In this article, we present the list of top 5 stocks to buy according to billionaire investor Chris Rokos. If you want to read our comprehensive analysis of Rokos Capital Management’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stocks to Buy According to Billionaire Investor Chris Rokos.
5. Bristol-Myers Squibb Company (NYSE:BMY)
Value of Rokos Capital’s 13F Position: $31.72 million
Number of Hedge Fund Shareholders: 67
Hedge fund ownership of Bristol-Myers Squibb Company (NYSE:BMY) has plummeted over the past year, falling by 59%. Chris Rokos’ was one of the exceptions to that trend, taking a 504,627-share stake in the pharmaceutical giant during Q4.
Bristol-Myers Squibb Company (NYSE:BMY) delivered 8% sales growth in Q4 on top of double-digit non-GAAP EPS gains, highlighted by the strong performance of blood clot medication Eliquis, sales of which climbed 20% year-over-year, and cancer treatment Opdivo, which was launched for new indications during the year and sales of which climbed 11%..
Bristol-Myers Squibb Company (NYSE:BMY) expects to launch three first-in-class medications in 2022, Mavacamten, deucravacitinib, and relatlimab, each of which the company believes could hit $4 billion in sales by 2029. The company is also in a very strong financial position, with $17 billion in cash and marketable securities at the end of 2021.
4. Denbury Inc. (NYSE:DEN)
Value of Rokos Capital’s 13F Position: $45.14 million
Number of Hedge Fund Shareholders: 32
Hedge fund ownership of Denbury Inc. (NYSE:DEN) has shot up by 220% over the last five quarters and Chris Rokos was one of the fund managers adding DEN to his portfolio, buying 592,565 shares in Q4.
Denbury Inc. (NYSE:DEN) averaged 48,900 barrels of oil equivalent per day in volume during the fourth quarter, a slight decrease quarter-over-quarter due to unexpected downtime in December at some of its fields. The company also expects sales volumes to be down slightly in 2022. Nonetheless, the company expects to generate up to $500 million in free cash flow during the year based on a $70 oil price.
Denbury Inc. (NYSE:DEN) reduced its debt by $100 million in 2021 and will use its growing financial liquidity to invest in its growth initiatives, with plans to reach 1.2 billion tons of storage capability by the end of 2022 by building storage facilities at key points across its pipelines.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Value of Rokos Capital’s 13F Position: $47.73 million
Number of Hedge Fund Shareholders: 281
Rokos has been an Amazon.com, Inc. (NASDAQ:AMZN) shareholder since Q4 2020, but decided to make a much bigger splash in the stock a year later, hiking his position by 1,081% to 14,221 shares. Amazon is one of the most popular stocks among hedge funds, with a record 281 funds long AMZN shares on December 31.
Amazon.com, Inc. (NASDAQ:AMZN) shares have hit a rare flat period, being down by 4% since the summer of 2020. That could make it the perfect time to buy the stock, as the company’s own management feels, having bought back shares earlier this year for the first time in a decade. Investors are concerned about Amazon’s slowing sales growth, which was just 9% in Q4, especially as the pandemic continues to fade. The company’s free cash flow was also $15 billion in the red in 2021 as a result of a hefty $61 billion in capital expenditures.
There’s plenty of potential upside coming out of this pandemic period for Amazon, however. Third Point Management believes Amazon.com, Inc. (NASDAQ:AMZN) is at an important inflection point that is likely to improve several of the company’s key metrics and likewise boost its share price. The fund discussed its views on the stock in its Q4 2021 investor letter:
“We have long admired Amazon as investors (and appreciated its myriad benefits as consumers) and have owned shares several times in the past. We acquired a sizable position during the early innings of the pandemic ahead of what we believed would be a structural acceleration in revenue for the group. After lagging tech peers for most of last year, we significantly increased the size of our investment, reflecting our conviction that Amazon is at an important crossroads as new management considers its long-term strategic plan to move the company forward, which may include several bold initiatives that are the subject of wide market speculation at the proverbial investor water cooler.
Amazon’s most recent quarterly results bolstered our view that the company is now at an inflection point that should usher in an improvement in various metrics, as well as an upturn in the company’s share price. The long-term secular growth drivers for the company—cloud adoption and eCommerce penetration—remain firmly intact. Sales growth ought to reaccelerate as revenue comps ease. Fixed cost leverage should improve after a large investment cycle that effectively doubled the fulfillment capacity of the company over the past two years. Excess costs associated with the Covid pandemic, labor shortages, and supply chain disruption should start to disappear as the external environment normalizes. And, shares are still trading at the lower end of the company’s historical multiple range. It’s not often that you get to buy shares in a high-quality company at the low end of its valuation range ahead of a meaningful reacceleration in growth at a 30%-40% discount to its present intrinsic value with an almost unlimited runway of potential to compound in value.
While the fundamental outlook for shares looks bright, we were encouraged by two additional developments this quarter. First, we noted the Board repurchased shares in January 2022 for the first time in a decade. It is not hard to imagine that Amazon, like some of its peers, may start returning more capital to shareholders, especially as the balance sheet approaches a net cash position and free cash flow improves. Second, we noted the introduction of additional disclosure from management, specifically breaking out advertising revenue and detailing capital expenditures by category. Amazon is a large and complex company and greater financial disclosure will no doubt help investors better understand the various parts of the business and significant sum-of-the-parts value. We expect these shareholder-friendly moves may be just the tip of the iceberg as Amazon’s talented and focused new CEO Andy Jassy sets out his plan for the Company’s future.”
2. PG&E Corporation (NYSE:PCG)
Value of Rokos Capital’s 13F Position: $48.43 million
Number of Hedge Fund Shareholders: 65
Rokos Capital Management slashed its PG&E Corporation (NYSE:PCG) holding by 21% during the fourth quarter, leaving it with even 4 million shares. Despite the selling, the company still represents Rokos’ second-largest long equity position as of December 31.
PG&E Corporation (NYSE:PCG) has fallen out of favor with hedge funds over the last year and a half, with ownership of the company sliding by 31% during that time. Billionaire money managers George Soros and Seth Klarman both sold off their stakes in PCG during the fourth quarter, while Steve Cohen and David Abrams unloaded their positions a quarter earlier.
PG&E Corporation (NYSE:PCG) issued GAAP earnings guidance of between $0.89 and $1.23 per share for 2022, which includes non-core items of up to $380 million owing to the expected costs related to wildfire damages triggered by its power lines and pending lawsuits. PG&E has taken major steps in recent years to improve its safety procedures, including expanding its usage of underground power lines.
1. salesforce.com, inc. (NYSE:CRM)
Value of Rokos Capital’s 13F Position: $60.21 million
Number of Hedge Fund Shareholders: 113
Topping the list of stocks to buy now according to billionaire investor Chris Rokos is salesforce.com, inc. (NYSE:CRM), which became the fund’s top long equity position in Q4 one quarter after Rokos first took a large stake in the company. Hedge fund ownership of CRM rose by 13% in 2021.
salesforce.com, inc. (NYSE:CRM) has a dominant position in the customer relationship management industry, capturing more market share (23.9%) in the first half of 2021 than its four largest competitors combined. Salesforce has been the industry leader for eight years running and expects to double revenue over the next four years to $50 billion. There are signs of strong and growing demand for its services among the company’s partners over the next two years, which should eventually push shares well above current levels.
Polen Capital’s Polen Focus Growth downplayed some of the fears surrounding salesforce.com, inc. (NYSE:CRM)’s MuleSoft weakness and the company’s guidance in its Q4 2021 investor letter:
“Salesforce reported solid revenue growth, including accelerated growth in the company’s largest and most mature product, Sales Cloud. However, shares underperformed due to unexpected weakness in the company’s MuleSoft application integration business that we believe is attributable to temporary missteps in the company’s selling efforts. The company also provided slightly weak guidance for billed but not earned business growth. In our experience, this metric can be influenced by timing issues and is often not fully representative of underlying demand for the company’s offerings.”
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out 10 Best Small Cap Stocks To Buy for 2022 and 10 EV Charging Stocks to Buy Now.
