In this article, we discuss the top 5 stock picks of Scott Ferguson’s Sachem Head Capital. If you want to read our detailed analysis of these stocks, go directly to Top 10 Picks of Scott Ferguson’s Sachem Head Capital.
5. Meta Platforms, Inc. (NASDAQ:FB)
Value of Sachem Head Capital’s Stake: $208.6 million
Percentage of Sachem Head Capital’s 13F Portfolio: 5.4%
No. of Hedge Fund Holders: 266
Meta Platforms, Inc. (NASDAQ:FB) is a technology company. It allows users to communicate and exchange information using mobile devices and PCs. The company’s main products are Facebook, Instagram, Messenger, WhatsApp, and Facebook Reality Labs.
Sachem Head Capital allocated 5.4% of its 13F portfolio to Meta Platforms, Inc. (NASDAQ:FB), based on the Q2 filings of the fund.
Polen Capital mentioned Meta Platforms, Inc. (NASDAQ:FB) in its Q3 2021 investor letter. Here is what the fund said:
“Facebook’s stock was pressured on concerns about regulation in the quarter. We are constantly monitoring the potential regulatory risks to Facebook (and all of our holdings). At this point, we see very little chance that regulation changes Facebook’s business model in a meaningful and adverse way. Regarding the recent data shared by a former Facebook employee and the company itself on some of the unfortunate negative consequences of social media, we recognize these types of issues will inevitably linger in different forms and fashions well into the future. We have been focused on the ability of
Facebook to identify and mitigate these negative consequences while amplifying the value users typically cite for its apps across a long list of use cases. We continuously monitor the vibrance of the user base on Facebook’s apps to confirm that value.”
4. US Foods Holding Corp. (NYSE:USFD)
Value of Sachem Head Capital’s Stake: $215.8 million
Percentage of Sachem Head Capital’s 13F Portfolio: 5.58%
No. of Hedge Fund Holders: 35
US Foods Holding Corp. (NYSE:USFD) is a food distributor. By the end of the second quarter of 2021, 35 hedge funds out of the 873 tracked by Insider Monkey held stakes in US Foods Holding Corp. (NYSE:USFD), worth roughly $1.4 billion. Our data shows that Leonard Green & Partners is the leading shareholder in the company, with 7 million shares worth $268.5 million.
According to the third fiscal quarter results, US Foods Holding Corp. (NYSE:USFD) reported an EPS of $3.22, beating estimates by $0.05. The company’s revenue came in at $29.01 billion, up 21% year-over-year.
3. Olin Corporation (NYSE:OLN)
Value of Sachem Head Capital’s Stake: $691.6 million
Percentage of Sachem Head Capital’s 13F Portfolio: 17.91%
No. of Hedge Fund Holders: 37
Olin Corporation (NYSE:OLN) is a chemical and ammunition maker and distributor. Chlor Alkali Products & Vinyls, Epoxy, and Winchester are the three segments in which the company operates.
Sachem Head Capital Stake owns approximately 15 million shares worth $691.6 million in Olin Corporation (NYSE:OLN), accounting for 17.91% of its total holdings.
At the end of the second quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in the firm.
Analysts are bullish on Olin Corporation’s (NYSE:OLN) long-term prospects, with investment advisories like Piper Sandler, JPMorgan, Wells Fargo, KeyBanc, and Citi raising their price targets on the stock in October.
2. Elanco Animal Health Incorporated (NYSE:ELAN)
Value of Sachem Head Capital’s Stake: $965.6 million
Percentage of Sachem Head Capital’s 13F Portfolio: 25%
No. of Hedge Fund Holders: 42
Elanco Animal Health Incorporated (NYSE:ELAN) is a pharmaceutical firm that manufactures medicines and vaccines for pets and livestock. Our data shows that Sachem Head Capital is the biggest shareholder of the company with more than 27 million shares worth $965.6 million.
On October 28, investment advisory Stifel downgraded Elanco Animal Health Incorporated (NYSE:ELAN) stock to Hold from Buy and decreased its price target to $34 from $37, stating that the global livestock market is still in a difficult situation.
1. International Flavors & Fragrances Inc. (NYSE:IFF)
Value of Sachem Head Capital’s Stake: $972.5 million
Percentage of Sachem Head Capital’s 13F Portfolio: 25.18%
No. of Hedge Fund Holders: 52
International Flavors & Fragrances Inc. (NYSE:IFF) manufactures and sells flavors, fragrances, and cosmetics worldwide. In October, Christopher Parkinson of Mizuho initiated coverage of International Flavors & Fragrances Inc. (NYSE:IFF) stock with a Neutral rating and $54 price target.
As of the end of the second quarter, 52 hedge funds tracked by Insider Monkey owned stakes in International Flavors & Fragrances Inc. (NYSE:IFF). The total value of these stakes is $3.3 billion. This is compared to 55 hedge funds in the previous quarter with stakes worth $3.6 billion.
Rhizome Partners mentioned International Flavors & Fragrances Inc. (NYSE:IFF) in its Q1 2021 investor letter. Here is what the fund said:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
See also 10 Best Stocks Under $10 to Buy Right Now and 10 Best Dividend Paying Stocks to Buy Under $50.
