In this article, we discuss the top 10 stock picks in Cliff Asness’ Portfolio. If you want to skip our detailed analysis of Cliff Asness’ history, investment philosophy, and hedge fund performance, go directly to Cliff Asness Portfolio: Top 5 Stock Picks.
Investment management guru Cliff Asness is a renowned name in the world of hedge funds and finance. He is the founder, managing principal and chief investment officer at the Connecticut-based hedge fund, AQR Capital Management. Asness earned his B.S. in Economics from the Wharton School, and his B.S. in Engineering from the Moore School of Electrical Engineering at the University of Pennsylvania, graduating summa cum laude in both. He received his M.B.A., and later, his Ph.D. in Finance from the University of Chicago. Prior to co-founding AQR Capital Management, Cliff Asness served as managing director and director of quantitative research for the Asset Management Division of The Goldman Sachs Group.
Some of the top stocks present in the investment portfolio of AQR Capital Management at the end of the second quarter of 2021 include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN) and Facebook, Inc. (NASDAQ:FB), among others discussed in detail below.
Cliff Asness of AQR Capital Management
With this background in mind, let us now look towards the top 10 stock picks in Cliff Asness’ portfolio. We made use of AQR Capital Management’s 13F portfolio for the second quarter for this analysis.
Why should we pay attention to Cliff Asness’ stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Cliff Asness’ Portfolio: Top 10 Stock Picks
10. The Procter & Gamble Company (NYSE:PG)
AQR Capital Management’s Stake Value: $536.8 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.92%
Number of Hedge Fund Holders:
The Procter & Gamble Company (NYSE:PG) is a multinational consumer goods corporation that provides household products and packaged goods. The Ohio-based company ranks tenth on our list of the top 10 stock picks in Cliff Asness’ portfolio.
On October 5, BofA analyst Bryan Spillane initiated coverage of The Procter & Gamble Company (NYSE:PG) with a Buy rating and $160 price target on the company’s shares.
AQR Capital Management currently holds over 3.98 million shares of the company. These shares amount to over $536.8 million and represent 0.92% of fund’s total investment portfolio value. As of the end of the second quarter of 2021, 68 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Procter & Gamble Company (NYSE:PG).
9. Thermo Fisher Scientific Inc. (NYSE:TMO)
AQR Capital Management’s Stake Value: $536.9 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.92%
Number of Hedge Fund Holders: 87
Thermo Fisher Scientific Inc. (NYSE:TMO) is a Massachusetts-based company that operates as a provider of scientific instruments, reagents and consumables, and software services. The company ranks ninth on the list of the top 10 stock picks in Cliff Asness’ portfolio.
As of the end of the second quarter, 87 hedge funds tracked by Insider Monkey reported owning stakes in Thermo Fisher Scientific Inc. (NYSE:TMO). The total worth of these stakes is $7.39 billion. This shows the hedge fund sentiment is positive for the company as 79 funds had stakes in the company in the previous quarter, having a total worth of $6.25 billion.
On September 23, Goldman Sachs analyst Matthew Sykes upgraded Thermo Fisher Scientific Inc. (NYSE:TMO) stock to Conviction Buy from Buy, raising the price target to $690 from $600.
In its Q2 2021 investor letter, ClearBridge Investments mentioned Thermo Fisher Scientific Inc. (NYSE:TMO). Here is what they said:
“Two additional names in the health care sector in the quarter, partially funded with a sale, made strong contributions and helped push our relative exposure to the sector from underweight to overweight. We added Thermo Fisher Scientific to increase our exposure to health care tools, which has been an attractive and core segment within health care. Thermo Fisher’s instruments are used to monitor and protect air, water, and food quality, and the company has strong long-term fundamentals, a top-tier management team and a diversified business.”
8. Target Corporation (NYSE:TGT)
AQR Capital Management’s Stake Value: $563.9 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.97%
Number of Hedge Fund Holders: 66
Target Corporation (NYSE:TGT) is a retail corporation that operates large-scale food and merchandise stores. Ranked eighth on the list of the top 10 stock picks in Cliff Asness’ portfolio, Target Corportation (NYSE:TGT) has a market capitalization of $124.90 billion.
According to the recent 13F Filings, AQR Capital Management holds 2.33 million shares of Target Corporation (NYSE:TGT), amounting to $563.9 million in worth.
7. Alibaba Group Holding Limited (NYSE:BABA)
AQR Capital Management’s Stake Value: $763.4 million
Percentage of AQR Capital Management’s 13F Portfolio: 1.32%
Number of Hedge Fund Holders: 146
In the second quarter of 2021, Cliff Asness held 3.36 million shares of Alibaba Group Holding Company (NYSE:BABA), amounting to $763.4 million in worth. These shares represented 1.32% of his investment firm’s total portfolio value. At the end of the second quarter of 2021, 146 hedge funds in the database of Insider Monkey held stakes worth $16.79billion in Alibaba Group Holding Limited (NYS:BABA).
On September 6, KGI Securities began coverage of Alibaba Group Holding Limited (NYSE:BABA) with a Neutral rating and $26.34 price target on its shares.
In the Q2 2021 investor letter of Polen Capital Management, the fund mentioned Alibaba Group Holding Limited (NYSE:BABA). Here is what the fund said:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
AQR Capital Management’s Stake Value: $818.4 million
Percentage of AQR Capital Management’s 13F Portfolio: 1.41%
Number of Hedge Fund Holders: 64
According to the Q2 13F Filings, AQR Capital Management holds over 6.8 million shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), worth $818.3 million and representing 1.41% of the investment fund’s portfolio value. By the end of the second quarter of 2021, 64 hedge funds out of the 873 tracked by Insider Monkey held stakes in Taiwan Semiconductor Manufacturing Company (NYSE:TSM), worth roughly $10.4 billion, down from 76 hedge funds in the preceding quarter with stakes worth approximately $10.8 billion.
In the Q2 2021 investor letter of Wedgewood Partners, the fund mentioned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Here is what they said:
“We initiated a new position in Taiwan Semiconductor Manufacturing, the largest contract manufacturer of logic semiconductors in the world. The Company has invested prodigious amounts of capital ($17 billion in 2020 alone and as much as $28 billion this year) over the past several years, at returns that suggest to us a very steep and sustainable competitive advantage. The Company has a very long runway to grow its business at a double-digit rate, driven by several favorable industry and company-specific trends including semiconductor architectural design changes, increasing manufacturing process complexity, and the proliferation of more logic semiconductors in more devices.
With over 50% market share, more than 3X that of its next largest competitor, Samsung, the Company dominates the contract foundry industry for logic semiconductors (source: Trendforce). Taiwan Semi has erected a formidable competitive barrier with its manufacturing capacity, as the Company carries over $150 billion in gross PPE (property, plant, and equipment) on its balance sheet. This would put the Company in the top echelons of invested tangible capital, globally. Further, the Company has committed to a multi-year, $100 billion capital investment program aimed at building out some of the only capacity capable of manufacturing leading-edge, sub 7 nanometers (nm) resolution integrated circuits. While semiconductor cycles are notoriously boom-bust, the Company has already secured enough demand to drive very high utilization rates for this new bleeding-edge capacity much earlier compared to previous capacity rollouts…” (Click here to see the full text)
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Disclosure. None. Cliff Asness’ Portfolio: Top 10 Stock Picks is originally published on Insider Monkey.