Below we’ll check out the Top 5 Stocks New Mets Owner Steve Cohen Was Buying in Q3. For more background on the billionaire investor and a look at some of his other major moves during Q3, check out Top 10 Stocks New Mets Owner Steve Cohen Was Buying in Q3.
- Eli Lilly & Co (NYSE:LLY)
Steve Cohen’s Point72 Asset Management added Eli Lilly & Co (NYSE:LLY) to its portfolio in Q3, buying nearly 1.32 million shares worth $195 million on September 30. Several other hedge funds have been bullish on Eli Lilly this year, driving a 19% quarter-over-quarter jump in hedge fund ownership of LLY as of June 30 among the funds tracked by Insider Monkey.
Amana Mutual Fund discussed Eli Lilly, its top performing stock during Q1, in the fund’s first quarter 2020 investor letter, praising the pharma giant’s revenue growth and balance sheet:
“Lilly stood out as one, among a handful, of companies that registered a positive return for the first quarter. In January, Lilly reported excellent fourth quarter results, with revenue growing at a faster clip than over the first three quarters of the year. Lilly is also financially strong with debt equivalent to only two times EBITDA and 12% of market capitalization. Johnson & Johnson, while trailing Lilly, shares many of the same characteristics and also outperformed.”
- Microsoft Corporation (NASDAQ:MSFT)
Steve Cohen took a much bigger stake in Microsoft Corporation (NASDAQ:MSFT) in the third quarter, buying nearly 639,000 shares to grow the size of its MSFT holding by 186%. 27% of the select group of high performing hedge funds tracked by Insider Monkey were long Microsoft on June 30, which was topped only by Amazon.com, Inc. (NASDAQ:AMZN).
Hedge funds like that Microsoft has been able to successfully diversify and better monetize its portfolio of products and services in recent years while pushing them onto the cloud. Microsoft’s top and bottom-line results were close to equally represented by its cloud, business, and consumer segments in 2019. Microsoft is also building an impressive security portfolio that is proving increasingly attractive to corporate CIOs and which could represent a $30 billion sales opportunity according to Barclay’s.
- Facebook Inc (NASDAQ:FB)
Steve Cohen added Facebook Inc (NASDAQ:FB) to Point72’s portfolio in Q2 and kept buying shares during Q3, growing the size of his stake by 757% quarter-over-quarter. Point72 now owns just under 840,000 FB shares valued at $220 million at the end of September. That position was still dwarfed by the Facebook ownership stakes amassed by several other hedge funds, including Tiger Global’s $2.3 billion position.
Wedgewood Partners, which posted gains of 10.77% in Q3, believes Facebook still trades at a reasonable multiple and notes that the pandemic has accelerated the use of its platform by struggling and shuttered small businesses, which should drive future revenue growth. The fund had this to say about FB in its Q3 2020 investor letter:
“Facebook’s revenues grew +12% constant currency despite the near total shutdown of economic activity during the month of April. The vast majority of Facebook’s revenues are derived from small businesses, many of which have borne the brunt of lockdowns. To combat the sudden disappearance of foot traffic, these businesses are initiating or accelerating the adoption of digital customer acquisition strategies provided by Facebook’s vast ecosystem, including instant access to over 2 billion daily users. We continue to carry Facebook as one of our largest holdings as its value proposition is difficult to copy, yet the stock trades at still somewhat reasonable multiples relative to large cap peers.”
- Palantir Technologies (NYSE:PLTR)
Steve Cohen was one of many hedge fund managers to buy shares of Palantir Technologies (NYSE:PLTR) after the company’s IPO in Q3, building a 29.90 million share position that is Point72’s 4th most valuable as of September 30. Palantir was also one of the Top 5 Stocks Billionaire George Soros Just Bought during Q3. PLTR shares have gained over 65% since their debut.
Given his own usage and understanding of data, it’s not surprising to see Cohen take a keen interest in the data analytics company, which was co-founded by Peter Thiel. Palantir primarily gathers and analyzes data for government agencies, including the Space Force, Navy, and Army, and could play a prominent role in the forthcoming Covid-19 vaccine rollout. In addition to its more than $1.5 billion in government contracts, an unnamed aerospace company also recently renewed its contract with Palantir for $300 million.
- Alphabet Inc. (NASDAQ:GOOGL)
Topping the list of Steve Cohen’s big buys of Q3 is the class A shares of Alphabet Inc. (NASDAQ:GOOGL). Cohen added close to 160,000 GOOGL shares to Point72’s 13F portfolio during the September quarter, pushing the value of his ownership stake in the search giant to nearly $299 million.
GOOGL shares have climbed by 25% since July 1 and Ensemble Capital is predicting further gains. In its Q3 2020 investor letter, the fund said GOOGL shares are still undervalued even after their 20% gains in July and August and that the core value of Alphabet’s most important assets like Search and YouTube hasn’t been impacted by the pandemic despite the first ever revenue decline in the company’s history during Q2.
Alphabet delivered much stronger results in Q3, growing search ad revenue by 9% to $37.1 billion, $5 billion of which were sold on YouTube, a 15% year-over-year increase. Face mask-related videos were among the topics driving engagement on the video platform, generating over 1 billion views. Google Cloud revenue hit $3.44 billion during the quarter, a rise of just over $1 billion year-over-year.
For more timely stock picks from the world’s greatest money managers, check out the Top 10 Stocks Billionaire Daniel Loeb Just Bought.
Disclosure: None.
