WESCO International, Inc. (NYSE:WCC) is trading at an attractive valuation of a forward P/E of 7.20x as compared with the sector median of 14.47x, which is perhaps why the fund increased its position in the company.
WESCO International, Inc. (NYSE:WCC) had a strong Q2 2022, reporting revenue at $5.48 billion, up 19.1% YoY, beating the market consensus by $170 million. The company reported a normalized EPS of $4.19, beating the market consensus estimate by $0.26. The management attributed the company’s good performance to the success of WESCO’S value creation and a better new business model.
Here is what Diamond Hill Capital Management specifically said about WESCO International, Inc. (NYSE:WCC):
“A general selloff among industrials stocks tied to heightened expectations for a recession hit WESCO International, Inc. (NYSE:WCC) International particularly hard due to its somewhat elevated leverage. We maintain conviction in WESCO — a leading distributor of electrical, industrial and communications materials and provider of supply chain management and logistics services — as the largest player in a fragmented market. Its recent merger with a large competitor has given it still more bargaining power in an industry where scale is important, along with significant cost-cutting opportunities. Further, we believe the technical sophistication, customization and high cost of many of the products WESCO supplies, as well as the level of value-added services it provides, should allow the company to remain relatively insulated from e-commerce competition.”
As per Insider Money’s proprietary database, 48 hedge funds are bullish on WESCO International, Inc. (NYSE:WCC), as of the end of the second quarter. Leonard Green & Partners has the biggest stake in the company, with a total investment value of $610,470 at the end of the June quarter.
4. Zions Bancorporation (NASDAQ:ZION)
59 North Capital Stake: $34,848,000
Percentage of 59 North Capital’s Portfolio: 9.98%
Number of Hedge Fund Holders: 33
Based in Salt Lake City, Zions Bancorporation (NASDAQ:ZION) is a regional bank with operations across 11 states. The hedge fund raised its stake value in Zions Bancorporation (NASDAQ:ZION) by 95% during Q2 2022, taking the number of shares held to 684,646.
On September 14, Jennifer Demba, who is an analyst at Truist, increased his price target on Zions Bancorporation (NASDAQ:ZION). Since the U.S Fed is continuing to raise interest rates, the analyst believes that the stocks of banks will become more attractive. Hence he has maintained a Buy rating on the stock with a higher target price of $66 from the previous $60.
3. Brookdale Senior Living Inc. (NYSE:BKD)
59 North Capital Stake: $36,588,000
Percentage of 59 North Capital’s Portfolio: 10.48%
Number of Hedge Fund Holders: 20
Brookdale Senior Living Inc. (NYSE:BKD) operates senior living residences across the United States. The company provides facilities for independent living, assisted living, and skilled nursing. 59 North Capital increased its stake in Brookdale Senior Living Inc. (NYSE:BKD) by 29% during the previous quarter, and the total value of the fund’s stake in the company amounted to $36.5 million at the end of Q2 2022.
Brookdale Senior Living Inc. (NYSE:BKD) reported Q2 2022 revenue of $689.52 million, down 4.67% YoY. The normalized EPS of -$0.44 beat the market consensus estimate by $0.01. The management pointed out to the tough labor market for the slowdown in Q2 2022.
At the end of Q2 2022, 20 hedge funds in our database showed a liking for Brookdale Senior Living Inc. (NYSE:BKD) stock. The company’s leading stakeholder at the end of June quarter was Camber Capital Management, with a total holding of $16 million shares.
2. Deckers Outdoor Corporation (NYSE:DECK)
59 North Capital Stake: $36,712,000
Percentage of 59 North Capital’s Portfolio: 10.52%
Number of Hedge Fund Holders: 35
Deckers Outdoor Corporation (NYSE:DECK) produces and distributes footwear, clothes, and accessories for leisure and performance use. The primary brands of the company include UGG, Teva, and Sanuk. 59 North Capital decreased its investment in Deckers Outdoor Corporation (NYSE:DECK) by 42% during Q2 2022. The retail environment has been challenging as of late with decreasing consumer spending, which may have been a reason why Michael Bilger reduced his exposure to the retail sector.
Deckers Outdoor Corporation (NYSE:DECK) reported solid results for the Q1 2023 quarter, reporting revenue of $614.46 million, up 21.8% YoY, beating the market consensus by $46.14 million. The normalized EPS of $1.66 beat the market consensus estimate by $0.45. At the end of the quarter, the management approved the share repurchase of $1.2 billion as well.
Earlier this month, Tom Nikic upgraded his rating on Deckers Outdoor Corporation (NYSE:DECK) from Neutral to Outperform. The analyst remains extremely bullish on the prospects of the company’s ‘Hoka brand’, which he believes will continue to grow, resulting in strong future earnings for Deckers Outdoor Corporation (NYSE:DECK). He currently has a price target of $410 on the stock.
1. News Corporation (NASDAQ:NWS)
59 North Capital Stake: $45,251,000
Percentage of 59 North Capital’s Portfolio: 12.96%
Number of Hedge Fund Holders: 13
News Corporation (NASDAQ:NWS) is a media corporation with a presence in the United States, the United Kingdom, and Australia. Some of the prominent brands of the company include The Wall Street Journal, Herald Sun, and The Times. Michael Bilger continued to add to its position in News Corporation (NASDAQ:NWS) during Q2 2022. 59 North Capital now owns 2,904,459 shares of the company, which makes it the biggest holding of the hedge fund as of Q2 2022.
News Corporation (NASDAQ:NWS) had a strong Q4 2022 quarter, reporting revenue of $2.67 billion, up 7.30% YoY. The company reported a normalized EPS of $0.37, beating the market consensus estimate by $0.29. The company’s digital real estate service segment boomed, recording a growth of 25% to $1.7 billion.
As per Insider Monkey’s database, 13 hedge funds had a long position on the company’s stock at the end of Q2 2022. Yacktman Asset Management remained the leading stakeholder of the company, with a total investment value of $265 million in News Corporation (NASDAQ:NWS).
You can also take a look at These 5 Stocks are Plummeting After the Fed’s Latest Rate Hike and Ken Fisher’s Top 5 Growth Stock Picks.
