Original title: gold fund bosses are sweeping these three top stocks source: China Finance Online Co Ltd website
Many of the most famous investment masters around the world actively entered the market in the first quarter. Fund managers with at least $100m in assets under management in the US are required to file 13F filings with the Securities and Exchange Commission (SEC) within 45 days of the end of each quarter, disclosing changes in their positions, which can provide many investment implications.
The 13F documents for the second quarter will not be released until mid-August, but according to the documents from the first quarter, a group of well-known fund managers took advantage of the low price to sweep in several top stocks at a discount.
In the first quarter, for example, Pershing Square, INC. Capital, owned by Bill Ackman, increased its stake in Starbucks Corp (Starbucks) and Hilton Global Hotels (Hilton Worldwide Holdings). Ruane Cunniff & Goldfarb, a fund manager at Sequoia Fund, recently revealed a new position for Walt Disney Company (Walt Disney) in the second quarter. Let's see why these stocks are worth buying.Enter, become the target of fund boss one after another.
1. Starbucks Corp: still actively developing business
Pershing Capital's Bill Ackman almost doubled Starbucks Corp's position in the first quarter. During the stock market crash in March, Starbucks Corp's share price plummeted to a low of $50.02. Now the share price has rebounded to about $75. Although the current price has rebounded a lot, it is still below the 52-week high of $98.94.
Starbucks Corp's second-quarter revenue fell 5 per cent year-on-year, while global comparable store sales fell 10 per cent. The company will continue to face challenges in the short term, but management expects sales to recover in the fourth quarter ending in September and continue to pick up next year.
Starbucks Corp appears to be a mature restaurant chain with more than 32000 stores around the world, but management is still actively looking for ways to maintain revenue growth, such as successfully expanding non-store retail channels and partnering with Nestle to build Starbucks by Nespresso product lines. Seeing that the flow of people in stores is decreasing at present, this strategy is more beneficial to Starbucks Corp.
Sales of these branded products, including coffee beans and coffee granules, canned drinks and other branded products in the channel business, rose 16% year-on-year to $519 million in the second quarter.
Due to the severe impact of the epidemic, profits fell sharply in fiscal year 2020, and traditional valuation indicators are not very useful at present, but the current price-to-sales ratio (Pmax S) is 3.42 times, which belongs to the middle of the historical valuation range. For global ace consumer brands, stock prices are reasonable at current valuations.
two。 Hilton Hotel: world-class hotel operator
Under the impact of the epidemic, one of the worst-hit areas is the tourism industry, but the so-called danger is also organic, and it is a good time to attract low leading stocks. Hilton is the ideal target for Bill Ackman, whose flagship increased its stake in the first quarter. Lone Pine Capital, another well-known hedge fund, also opened a new position for the stock in the first quarter.
What's so good about Hilton? First of all, the company has a variety of hotel brand portfolios, ranging from top to bottom, with the most popular choices being medium-to large-scale hotel chains such as Hampton and Noble Park Hotel, while the most luxurious iconic brands are Waldorf Astoria, LXR, Hong Lay Hotels and Resorts, which can be found by tourists with different budgets.
Hilton also has a promising membership program, with 106 million members, which will grow by 21% in 2019. So Hilton has a large customer base and is expected to patronize again to promote business development.
Hilton's business model is quite attractive, mainly to manage and join the way to make money, so the capital investment is very small, by charging hotel owners, can already generate most of the income. After paying the service charge, the hotel owner can choose Hilton's membership plan, marketing and other services in return.
Hilton's adjusted EBITDA (earnings before tax, interest, depreciation and amortization) reached $2.3 billion in 2019, and the company estimates that there are currently about 405000 new rooms under construction, which will generate a further income of about $800m for the adjusted EBITDA. If you know that all Hilton hotel brands have about 977000 available rooms in the first quarter, you will know the potential of these developments.
From 2016 to 2019, Hilton's cumulative revenue grew by 43% and free cash flow per share increased by 47%, driving the share price up 92% over the same period. Since the beginning of the year, the stock is down 31%, but in the long run, the current price can be said to be on sale. This is a top hotel stock, as long as the economy recovers, investors will be able to reap handsome returns.
3. Walt Disney Company: undervalued streaming Media Unit
Walt Disney Company has fallen 19 per cent since the start of the year, and now the company is reopening theme parks, while consumer products accounted for 38 per cent of revenue in the fiscal year to 2019. At present, its four Walt Disney World Paradise and Disney Springs have all reopened, so recently analysts have been bullish on this stock.
Since launching the Sequoia Fund in 1970, Ruane Cunniff & Goldfarb has returned an average of 13.4% a year, outperforming the S & P 500 by more than two percentage points. Ruane Cunniff is most famous for doing a lot of homework before investing, so he takes a fancy to Walt Disney Company, which is of great significance.
Walt Disney Company's latest quarter, as expected, the performance is frightening, as the theme parks are forced to close, profits plummeted. The recent third-quarter results are also disappointing, but Ruane Cunniff is looking further, not just at the immediate crisis, but when the economic environment returns to normal, Walt Disney Company will show his value again. Walt Disney Company has an advantage because more people will watch the company's digital film and television content in the future.
Analysts at Goldman Sachs Group (Goldman Sachs) believe the market has underestimated Walt Disney Company's direct selling business by at least 50 per cent. Analysts believe that as long as the epidemic is over, Walt Disney Company's theme park will fully recover, and by 2025, the number of Disney+ subscribers will reach 150 million. Other analysts have a better view of Walt Disney Company's streaming media business.
By early 2020, the company's share price was about $140 upstairs, nearly 20 per cent higher than the current share price, while the price-to-sales ratio was about 3.0 times, which belongs to the historical range of Walt Disney Company's valuation and does not seem expensive.
Like Starbucks Corp, investors can at least buy this top brand stock at a reasonable price. Before taking over the position of chief helmsman, Bob Chapek, the new chief executive, served as the head of the theme park business and successfully improved the profit margin of the business. if he could cook the bowl and lead the whole company to improve its profit margin, the current price of the stock would certainly be on the low side and seriously undervalued.