Steven Cohen and David Tepper agree on the 5 highest paying stocks

Summary

  • Gurus were among the top 10 highest earning hedge funds.

Earlier this month, the 21st Annual Wealthy Institutional Investors List revealed that hedge fund giants steven cohen (Trades, Portfolio), Head of Point72 Asset Management, and Appaloosa Management’s David Tipper (Trades, Wallet) were among the biggest earners in 2021. Gurus tied for fifth place last year.

The list, which is made up of the highest-earning managers, revealed that the top 25 hedge funds made a combined profit of $26.64 billion last year.

Other well-known investors tracked by GuruFocus who made the top 10 were Jim Simons (Businesses, Portfolio), the head of Renaissance Technologies, Kenneth Griffin of Citadel, the leader of Third Point Daniel Loeb (Businesses, Portfolio) and Ray Dalio (Trades, Portfolio), the founder of Bridgewater Associates.

Breaking their tie streak over the past few years, Tepper raked in $1.6 billion in 2021, dropping him to sixth place, while Cohen was seventh with $1.4 billion. Due to their strong performance, investors might be interested in knowing where the two gurus are finding value opportunities.

Cohen’s company, based in Stamford, Conn., executes a long-short strategy that involves bottom-up fundamental research processes, macro investments and insights to generate superior risk-adjusted returns.

By contrast, Tepper specializes in distressed debt. After becoming the owner of the Carolina Panthers professional football team, he announced in 2019 that he would return money to investors and convert his New Jersey-based hedge fund into a family office. As such, it mainly manages its own assets.

Although Cohen and Tepper have slightly different approaches to investing, they have a number of holdings in common. According to the GuruFocus Aggregated Portfolio, a premium feature based on 13F filings, the two gurus both held positions at Meta Platforms Inc. (FB, Financial), Amazon.com Inc. (AMZN, Financial), Micron Technology Inc. ( MU, Financial), Macy’s Inc. (M, Financial) and Occidental Petroleum Corp. (OXY, Financial), among several other stocks, at the end of the fourth quarter of 2021.

Metaplatforms

Tepper reduced its stake in Meta Platforms (FB, Financial) by 3.72% in the fourth quarter, while Cohen reduced its position by 31.58%. The gurus have a combined equity portfolio weighting of 10.33% in the stock.

Formerly known as Facebook, the Menlo Park, Calif.-based social media company has a market capitalization of $554.35 billion; its shares were trading around $203.66 on Thursday with a price-to-earnings ratio of 14.86, a price-to-book ratio of 4.49 and a price-to-sales ratio of 4.95.

The GF value line currently suggests that the stock is significantly undervalued based on its historical ratios, past financial performance and future earnings projections.

According to GuruFocus, Cohen has gained around 12% on his investment since the second quarter of 2020. Data from GuruFocus shows that Tepper’s investment has increased by 18.58% since the third quarter of 2016.

Among the gurus invested in meta-platforms, Ken Fisher (Trades, Portfolio) holds the largest stake with 0.34% of its shares outstanding. Baillie Gifford (Businesses, Portfolio), Dodge & Cox, Frank Sands (Businesses, Portfolio), Chase Coleman (Businesses, Portfolio), Spiros Segalas (Businesses, Portfolio), First Eagle investment (Businesses, Portfolio), Chris Davis (Businesses, Portfolio), Ruane Cunniff (Businesses, Portfolio), Philippe Laffont (Trades, Portfolio) and many other gurus also own the stock.

Amazon

In the fourth quarter, Cohen increased his stake in Amazon (AMZN, Financial) by 2,446.37%, while Tepper left his position unchanged. They have a combined equity portfolio weighting of 7.71% in the stock.

The Seattle-based e-commerce company has a market capitalization of $1.56 trillion; its shares were trading around $3,062.83 on Thursday with a price-to-earnings ratio of 47.53, a price-to-book ratio of 11.35 and a price-to-sales ratio of 3.38.

According to the GF Value Line, the stock is currently slightly undervalued.

GuruFocus estimates that Cohen has earned 28.11% on his investment since Q1 2017, while Tepper has returned 52.77% since Q1 2019.

Fisher holds the largest stake in Amazon with 0.43% of its shares outstanding. Other top investor gurus include Baillie Gifford (Businesses, Portfolio), Sables, Ségalas, Steve Mandel (Businesses, Portfolio), warren buffet (Businesses, Portfolio), Al Gore (Businesses, Portfolio), PRIMECAP management (Businesses, Portfolio), Coleman and Andreas Halvorsen (Jobs, Portfolio).

Micron Technology

After selling Micron Technology (MU, Financial) in the third quarter, Cohen took a new stake in the fourth quarter. Tepper left his position unchanged. Gurus have a combined portfolio weight of 7.42% in the stock.

The Boise, Idaho-based chipmaker has a market capitalization of $87.09 billion; its shares were trading around $78.22 on Thursday with a price-to-earnings ratio of 12.07, a price-to-book ratio of 1.91 and a price-to-sales ratio of 3.

Based on the GF value line, the stock appears to be fairly valued right now.

Data from GuruFocus shows that Cohen has earned around 24.62% on his investment so far. Tepper’s investment has returned about 12.9% since the fourth quarter of 2016.

With a 3.68% stake, Primecap is the company’s largest shareholder guru. Li Lu (Businesses, Portfolio), Ruane Cunniff (Businesses, Portfolio), Simons’ Renaissance Technologies, Seth Klarman (Businesses, Portfolio), Mohnish Pabrai (Businesses, Portfolio) and the Parnassus Endeavor Fund (Trades, Portfolio) also have significant investments in Micron.

Macy’s

During the fourth quarter, Cohen increased his Macy’s (M, Financial) position by 64.41%, while Tepper increased his stake by 44.23%. They have a combined equity portfolio weighting of 6.92% in the stock.

The iconic department store chain headquartered in New York has a market capitalization of $7.96 billion; its shares were trading around $27.03 on Thursday with a price-to-earnings ratio of 5.73, a price-to-book ratio of 2.13 and a price-to-sales ratio of 0.33.

The GF value line suggests that the stock is currently significantly overvalued.

Since inception in Q2 2021, GuruFocus estimates Cohen has earned 8.82% on the investment. Tepper has gained around 42.28% since the fourth quarter of 2020.

Among the gurus invested in the stock, Tepper holds the largest stake with 3.37% of its shares outstanding. Macy’s is also owned by Yaktman Asset Management (Businesses, Portfolio), Simons firm, Jana Partners (Businesses, Portfolio), John Husman (Businesses, Portfolio), Jeremy Grantham (Businesses, Portfolio) and Joel Greenblatt (Jobs, Portfolio).

western oil

Cohen increased his stake in Occidental Petroleum (OXY, Financial) by 1,060.96 during the fourth quarter, while Tepper reduced his stake by 0.6%. The stock has a combined weighting of 4.98% in their equity portfolios.

The Houston-based oil and gas producer has a market capitalization of $54.06 billion; its shares were trading around $57.49 on Thursday with a price-to-earnings ratio of 37.07, a price-to-book ratio of 5.08 and a price-to-sales ratio of 2.09.

According to the GF Value Line, the stock is currently significantly overvalued.

Data from GuruFocus indicates that Cohen has gained approximately 0.84% ​​on his investment since the first quarter of 2021. Since the fourth quarter of 2020, Tepper has recorded a gain of 214.59%.

Buffett is the company’s largest shareholder guru with 12.66% of its shares outstanding. Other gurus with big investments in Occidental are Dodge & Cox, Carl Icahn (Businesses, Portfolio), Simons firm, John Paulson (Businesses, Portfolio), the Smead Value Fund (Businesses, Portfolio) and the T Rowe Price Equity Income Fund (Jobs, Portfolio).

Additional Common Holdings and Portfolio Composition

Other stocks Cohen and Tepper both held as of December 31, 2021 included T-Mobile US Inc. (TMUS, Financial), PG&E Corp. (PCG, Financial), General Motors Co. (GM, Financial), The Energy Select Sector Fonds SPDR (XLE, financial) and Microsoft Corp. (MSFT, financial).

Cohen’s $24.82 billion equity portfolio, consisting of 1,044 stocks at the end of the fourth quarter, was heavily invested in the healthcare and technology sectors.

More than half of Tepper’s $3.89 billion equity portfolio, consisting of 44 stocks for the same period, was invested in the communications services and consumer discretionary sectors.

Disclosures

I/we have no positions in the stocks mentioned and I do not expect to initiate any positions in the next 72 hours.

The opinions of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com.

About Dianne Stinson

Check Also

Skechers is a sponsor of the pickleball championships, a sport that will likely attract the attention of more athletic companies

One thing Skechers Inc. and the sport of pickleball have in common: Both extend their …