In this article, we discuss the top 5 stock picks of Thomas Steyer’s Farallon Capital. If you want our detailed analysis of these stocks, go directly to Top 10 Stock Picks of Thomas Steyer’s Farallon Capital.
5. Thermo Fisher Scientific Inc. (NYSE:TMO)
Farallon Capital’s Stake Value: $559,709,000
Percentage of Farallon Capital’s 13F Portfolio: 2.83%
Number of Hedge Fund Holders: 94
Thermo Fisher Scientific Inc. (NYSE:TMO) is an American company working in the laboratory equipment, biotechnology, pharmaceutical, and healthcare industries, providing scientific instrumentation, reagents, consumables, and software services.
In the third quarter of 2021, Farallon Capital held 979,659 Thermo Fisher Scientific Inc. (NYSE:TMO) shares, worth $559.70 million, representing 2.83% of the hedge fund’s 13F securities for the period.
On February 2, Thermo Fisher Scientific Inc. (NYSE:TMO) reported earnings for the fourth quarter, posting an EPS of $6.54, beating estimates by $1.27. Revenue over the period totaled $10.70 billion, surpassing estimates by $1.45 billion.
Believing that post-pandemic expectations are too high, Wells Fargo analyst Dan Leonard lowered the price target on Thermo Fisher Scientific Inc. (NYSE:TMO) to $605 from $700 and kept an Equal Weight rating on the shares on February 3, after the Q4 results were published.
A total of 94 hedge funds were long Thermo Fisher Scientific Inc. (NYSE:TMO) in Q3 2021, up from 87 funds in the quarter earlier. Generation Investment Management is a prominent stakeholder of the company as of the close of the third quarter of 2021, holding 1.68 million shares worth $962.4 million.
Here is what L1 Capital has to say about Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q3 2021 investor letter:
“Included in these adjustments, in early July 2021, we divested our remaining small investment in Thermo Fisher Scientific (Thermo Fisher), the world leader in the provision of equipment, consumables, and services to the Life Sciences industry. Thermo Fisher has benefited from elevated demand for its products and services associated with COVID-19 and we sold our residual investment at a gain of more than 70% compared to our average investment cost. Thermo Fisher subsequently held an Investor Day and positively surprised many people, including us, with very strong medium-term growth targets, notwithstanding a headwind from normalization of COVID-19-related business. Thermo Fisher is a high-quality business and remains on our ‘Bench’ for potential reinvestment.”
4. T-Mobile US, Inc. (NASDAQ:TMUS)
Farallon Capital’s Stake Value: $587,570,000
Percentage of Farallon Capital’s 13F Portfolio: 2.97%
Number of Hedge Fund Holders: 89
Farallon Capital elevated its T-Mobile US, Inc. (NASDAQ:TMUS) stake in Q3 2021 by 34%, holding 4.5 million shares of the company, worth $587.5 million. T-Mobile US, Inc. (NASDAQ:TMUS) is a mobile communications company and a wireless network operator that is majority owned by the German telecommunications company, Deutsche Telekom.
Publishing its Q4 results on February 2, T-Mobile US, Inc. (NASDAQ:TMUS) posted earnings per share of $1.10, exceeding estimates by $1.01. Revenue for the fourth quarter totaled $20.79 billion, missing estimates by roughly $270 million.
On February 3, RBC Capital analyst Kutgun Maral lowered the price target on T-Mobile US, Inc. (NASDAQ:TMUS) to $152 from $180 and kept an Outperform rating on the shares. The company’s Q4 total revenue missed consensus on lower than expected equipment sales, but sentiment should be “near positive inflection soon”, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, 89 funds were bullish on T-Mobile US, Inc. (NASDAQ:TMUS) in the third quarter of 2021, down from 100 funds in the quarter earlier. Billionaire Andreas Halvorsen’s Viking Global is the largest T-Mobile US, Inc. (NASDAQ:TMUS) stakeholder, with 10.2 billion shares worth $1.30 billion.
Here is what ClearBridge Investments had to say about T-Mobile US, Inc. (NYSE:TMUS) in its Q1 2021 investor letter:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”
3. Aramark (NYSE:ARMK)
Farallon Capital’s Stake Value: $601,918,000
Percentage of Farallon Capital’s 13F Portfolio: 3.04%
Number of Hedge Fund Holders: 29
Headquartered in Pennsylvania, Aramark (NYSE:ARMK) is a supplier of food service, facilities, and uniforms across the United States, Canada, and 20 other countries. Farallon Capital’s stake in Aramark (NYSE:ARMK) increased by 51% in Q3 2021, and the hedge fund held 18.3 million shares of the company, worth roughly $602 million. The stock represents 3.04% of the fund’s total 13F securities.
Aramark (NYSE:ARMK) on February 2 declared a $0.11 per share quarterly dividend, in line with previous. The dividend is payable on March 2, for shareholders of record on February 16.
Stifel analyst Shlomo Rosenbaum said that he believes the groundwork has been laid for Aramark (NYSE:ARMK) to generate solid new business wins, accelerate organic revenue growth, and improve its margins and free cash flow. Rosenbaum has a Buy rating and a $48 price target on Aramark (NYSE:ARMK) shares as of December 10.
A total of 29 hedge funds were bullish on Aramark (NYSE:ARMK) in Q3 2021, down from 36 funds in the prior quarter. Soros Fund Management is one of the leading stakeholders of Aramark (NYSE:ARMK), with over 3 million shares worth $101 million.
2. Boston Scientific Corporation (NYSE:BSX)
Farallon Capital’s Stake Value: $607,572,000
Percentage of Farallon Capital’s 13F Portfolio: 3.07%
Number of Hedge Fund Holders: 47
Boston Scientific Corporation (NYSE:BSX) is a Massachusetts-based manufacturer of medical devices which are used for a wide range of interventional medical applications. Farallon Capital boosted its position in Boston Scientific Corporation (NYSE:BSX) by 11% in Q3 2021, owning over 14 million shares worth $607.5 million. The stock represents 3.07% of the fund’s 13F securities.
Boston Scientific Corporation (NYSE:BSX) posted its Q4 results on February 2, reporting earnings per share of $0.45, beating estimates by $0.01. Revenue over the period jumped 15.47% from the prior-year quarter, reaching $3.13 billion, exceeding estimates by $15.69 million.
Piper Sandler analyst Matt O’Brien on February 2 lowered the price target on Boston Scientific Corporation (NYSE:BSX) to $50 from $51 and reiterated an Overweight rating on the shares following the company’s Q4 results.
Among the hedge funds monitored by Insider Monkey in Q3 2021, 47 hedge funds were bullish on Boston Scientific Corporation (NYSE:BSX), with stakes totalling over $3.05 billion, as compared to 51 funds in the quarter earlier, holding stakes in Boston Scientific Corporation (NYSE:BSX) worth $3.02 billion. Two Sigma Advisors is a prominent stakeholder of the company, with over 8 million shares, valued at $350.65 million.
Here is what Artisan Partners has to say about Boston Scientific Corporation (NYSE:BSX) in its Q2 2021 investor letter:
“Among our top contributors (includes) Boston Scientific. Shares of Boston Scientific were volatile throughout most of 2020 as the pandemic drove significant drops in elective medical procedures, though our longer-term constructive view and belief elective medical procedures would bounce back post pandemic prompted us to add to our position. We have been rewarded with shares rebounding this year alongside a recovery in elective medical procedures. Longer-term, we believe the company’s investments in higher growth categories will drive revenue growth to the higher end of its peer group with rising margins.”
1. IQVIA Holdings Inc. (NYSE:IQV)
Farallon Capital’s Stake Value: $647,658,000
Percentage of Farallon Capital’s 13F Portfolio: 3.28%
Number of Hedge Fund Holders: 66
IQVIA Holdings Inc. (NYSE:IQV) is an American multinational company specializing in health information technology and clinical research, providing support services for pharmaceutical, biotech, and medical companies. Farallon Capital, as of Q3 2021, owns 2.70 million shares of IQVIA Holdings Inc. (NYSE:IQV), worth $647.65 million, representing 3.28% of the fund’s third quarter portfolio.
On January 6, UBS analyst John Sourbeer kept a Buy rating and a $310 price target on IQVIA Holdings Inc. (NYSE:IQV) as part of a broader research note on Life Sciences and Diagnostic Tools. The analyst sees upward bias to results driven by continued strong biotech demand and base recoveries for the group, adding that while macro pressures remain on the radar, these are reflected in guidance and consensus. He further stated that IQVIA Holdings Inc. (NYSE:IQV) is positioned well with both positive earnings revisions and multiple expansion.
Arrowstreet Capital is one of the leading IQVIA Holdings Inc. (NYSE:IQV) stakeholders as of Q3 2021, with 1.5 million shares worth $369.5 million. Overall, 66 hedge funds were bullish on IQVIA Holdings Inc. (NYSE:IQV) in the third quarter, with stakes totaling $3.75 billion.
Here is what Cooper Investors has to say about IQVIA Holdings Inc. (NYSE:IQV) in its Q4 2021 investor letter:
“During the quarter, IQVIA held an Investor Relations day. Today IQVIA is a leading provider of technology solutions and clinical research services to the life science industry. The portfolio first invested in the IQVIA predecessor IMS Health in late 2015. IMS Health was taken private by private equity in 2010 and re-listed in 2014. Current CEO Ari Bousbib, a former executive at United Technologies was appointed CEO at its privatization and has been the driving force ever since.
Under Ari’s watch IMS first transformed itself from a drug prescription data business to a broader pharmaceutical services provider and then in 2016 merged with Quintiles, the leading Contract Research Organisation (CRO), a business that runs drug trials for pharmaceutical and biotech companies. This merger created the IQVIA we know today. While this was a merger on the surface it was anything but as IMS effectively took control of Quintiles with no premium paid, another in the long line of savvy moves made by Ari and the team.
Along the journey IQVIA management have consistently increased growth rates and expanded the opportunity set for the company. This is a highly commercial team that has built or sought out great quality businesses in attractive and growing life science markets. IMS was an ex-growth business in 2010 and by the time of the Quintiles merger had accelerated to low-to-mid single digits. With the addition of Quintiles and improvement across all aspects of the business revenue growth has been averaging high-single-digits.
At the IR day management now talked to a double-digit revenue growth opportunity. Their markets are growing as fast as they have ever been as more capital flows into biotech and life sciences development. While we have owned the shares for over six years, the business outlook today is the strongest we’ve ever seen it and IQVIA remains a core position.”
You can also take a look at 10 Stocks to Sell According to Billionaire Daniel Sundheim and 10 Value Arbitrage Stocks Sabrepoint Capital is Buying.
