This article discusses the Top 5 Stock Picks of Murray Stahl’s Horizon Asset Management at the end of June 2022. You can learn about Horizon Asset Management’s top 10 stock picks and the fund’s recent performance by reading Top 10 Stock Picks of Murray Stahl’s Horizon Asset Management.
05. Brookfield Asset Management Inc. (NYSE:BAM)
Horizon Asset Management’s Stake Value: $103.324 million
Number of Hedge Fund Holders as of Q1 2022: 35
Brookfield Asset Management Inc. (NYSE:BAM) was founded in 1997 and based in Toronto, Canada with additional offices across Northern America; South America; Europe; Middle East, and Asia. It is an alternative asset manager and REIT/Real Estate Investment Manager firm that focuses on real estate, renewable power, infrastructure and venture capital, and private equity assets.
On July 28, ahead of quarterly results, Credit Suisse analyst Andrew Kuske maintained an Outperform rating on Brookfield Asset Management Inc. (NYSE:BAM) shares while lowering his price target from $71.50 to $62.50. In general, the analyst thinks that Brookfield Asset Management Inc. (NYSE:BAM) core platform and business are still well-positioned for the long term and are gaining from quicker fund raising, deal deployment, and monetization. His current projections and valuation could increase if these efforts continue to succeed, the insurance industry continues to expand, and the repackaging of real estate proceeds more quickly than expected.
As per the latest quarter’s earnings results announced on August 11, the stock has missed the EPS estimate by $0.42 with an EPS GAAP Actual of $0.34 but has beaten the revenue target by $4.87 billion with an actual revenue figure of $24.29 billion. The company has a record $111 billion of cash and capital available for investment, it will be incredibly interesting to see how it deploys these funds. The company shares are reasonably valued at 17x distributable earnings and 2x book value. The stock has lost 5.19% in the past six months and 10.39% year to date.
04. Wheaton Precious Metals Corp. (NYSE:WPM)
Horizon Asset Management’s Stake Value: $123.016 million
Number of Hedge Fund Holders as of Q1 2022: 28
Wheaton Precious Metals Corp. (NYSE:WPM) was founded in 2004 and is headquartered in Vancouver, Canada. It is a streaming company, that primarily sells precious metals in Canada and internationally. The company sells gold, silver, palladium, and cobalt deposits.
As per the latest quarter’s earnings results announced on August 11, the company has achieved a revenue figure of $303 million versus the consensus estimate of $291.16 million. According to Randy Smallwood, president, and chief executive officer of Wheaton Precious Metals, “Throughout the first half of 2022, we have focused on optimising our portfolio and further increasing our financial flexibility to ensure that we are well positioned to respond to accretive growth opportunities and continue creating value for our shareholders.” The stock has a 1.78% forward dividend yield with a payout ratio of 23.49% and has lost 19.64% in the past six months and 18.50% year to date.
On August 12, Wheaton Precious Metals Corp. (NYSE:WPM) price target was decreased by Canaccord analyst Carey MacRury from C$70 to C$68 while maintaining a Buy recommendation for the stock.
03. CACI International Inc (NYSE:CACI)
Horizon Asset Management’s Stake Value: $131.493 million
Number of Hedge Fund Holders as of Q1 2022: 25
CACI International Inc (NYSE:CACI) was founded in 1962 and is headquartered in Reston, Virginia. The company, together with its subsidiaries, provides expertise and technology to enterprise and mission customers in support of national security missions and government modernization/transformation in the intelligence, defense, and federal civilian sectors.
According to the latest quarter’s earnings results announced on August 10, the stock has beaten the EPS estimate by $0.05 with an EPS GAAP Actual of $3.93 but has missed the revenue target by $13.71 million with an actual revenue figure of $1.64 billion. The stock does not currently pay a dividend and has gained 12.51% in the past six months and 2.92% year to date.
On August 11, Unity Software Inc. (NYSE:U) said that CACI International Inc (NYSE:CACI) had given it a three-year, multi-million dollar contract to further the development of smart human-machine interfaces by CACI International Inc (NYSE:CACI). According to Unity, this victory represents the single largest Digital Twin Solutions contract it has ever received. It is also a significant arrangement that solidifies Unity as the go-to real-time 3D platform for future systems design and simulation initiatives across the US Government.
02. Franco-Nevada Corporation (NYSE:FNV)
Horizon Asset Management’s Stake Value: $146.569 million
Number of Hedge Fund Holders as of Q1 2022: 29
The Franco-Nevada Corporation (NYSE:FNV) was founded in 1983 and is headquartered in Toronto, Canada. It operates as a gold-focused royalty and streaming company in Latin America, the United States, Canada, and internationally.
As per the latest quarter’s earnings results announced on August 10, the company produced record revenues of $352 million, an increase of 1.5% over the prior year. Higher realised oil and gas prices from its Energy holdings were the primary driver of the gain. The top line beat the estimates by $3.47 million. In the three months ending in June, precious metal assets accounted for 69.2% of revenues (gold, silver, and platinum group metals made up 54.1%, 10.2%, and 4.9%, respectively).
At the end of the second quarter of 2022, the company had $911 million in cash on hand, an increase from the $539 million recorded at the end of 2021. In the first half of 2022, it reported an operating cash flow of $488 million, up from $469 million in the corresponding period of the previous year. Since Franco-Nevada Corporation (NYSE:FNV) has no debt, it can use its free cash flow to grow its holdings and distribute dividends. Franco-Nevada Corporation (NYSE:FNV) currently has $1.9 billion in the capital on hand.
01. Texas Pacific Land Corporation (NYSE:TPL)
Horizon Asset Management’s Stake Value: $2,240.474 million
Number of Hedge Fund Holders as of Q1 2022: 19
Texas Pacific Land Corporation (NYSE:TPL) was founded in 1888 and is headquartered in Dallas, Texas. It engages in land and resource management, water services, and operations businesses. The company’s Land and Resource Management segment manages approximately 880,000 acres of land.
On August 3, Texas Pacific Land Corporation (NYSE:TPL) reported quarterly earnings of $15.37 per share, missing the EPS GAAP actual estimate by $0.08 per share. This contrasts with earnings per share of $7.36 in the prior year. Texas Pacific Land Corporation (NYSE:TPL) shares have added about 33.16% since the beginning of the year versus the S&P 500’s decline of 10.77%. The stock comprises 47% of Horizon Asset Management’s portfolio.
In its Q2 2022 investor letter, LRT Capital Management mentioned Texas Pacific Land Corporation (NYSE:TPL) and explained its insights for the company. Here is what the fund said:
“Long time readers will know that we rarely invest in commodity businesses. However, there are periods in the market where commodity-based businesses outperform the broad indexes by a wide margin. Therefore, to have balance in the portfolio, we have long searched for a competitively advantaged company in the commodity space. We believe that Texas Pacific Land Trust (NYSE:TPL), meets that criterion. Formed out of assets of formerly bankrupt railroads, TPL controls the largest acreage of land in the Permian basin – the center of the US shale oil industry.
The company has two main sources of income:
- royalties from oil & gas extracted on its properties – essentially a free call option on future oil prices and production; and
- a water business which develops water resources and sells services to the fracking industry.
We see TPL as an effective way to diversify the portfolio into a commodity exposed business that has a history of smart capital allocation and low risk of financial distress during periods of low oil prices. The company has no debt, and $281 million in cash. The company uses most of its cash flows to pay dividends and repurchase shares.”
You can also look at the 7 Best Stocks to Buy According to Stephen Feinberg’s Cerberus Capital Management and 10 Stocks You Should Sell in 2022 According to Billionaire Dan Loeb.
