In this article, we will be taking a look at the 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen. To skip our analysis of Steve Cohen’s profile, investment strategy, and 13F holdings, you can go directly to see the 5 Blue Chip Stocks to Buy According to Billionaire Steve Cohen.
With a net worth estimated at $17.5 billion, Steve Cohen is the founder and CEO of Point72 Asset Management LP, a global investment firm based in Stamford, Connecticut with $26.1 billion in assets under management as of July 1, 2022. Point72 is a research-driven investment management firm built around a core position in discretionary long/short equities, as well as systematic, global macro and other strategies.
Cohen received his bachelor’s degree in Economics from The Wharton School at the University of Pennsylvania and started his investing career at Gruntal & Co. Cohen managed proprietary capital for 14 years at Gruntal & Co. before starting his own hedge fund, SAC Capital Advisors in 1992. Cohen managed significant success with his hedge fund and generated 25% of annual returns on average from 1992 to 2013. Point72 is following in its predecessor’s footsteps and generated a 9.2% return in 2021.
As of Q2 2022, Steve Cohen’s Point72 Asset Management’s 13F portfolio is valued at $23.7 billion. During the second quarter, the hedge fund added 614 new positions to the portfolio, extended exposure to 356 existing positions, reduced exposure to 292 positions, and closed out 374 positions. Amazon.com, Inc. (NASDAQ:AMZN), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD) received the biggest additional investment from Point72 Asset Management during the second quarter with the number of shares increasing by 1401%, 735%, and 603%, respectively, as compared to the previous quarter.
The list of 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen cumulatively accounted for 5.31% of the portfolio weight with the highest concentration in Visa Inc. (NYSE:V) accounting for 1.15% of the portfolio weight.
Large, well-established companies with an excellent reputation and a track record of operational and financial excellence are typically classified as ‘Blue Chip’ companies or stocks. Blue chip stocks typically have high market capitalizations, market leadership positions and high brand value, such as Visa Inc. (NYSE:V), The Coca-Cola Company (NYSE:KO), and Microsoft Corporation (NASDAQ:MSFT), among others. The market leadership, reputation and historic performance suggests that blue chip stocks generally fare better fundamentally than the rest of the market even through market challenges.
The turmoil in macroeconomic conditions caused by massive inflationary pressures is having its impact on the equity markets. Central banks across the globe are hiking benchmark interest rates to control inflation, with the US Fed expected to announce at least a 75-bps hike in its upcoming policy announcement. If economic data continues to miss expectations, stocks could continue to fall.
Nevertheless, fundamentals-based investments in quality stocks have the potential to do well in the long-term as stocks are currently trading at significantly lower multiples.
Steven Cohen of Point72 Asset Management
Methodology
For our list of 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen, we took 10 leading companies from Steve Cohen’s Point72 Asset Management 13F portfolio at the end of Q2 2022 that had a mixture of growth potential, sector leadership, and defensive qualities and ranked them from #10 to #1. We also provided the number of hedge fund holders in our database that held shares in the same stocks at the end of Q2 2022.
10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen
10. Starbucks Corporation (NASDAQ:SBUX)
Point72 Asset Management’s Stake Value: $71,160,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.30%
Number of Hedge Fund Holders: 55
Seattle, Washington-based Starbucks Corporation (NASDAQ:SBUX) is a multinational chain of coffeehouses and roastery reserves with more than 34,000 stores in 84 markets across the world. With a history dating back to 1971, Starbucks Corporation (NASDAQ:SBUX) caters to millions of customers every day.
Steve Cohen’s Point72 Asset Management owns 931,537 shares of Starbucks Corporation (NASDAQ:SBUX), accounting for 0.30% of its 13F portfolio. The stock was a new addition to the hedge fund’s 13F portfolio, in Q2 2022.
Earlier this year in August, Starbucks Corporation (NASDAQ:SBUX) released the financial results for the quarter ended July 3, 2022. Its revenue increased by 9% y-o-y to $8.2 billion, while it reported a net profit of $914 million, for the three months. It reported a normalized EPS of $0.84, beating the consensus by $0.08, and declared a cash dividend of $0.49 per share for the quarter.
In September, Starbucks Corporation (NASDAQ:SBUX) announced a 3-year ‘Reinvention Plan’ to deliver 10-12% annual revenue growth and 15-20% EPS growth. Afterwards, several analysts raised their price targets for the coffeemaker’s stock including JPMorgan analyst raising the target to $100 from $92 per share, among others.
As of Q2 2022, 55 of the 895 hedge funds tracked by Insider Monkey owned shares of Starbucks Corporation (NASDAQ:SBUX), valued at $1.4 billion. Its largest shareholder was Viking Global with ownership of 9.2 million shares valued at $1.2 billion.
Alongside The Coca-Cola Company (NYSE:KO), Meta Platforms, Inc. (NASDAQ:META), and Visa Inc. (NYSE:V), Starbucks Corporation (NASDAQ:SBUX) is a blue chip stock owned by billionaire Steve Cohen’s Point72 Asset Management at the end of Q2 2022.
9. The Home Depot, Inc. (NYSE:HD)
Point72 Asset Management’s Stake Value: $71,336,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.30%
Number of Hedge Fund Holders: 80
Based in Atlanta, Georgia, The Home Depot, Inc. (NYSE:HD), is the world’s largest home improvement retailer with more than 2,300 stores in the United States, Mexico, and Canada. In addition to the physical stores, the company also operates its ecommerce platform and offers more than a million products focused on home improvement for professional contractors as well as individuals undertaking DIY projects.
Steve Cohen’s Point72 Asset Management owns 260,095 shares of The Home Depot, Inc. (NYSE:HD), accounting for 0.30% of its 13F portfolio. The stock was a new addition to the hedge fund’s 13F portfolio, in Q2 2022.
In August, The Home Depot, Inc. (NYSE:HD) released its financial results for the second quarter of 2022. Its net sales increased by 7% y-o-y to $43.7 billion, while its net earnings increased by 8% y-o-y to $5.2 billion, for the three months ended July 31, 2022. The normalized EPS was recorded at $5.05 per share, beating the consensus by $0.12.
The Home Depot, Inc. (NYSE:HD) declared a cash dividend of $1.90 per share for the second quarter and announced a $15 billion share repurchase program. Following the earnings release, Truist analyst Scot Ciccarelli raised the price target on its shares to $399 from $375.
As of Q2 2022, 80 of the 895 hedge funds tracked by Insider Monkey have positions in The Home Depot, Inc. (NYSE:HD), worth $5.4 billion.
Diamond Hill Capital mentioned The Home Depot, Inc. (NYSE:HD) in its Q1 2022 investor letter. Here is what the firm has to say:
“Home Depot shares underperformed as continued solid fundamental results were outweighed by concerns about the impact rising mortgage rates may have on the housing market and general inflationary pressures potentially leading to a consumer spending slowdown. We view the long-term prospects and multi-year fundamental outlook as unchanged.”
8. NIKE, Inc. (NYSE:NKE)
Point72 Asset Management’s Stake Value: $74,606,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 72
NIKE, Inc. (NYSE:NKE), based in Beaverton, Oregon, is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities.
As of Q2 2022, Steve Cohen’s Point72 Asset Management holds 729,999 shares of NIKE, Inc. (NYSE:NKE), accounting for 0.31% of the 13F portfolio of the hedge fund. The hedge fund increased its stake by 120% in Q2 2022, as compared to the previous quarter.
In June, NIKE, Inc. (NYSE:NKE) released the financial results for the quarter ended May 31, 2022. Its revenue decreased by 1% y-o-y to $12.2 billion, while its net income decreased by 5% y-o-y to $1.4 billion, for the three months. It reported a normalized EPS of $1.00, beating the consensus by $0.19, and declared a quarterly cash dividend of $0.305 per share.
In September, UBS analyst Jay Sole affirmed his bullish sentiment for NIKE, Inc. (NYSE:NKE) shares despite the possibility of macro issues impacting the stock in the near term. The analyst maintains a target price of $156 for its NIKE, Inc. (NYSE:NKE) shares with a ‘Buy’ rating.
As of Q2 2022, 72 of the 895 hedge funds tracked by Insider Monkey owned shares of NIKE, Inc. (NYSE:NKE), valued at $3.3 billion.
7. Oracle Corporation (NASDAQ:ORCL)
Point72 Asset Management’s Stake Value: $93,479,000
Percentage of Point72 Asset Management’s 13F Portfolio: 0.39%
Number of Hedge Fund Holders: 69
Austin, Texas-based Oracle Corporation (NASDAQ:ORCL) is a leading software technology company with a focus on providing products and services to address enterprise information technology environments. Its portfolio of products and services includes Oracle Cloud Infrastructure, Oracle Cloud Applications, and hardware and software solutions.
Steve Cohen’s Point72 Asset Management owns 1,337,900 shares of Oracle Corporation (NASDAQ:ORCL), accounting for 0.39% of its 13F portfolio, as of Q2 2022. The hedge fund increased its stake by 1% in Q2 2022, as compared to the previous quarter.
Earlier this month in September, Oracle Corporation (NASDAQ:ORCL) released its financial results for the quarter ended August 31, 2022. Its total revenues increased by 18% y-o-y to $11.4 billion, while its net income shrunk by 37% y-o-y to $1.5 billion, for the three months. The normalized EPS was recorded at $1.03 for the quarter, missing the consensus by $0.04, and declared a quarterly cash dividend of $0.32 per share.
Following the earnings release, analysts at Evercore ISI, and BMO Capital raised price targets on Oracle Corporation (NASDAQ:ORCL) shares to $87 from $78, and $90 from $86, respectively.
As of Q2 2022, 69 hedge funds tracked by Insider Monkey held shares of Oracle Corporation (NASDAQ:ORCL), worth $4.2 billion.
6. Microsoft Corporation (NASDAQ:MSFT)
Point72 Asset Management’s Stake Value: $99,152,000
Percentage of Point72 Asset Management’s 13F Portfolio:
Number of Hedge Fund Holders: 0.41%
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft Corporation (NASDAQ:MSFT) boasts over 1.4 billion monthly active devices running its flagship operating system, Windows 10 or 11.
Steve Cohen’s Point72 Asset Management owns 386,060 shares of Microsoft Corporation (NASDAQ:MSFT), accounting for 0.41% of its 13F portfolio. The hedge fund increased its stake by 283% in Q2 2022, as compared to the previous quarter.
Earlier this year, Microsoft agreed to acquire Activision Blizzard, Inc. (NASDAQ:ATVI) in an all-cash transaction valued at $68.7 billion. The proposed acquisition is expected to accelerate growth in Microsoft’s Gaming business across mobile, PC, console, and cloud although it hasn’t closed yet.
As of Q2 2022, Microsoft Corporation (NASDAQ:MSFT) is the most sought-after stock among the 895 hedge funds tracked by Insider Monkey as 258 of these hedge funds held shares in the software giant, valued at $56 billion. Fisher Asset Management was the largest shareholder in the company owning 28.7 million shares valued at $7.4 billion.
Like Microsoft Corporation (NASDAQ:MSFT), The Coca-Cola Company (NYSE:KO), Meta Platforms, Inc. (NASDAQ:META), and Visa Inc. (NYSE:V) are also blue chip stocks owned by billionaire Steve Cohen’s Point72 Asset Management at the end of Q2 2022.
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Disclosure: None. 10 Blue Chip Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.