In this article, we take a look at the top 5 stock picks of Ryan Caldwell’s Chiron Investment. If you want to see our detailed analysis of these stocks and read about the performance of Chiron Investment Management over the years, you can go directly to the Top 10 Stock Picks of Ryan Caldwell’s Chiron Investment.
5. Philip Morris International Inc. (NYSE:PM)
Stake Value of Chiron Investment Management: $30,378,000
Percentage of Chiron Investment Management’s 13F Portfolio: 4.8%
Number of Hedge Fund Holders: 48
Philip Morris International Inc. (NYSE:PM) manufactures and sells cigarettes, various nicotine-containing products, smoke-free products, and related electronic devices and accessories. This October, it was reported by Philip Morris International Inc. (NYSE:PM) that despite the semi-conductor shortage that has resulted in low growth rates for IQOS device users throughout the third quarter of 2021, and is expected to persist during the first half of 2022, the company is still optimistic about achieving its 2021-2023 growth targets.
By the end of the third quarter of 2021, Insider Monkey was able to identify 48 hedge funds that held a stake in Philip Morris International Inc. (NYSE:PM). The total value of these stakes was $5.92 billion.
For the third quarter of 2021, Philip Morris International Inc. (NYSE:PM) generated revenues of up to $8.12 billion, up 9.08% year over year, beating estimates by $175.15 million. The company’s earnings per share for the quarter were reported at $1.58, beating EPS estimates by $0.02.
Broyhill Asset Management, an investment management firm, published its second-quarter 2021 investor letter in which they gave their take on whether or not to invest in Philip Morris International Inc. (NYSE:PM). Here’s what they said:
“Philip Morris (PM) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 23%. We shared our thoughts on these regulations during the quarter, which are available here.
‘PM Valuation. PM is up ~ 15% YTD and would have the most to gain under a nicotine cap. A cap would likely accelerate conversion to iQOS, which is 100% incremental for PM (PM also has zero exposure to combustible cigarettes in the U.S. and licenses its IQOS product for MO to distribute domestically). As such, the decline in PM was much more muted, with the stock hitting new 52 week highs a day after the Biden headline, driven by yesterday’s earnings release. It didn’t take long for investors to shift their attention back to fundamentals and the fundamentals here are best in class. In short, results beat estimates across the board (a recurring theme here), and management raised guidance for the full year (another recurring theme). IQOS continued to deliver impressive growth, recording continued market share gains on the heels of continued user acquisition growth, up 1.5M to 19.1M total users. Importantly, IQOS now represents nearly 30% of PM net revenues (management expects “smoke-free” products to represent more than half of their business by 2025, which should make the ESG folks happy), which is driving top-line growth and margin expansion. Hard to believe that they have created a product with higher margins than combustible cigarettes!! We expect PM operating margins to increase by 100bps – 200bps annually as IQOS continues to gain share. The stock trades at ~ 15x today or 2/3 of the market’s multiple for a business likely to generate $35B in cash flow – or 25% of the market cap – in just the next three years. Over the last decade, shares have traded at an average multiple of 18x and within a range of ~ 14x – 22x (+/-1 standard deviation). The stock yields 5.1% at the current price, and we expect management to resume share purchases in the back half of this year.’”
4. Constellation Brands, Inc. (NYSE:STZ)
Stake Value of Chiron Investment Management: $30,781,000
Percentage of Chiron Investment Management’s 13F Portfolio: 4.87%
Number of Hedge Fund Holders: 53
Constellation Brands, Inc. (NYSE:STZ) produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company was founded in 1945 and is headquartered in Victor, New York.
Insider Monkey was able to identify 53 hedge funds, out of 867, that had a stake in Constellation Brands, Inc. (NYSE:STZ) by the end of the third quarter of 2021. The value of these stakes was $1.71 billion, up from $1.60 billion in the prior quarter when 50 hedge funds held a stake in the company.
On October 13th, HSBC analyst Carlos Laboy upgraded Constellation Brands, Inc. (NYSE:STZ) to Buy from Hold and gave it a $262 price target.
3. LPL Financial Holdings Inc (NASDAQ:LPLA)
Stake Value of Chiron Investment Management: $31,063,000
Percentage of Chiron Investment Management’s 13F Portfolio: 4.91%
Number of Hedge Fund Holders: 37
LPL Financial Holdings Inc. (NASDAQ:LPLA) provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and business development companies.
This November, Citi analyst William Katz raised his price target on LPL Financial Holdings Inc. (NASDAQ:LPLA) to $240 from $233 and reiterated a Buy rating on the shares.
We were able to identify 37 hedge fund positions for LPL Financial Holdings Inc. (NASDAQ:LPLA) by the end of the third quarter of 2021.
Carillon Tower Advisers, an investment management firm, shared their stance on LPL Financial Holdings Inc. (NASDAQ:LPLA) in their “Carillon Eagle Mid Cap Growth Fund” third quarter 2021 investor letter. Here’s what they had to say:
“LPL Financial is an independent broker-dealer that offers technology, brokerage, and investment advisory services to financial professionals and financial institutions. The firm contributed to performance notably in the quarter due to a combination of accelerating net new asset growth, better than expected asset retention at newly acquired Waddell & Reed, and improved visibility on cash income. The move higher in Treasury yields also provided an additional boost for the firm’s shares at the end of the quarter.”
2. CVS Health Corporation (NYSE:CVS)
Stake Value of Chiron Investment Management: $32,077,000
Percentage of Chiron Investment Management’s 13F Portfolio: 5.07%
Number of Hedge Fund Holders: 61
CVS Health Corporation (NYSE:CVS) provides health services in the United States. The company operates through four segments, namely, Pharmacy Services, Retail/LTC, Health Care Benefits, and Corporate/Other.
This November, JPMorgan analyst Lisa Gill raised her price target on CVS Health Corporation (NYSE:CVS) to $115 from $107 and kept an Overweight rating on the shares, in light of “strong” third-quarter earnings.
For the third quarter of 2021, CVS Health Corporation (NYSE:CVS) registered an EPS of $1.97, beating estimates by $0.18. The company’s revenue for the quarter was $73.79 billion, up from $67.06 billion, which shows a year-over-year growth of 10.05%.
Insider Monkey’s research was able to spot CVS Health Corporation (NYSE:CVS) on 61 hedge fund portfolios by the end of the third quarter of 2021. The hedge funds’ stakes in the company were more than $1.06 billion.
ClearBridge Investments published its “Sustainability Leaders Strategy” second quarter 2021 investor letter, in which the firm mentioned CVS Health Corporation (NYSE:CVS). Here’s what the experts at ClearBridge had to say:
“Our differentiated positions in the health care sector also made strong contributions as the market began to reward the heavily discounted sector.CVS Health saw strength in its pharmacy benefits manager business as well as its managed care business, Aetna, helping to confirm our positive view of CVS’s repositioning of its business model from a dispensary model to a service model. With CVS store-based health care services offering patients better convenience, encouraging better health care compliance and ultimately lower costs, we believe the company is at the forefront of a changing mindset in the health care services sector.”
1. Netflix, Inc. (NASDAQ:NFLX)
Stake Value of Chiron Investment Management: $33,008,000
Percentage of Chiron Investment Management’s 13F Portfolio: 5.22%
Number of Hedge Fund Holders: 106
Netflix, Inc. (NASDAQ:NFLX) is an entertainment provider, serving worldwide. The company offers TV series, documentaries, and feature films across various genres and languages. This November, the company announced that it is planning on acquiring Scanline VFX, which is a company renowned for its “complex, photo-realistic effects and expertise in virtual production.” Netflix, Inc. (NASDAQ:NFLX) was founded in 1997 and is headquartered in California.
On November 15th, KeyBanc analyst Justin Patterson raised his price target on Netflix, Inc. (NASDAQ:NFLX) to $725 from $690 and reiterated an Overweight rating on the shares.
By the end of the third quarter of 2021, 106 hedge funds held stakes in Netflix, Inc. (NASDAQ:NFLX) worth $14.75 billion. This is compared to 113 positions in the second quarter, with stakes of $13.21 billion.
Ensemble Capital, an investment management firm, mentioned Netflix, Inc. (NASDAQ:NFLX) in its third-quarter 2021 investor letter. Here’s what they had to say:
“Netflix stock had a disappointing first half of 2021 performance, treading water while the S&P 500 rallied, after a very strong 67% return in 2020. It benefited from the global pandemic in 2020, signing on 36.6 million new subscribers vs the typical 25 million or so it typically does. Total subscribers exceeded 200 million, up 22% over the previous year. However, in the first half of 2021, new subscriber additions slowed substantially, totaling only 5.5 million due to slower new content additions impacted by production delays, a resumption of outdoor activity as people everywhere adjusted to living with COVID, and the impact of a “pull-forward effect” on subscriber growth in last year’s very strong results. The third quarter saw new content velocity start to pick up, which is usually what drives new subscribers to the service, with expectations of an even stronger content slate going into the final quarter of the year, causing the stock to increase 15% in the quarter.”
You can also take a look at Aquamarine Capital’s Top 10 Stock Picks and 15 Best Energy Stocks to Buy Now.
