In this article, we will discuss the top 5 stocks to buy according to Patrick Degorce’s Theleme Partners. If you want to read our detailed analysis of Degorce’s history, investment philosophy, and hedge fund performance, go directly to the Top 9 Stocks to Buy According to Patrick Degorce’s Theleme Partners.
5. Micron Technology, Inc. (NASDAQ:MU)
Degorce’s Stake Value: $171,830,000
Percentage of Patrick Degorce’s 13F Portfolio: 5.01%
Number of Hedge Fund Holders: 87
Micron Technology, Inc. (NASDAQ:MU) is ranked fifth on the list of top 9 stocks to buy according to Patrick Degorce’s Theleme Partners. It supplies memory and storage technologies such as DRAM, NOR, NAND, and 3D XPoint memory under the Micron and Crucial brands and private labels.
On September 29, Wedbush analyst Matt Bryson lowered his price target on Micron Technology, Inc. (NASDAQ:MU) to $85 from $105 and kept a “Neutral” rating on the shares after quarterly results. The analyst observes that while the statistics were somewhat better than expected, the guidance was much below consensus.
Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the most significant stakeholder of Micron Technology, Inc. (NASDAQ:MU), with 14.86 million shares worth $1.26 billion.
In its fourth-quarter 2020 investor letter, Bonsai Partners mentioned Micron Technology, Inc. (NASDAQ:MU). Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron’s stock appreciated 60.1% during the quarter.
Micron’s shares significantly appreciated this quarter for a couple of reasons. First, and most importantly, the DRAM market appears to have begun its cyclical rebound. As a result, we will likely see higher pricing and profitability through at least the calendar year 2021, hopefully meaningfully longer.
Another (and less meaningful) driver wasthat semiconductor stocks have become ‘en vogue’ once again. I may not be old, but I’ve been around the sector long enough to know that when generalists start getting excited about a ‘new paradigm’ around semiconductors, it’s time to be wary.
I wouldn’t call Micron overvalued, but I’d certainly say it’s more fairly priced today compared to when we first purchased it a few months ago.”
4. Analog Devices, Inc. (NASDAQ:ADI)
Degorce’s Stake Value: $197,640,000
Percentage of Patrick Degorce’s 13F Portfolio: 5.77%
Number of Hedge Fund Holders: 62
Analog Devices, Inc. (NASDAQ:ADI) is placed fourth on the list of top 9 stocks to buy according to Patrick Degorce’s Theleme Partners. The firm provides data converters that transform analogue signals into digital data and digital data into analogue signals. In the second quarter of 2021, Patrick Degorce’s Theleme Partners held 1.15 million shares of Analog Devices, Inc. (NASDAQ:ADI), amounting to $197.64 million in worth representing 5.77% of the fund’s portfolio.
On September 20, JPMorgan analyst Harlan Sur upgraded Analog Devices, Inc. (NASDAQ:ADI) to “Overweight” from “Neutral,” raising his price target to $215 from $119. In August, China’s State Administration for Market Regulation gave antitrust clearance to the previously announced acquisition of Maxim Integrated Products Inc. (NASDAQ:MXIM) by Analog Devices, Inc. (NASDAQ:ADI).
Analog Devices, Inc. (NASDAQ:ADI) is getting the attention of the smart money, as 62 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the second quarter, up from 50 funds a quarter earlier.
In its fourth-quarter 2020 investor letter, Weitz Investment Management mentioned Analog Devices, Inc. (NASDAQ:ADI). Here is what the fund said:
”Analog Devices benefited from several global, long-wave trends such as automation, electric vehicles and the 5G network build-out. The company’s quarterly sales into the auto, industrial and communications sectors exceeded expectations, giving the stock a lift.”
3. T-Mobile US, Inc. (NASDAQ:TMUS)
Degorce’s Stake Value: $315,186,000
Percentage of Patrick Degorce’s 13F Portfolio: 9.2%
Number of Hedge Fund Holders: 100
T-Mobile US, Inc. (NASDAQ:TMUS) stands third on the list of top 9 stocks to buy according to Patrick Degorce’s Theleme Partners. The company and its subsidiaries provide 102.1 million consumers with the phone, message, and internet services in the postpaid, prepaid, and wholesale markets. In the second quarter of 2021, Theleme Partners owned 2.18 million shares in T-Mobile US, Inc. (NASDAQ:TMUS), worth $315.19 million. This represented 9.2% of the investment portfolio of Theleme Partners.
On September 13, T-Mobile US, Inc. (NASDAQ:TMUS) dramatically increased its retail footprint thanks to a deal with Walmart Inc. (NYSE:WMT), which will see the carrier appear in 2,300 locations and on Walmart.com. In addition, T-Mobile and Metro by T-Mobile have reached an agreement that will more than quadruple the carrier’s presence at big national stores. In the second quarter of 2021, T-Mobile US, Inc. (NASDAQ:TMUS) posted EPS of $0.94, beating the estimates by $0.44. The company reported revenue of $19.95 billion, up 12.90% year-over-year. Postpaid phone net additions were 627 thousand, up 2.5 times from the previous year.
At the end of the second quarter of 2021, 100 hedge funds in the database of Insider Monkey held stakes worth $8.02 billion in T-Mobile US, Inc. (NASDAQ:TMUS), up from 98 the preceding quarter worth $9.06 billion.
ClearBridge Investments, an investment management firm, recently released its first-quarter 2021 investor letter and mentioned T-Mobile US, Inc. (NASDAQ:TMUS) in it. Here is what the firm has to say:
“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.”
2. Wells Fargo & Company (NYSE:WFC)
Degorce’s Stake Value: $911,590,000
Percentage of Patrick Degorce’s 13F Portfolio: 26.61%
Number of Hedge Fund Holders: 94
13F filings reveal that Theleme Partners owned 20.13 million shares in the company at the end of the second quarter of 2021, worth $911.59 million, representing 26.61% of the portfolio.
On September 28, Morgan Stanley analyst Betsy Graseck downgraded Wells Fargo & Company (NYSE:WFC) to “Equal Weight” from “Overweight” and reduced her price target to $46 from $49.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management is a leading shareholder in Wells Fargo & Company (NYSE:WFC) with 34.91 million shares worth more than $1.58 billion.
L1 Capital mentioned Wells Fargo & Company (NYSE:WFC) in its second-quarter 2021 investor letter. Here is what the firm has to say:
“Wells Fargo (Long +16%) was the strongest contributor to portfolio performance over the quarter. Wells Fargo shares rallied given a better outlook for bad debts driven by improving employment and house price trends. The company had been very undervalued due to excessive fears around likely bad debts due to the pandemic, the continued regulatory “asset cap” (a punishment that was put in place in 2017 for numerous compliance failures) and an inability to commence buybacks. The share price has subsequently recovered strongly in recent months as the company has progressed its turnaround program under the leadership of the well-regarded CEO, Charles Scharf (former CEO of Visa and BNY Mellon). Wells Fargo is now closer to getting the asset cap lifted and has announced a huge cost out program (US$8b+) as well as an $18b buyback program to be completed over the next 12 months. Wells Fargo shares have rallied more than 50% since we initiated the position in late 2020. Given the strong rally, we elected to exit our position and rotate into stocks with larger valuation upside.”
1. Moderna, Inc. (NASDAQ:MRNA)
Degorce’s Stake Value: $1,426,811,000
Percentage of Patrick Degorce’s 13F Portfolio: 41.65%
Number of Hedge Fund Holders: 37
Moderna, Inc. (NASDAQ:MRNA) is placed first on the list of top 9 stocks to buy according to Patrick Degorce’s Theleme Partners.
On October 7, Moderna (NASDAQ:MRNA) announced its plans to build a cutting-edge mRNA plant in Africa to manufacture up to 500 million vaccine doses at a 50g dosage level per year. The company intends to invest up to $500 million in this new plant. In August, Oppenheimer analyst Hartaj Singh downgraded Moderna, Inc. (NASDAQ:MRNA) to “Perform” from “Outperform.” According to Singh, Moderna’s non-Covid pipeline is still 2-3 years away from commercialization, and Covid vaccines will face financial pressure as soon as 2023.
In its second-quarter 2021 investor letter, Carillon Tower Advisers, an investment management firm, mentioned Moderna, Inc. (NASDAQ:MRNA). Here is what the fund said:
“Moderna is a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines. The stock outperformed in the quarter, as the firm’s COVID-19 vaccine has shown effectiveness against the emerging variants of the disease, specifically the now prevalent Delta variant. The potential need for additional booster shots of the vaccine to maintain longer-term immunity as well as protection against possible future variants is also contributing to the stock’s move higher.”
You can also take a peek at 10 Best Healthcare Stocks to Buy According to Matthew Halbower’s Pentwater Capital Management and 10 Large-Cap Stocks to Buy According to Anand Parekh’s Alyeska Investment Group
