In this article, we discussed the top 10 stocks and portfolio management strategy of unknown billionaire Phil Gross. Click to skip our discussion of Gross’s investment strategy and his latest portfolio updates to read Top 5 stocks chosen by unknown billionaire Phill Gross…
Billionaire Phill Gross, co-founder of Adage Capital Management, successfully expanded his wealth management firm from $ 3.8 billion in assets under management in 2001 to $ 45 billion at the end of 2020. The Boston Hedge Fund primarily manages assets for endowment and fund clients. In addition to the expertise of Phill Gross and co-founder Robert Atchinson in stock picking, the company has hired a team of industry portfolio managers to monitor market activity and use fundamental intra-industry investment approaches to achieve desired results. results.
Billionaire Phil Gross at Adage Capital focuses on the healthcare sector. He was also a medical analyst at the Harvard Management Company, where he worked for 18 years before founding Adage. A pair of Harvard University trust funds, Gross and Atchinson, have managed to outperform the S&P 500 by an average of 4.5 percentage points annually.
Adage Capital Management is working to build a well-diversified portfolio of stocks to outperform the broader market index. Information technology stocks dominated Phill Gross’s hedge fund portfolio, followed by healthcare, consumer and financial stocks. In addition to these sectors, the company also made investments in the energy, industrial, utilities and many other sectors. In addition to creating value through investments in high-growth stocks like Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN) and Facebook (NASDAQ: FB), Adage Capital also likes to hold a long-term position in dividend-rising stocks like Microsoft ( NASDAQ: MSFT), Coca-Cola (NYSE: KO), Pepsi (NYSE: PEP), Procter & Gamble (NYSE: PG), and Intel Corp (NASDAQ: INTC). Its holding time for the top 10 stock positions averages around 12.30 quarters, while its holding time for all positions averages around 17 quarters.
At the end of the December quarter, the company owned 774 shares. During the quarter, 118 stock positions were sold and 171 new positions were opened. Tesla (NASDAQ: TSLA) is Adage Capital’s largest new position in Q4. The firm has significantly increased its stake in Alphabet and oil giant Exxon Corporation (NYSE: XOM). Moreover, Adage has increased its position in companies that are likely to benefit from the resumption of economic activity. These positions include Walt Disney (NYSE: DIS), Visa (NYSE: V), MasterCard (NYSE: MA), General Electric (NYSE: GE) and many others. In general, the company has increased the number of its 226 positions. On the other hand, billionaire Phil Gross’s hedge fund did not fully sell any of its key stock positions in the fourth quarter of 2020. The largest sale of shares accounted for less than 0.70% of the portfolio.
Phil Gross received his BS in Finance and Economics from the University of Wisconsin in 1982. He received his Master’s Degree in Investment in 1983. Gross is an elusive billionaire who shuns the spotlight and fame. This is why we call him the “unknown” billionaire. It is unknown that he may be a market advocate, but we pay special attention to anyone who understands and outperforms the market with wisdom and consistent success.
While Phill Gross’s reputation remains unchanged, the same cannot be said for the hedge fund industry as a whole, as its reputation has been tarnished in the past decade, during which its hedged performance has not been able to keep up with the unhedged performance of the market indices. On the other hand, Insider Monkey’s research has identified a select group of hedge fund holdings in advance that have outperformed the S&P 500 index funds by more than 124 percentage points since March 2017. Between March 2017 and 26 February 2021, the results of our monthly newsletter have been returned. 197.2% versus 72.4% for SPY. Our stock picks outperformed the market by more than 124 percentage points (details here). We were also able to pre-identify a select group of hedge fund holdings that were significantly behind the market. We’ve been tracking and listing these stocks since February 2017 and they lost 13% to November 16. This is why we believe hedge fund sentiment is an extremely useful indicator that investors should look out for. You can subscribe to our free newsletter on our home page to receive our stories in your inbox.
Let’s start with an overview of the top 10 stocks chosen by unknown billionaire Phill Gross:
10. Walt Disney (NYSE: DIS)
The world’s largest entertainment giant Walt Disney (NYSE: DIS) has been one of the favorite hedge fund stocks of unknown billionaire Phil Gross over the past two decades. His firm increased its position at Disney by 2% in the fourth quarter to 2.2 million shares, worth $ 401 million. After huge losses in early 2020, Walt Disney stock rallied strongly in the second half of the pandemic and extended that gain to 2021. Its streaming network Disney Plus has been the biggest catalyst for sales growth in nine months.
Harding Loevner, an investment management company, said in a letter to an investor for the fourth quarter that Disney is in the middle of a bold shift. Here’s what Harding Loewner said:
“A century after its founding in 1923, Disney is in the midst of a bold transition from traditional media networks and the entertainment model — with cable TV, theme parks and theater films dominating its revenues — to consumer-focused streaming media. model. Keys to Disney’s Transition: Peerless storytelling combined with financial power. The company reliably creates content that people around the world want to consume. It also sped up spending on original content to drive subscribers to its new streaming platform. These factors have enabled Disney to weather the pandemic by increasing direct customer engagement. Such connections produce a rich crop of ideas used to customize offerings on a massive scale, reinforcing that participation in the virtuous circle and thereby increasing the life value of each client. Disney + subscribers reached 86.8 million one year after launch, up from 60 million to 90 million managers projected to reach in 2024. Sure, Netflix, Apple, and Amazon remain serious competitors in the new era of streaming entertainment (remember we said about everyone getting up at once), but this old dog is still struggling. “
9. Berkshire Hathaway Inc. (NYSE: BRK-B)
Warren Buffett’s investment holding company Berkshire Hathaway Inc. (NYSE: BRK.B) is among the top 10 stocks selected by unknown billionaire Phill Gross for 2021. His wealth management company cut its stake in Berkshire Hathaway by 12% in the December quarter. up to 1.76 million shares, which is 0.88% of the total portfolio. Berkshire Hathaway shares are up 12% in 2021, surpassing more than 7% gains on the broader market index.
Separately, Buffett, interestingly, acknowledged the error in the annual letter to shareholders, issued along with the quarterly report. In a letter, he stated:
“The final component in our GAAP figure – this ugly $ 11 billion write-off – is almost entirely a quantification of the mistake I made in 2016. Berkshire acquired Precision Castparts (“PCC”) that year, and I paid too much for the Company. I was not fooled in any way – I was just too optimistic about the normalized profit potential of the PCC. Last year my miscalculation was discovered due to adverse events in the aerospace industry, which is PCC’s most important source of clients. With the acquisition of PCC, Berkshire bought a great company — the best in the business. Mark Donegan, CEO of PCC, is a passionate manager who continually puts the same energy into the business as before we bought it. We are lucky that he controls everything. I believe I was right in concluding that over time the PCC will make good returns on the net tangible assets involved in its operations. However, I was wrong in my estimate of the average amount of future earnings, and therefore I was wrong in calculating the proper price to be paid for the business. PCC is not my first mistake of this kind. But he’s big. “
8. Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN)
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) was named among the top 10 stocks chosen by unknown billionaire Phill Gross for 2021 after he increased his position at the biotech company by 260% in the fourth quarter. At the end of the last quarter, the company owned 2.91 million shares of Alexion, which is 0.98% of the total portfolio.
Hedge funds became increasingly optimistic about ALXN. Recently, the number of bullish hedge fund positions has increased by 19. At the end of the fourth quarter of 2020, Alexion Pharmaceuticals had 77 hedge fund portfolios. The all-time high for this statistic is 58. This means that the optimistic number of hedge fund positions for this stock is currently at an all-time high. …
7. Tesla Inc (NASDAQ: TSLA)
Adage Capital Management opened a new position with Tesla (NASDAQ: TSLA) during the December quarter. The firm bought 659,500 shares for $ 465 million. Tesla shares have been underperforming this year due to a greater investor focus on equities and concerns over the TSLA valuation. Despite short-term volatility, Tesla’s fundamentals look strong amid strong growth in demand for electric vehicles. The company expects to increase vehicle shipments by 50% annually over the next two years.
Tesla had 68 hedge fund portfolios at the end of the fourth quarter of 2020, up from an all-time high of 67 for this stat. This means that the optimistic number of hedge fund positions in this stock is currently at an all-time high. … TSLA investors should pay attention to the recent rise in interest in hedge funds. Our database had 67 hedge funds with TSLA positions at the end of the third quarter.
6. Exxon Corporation (NYSE: XOM)
Unidentified billionaire Phil Gross substantially increased his position at Exxon Corporation (NYSE: XOM) in the fourth quarter of 2020 to 1.14% of the total portfolio. It looks like Phil Gross’s stock picking strategy worked for Exxon. This is due to the fact that shares of the oil giant have risen by almost 20% since the beginning of this year, thanks to the rise in oil prices. In addition, the company offers a dividend yield of over 6%. The number of long bets on hedge funds has recently increased by 11. At the end of the fourth quarter of 2020, Exxon Mobil was in 63 hedge fund portfolios. The all-time high for this stat is 68.