Investing legends David Einhorn, John Paulson, and Bill Ackman aren’t always right, but they often are. Over the years, they’ve consistently picked stocks that have allowed their hedge funds to outperform the market, generating impressive returns in the process and fueling the growth of their fortunes.
Let’s take a look at some of the stocks that these and other legendary billionaires love.
Google’s parent company is a popular pick
Shares of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) can be found in the portfolios of many billionaire hedge fund managers. For Third Point LLC, Omega Advisors, Point72 Asset Management, Viking Global Investments, and Appaloosa Management, it was a top five-holding as of the end of March.
Alphabet was Omega Advisor’s largest holding, accounting for just over 5.6% of its portfolio. Omega head Leon Cooperman has a net worth of $3.2 billion. It represented nearly 8% of Appaloosa’s portfolio, the hedge fund run by billionaire David Tepper, whose vast personal fortune totals $11.4 billion, according to Forbes. For Viking Global, it was a bit less at just under 7%, but was still the fund’s fourth-largest holding. Viking’s CEO, Ole Andreas Halvorsen, has a net worth of $3.1 billion. Alphabet was Point72’s third-largest holding, but only represented about 1.5% of its portfolio. Point72 manages the $12.7 billion personal fortune of Steve Cohen, whose SAC Capital was once one of the best-performing hedge funds. Lastly, about 5% of Third Point’s portfolio was invested in the search giant as of the end of last quarter. Activist investor Dan Loeb runs Third Point, and has about $2.6 billion to his name.
Cohen and Halvorsen also love Google’s chief rival
Facebook (NASDAQ:FB) doesn’t compete with Alphabet directly — it doesn’t run a search engine — but it does compete for online advertising dollars. As of March 31, several billionaire investors counted it among their top holdings.
It was Point72’s second-largest holding, representing about 2% of Cohen’s portfolio, and Halvorsen’s largest holding, accounting for about 10% of Viking Global’s portfolio. Interestingly, it’s a new position for Halvorsen — he acquired his entire stake sometime last quarter. Lone Pine Capital bought Facebook shares in the first quarter, but had already owned many Facebook shares prior to the acquisition. Those additional purchases, however, made it Lone Pine’s second-largest holding, representing nearly 6.5% of its portfolio. Lone Pine’s portfolio manager, Stephen Mandel, has a net worth of $2.5 billion.
Betting big on pets
Zoetis (NYSE:ZTS) is the largest producer of medicine for pets. It was also Pershing Square’s largest holding as of the end of March. It represented about 21% of the hedge fund’s portfolio, whose head, Bill Ackman, has a personal fortune of $1.6 billion. Ackman, however, has been looking to unload much of his Zoetis stake. Earlier this month, The New York Times reported that Pershing Square planned to sell about 40% of its Zoetis shares.
But Pershing Square isn’t the only fund invested in Zoetis. It’s also one of Cohen’s top holdings. It represented just over 1.3% of Point72’s portfolio, but was the fund’s fifth-largest holding at the end of last quarter.
Another tech megacap
E-commerce giant Amazon (NASDAQ:AMZN) has been one of the best-performing stocks over the last 12 months. It’s also one of the most commonly held stocks among billionaire hedge fund managers. Amazon represented almost 9% of Tiger Global Management’s portfolio as the end of March. Tiger Global head Chase Coleman III has a net worth of $2.4 billion. It was also among Mandel’s and Halvorsen’s top picks, representing about 5.9% and 8.9% of their portfolios, respectively.
Coleman and Einhorn continue to hold Apple
Apple (NASDAQ:AAPL) isn’t the hedge fund darling it once was, but is still a popular pick. David Einhorn has been a longtime Apple bull, and Apple remains the largest holding at his fund, Greenlight Capital, accounting for about 15% of its portfolio as of the end of last quarter. Einhorn, known for his activist investing, is worth $1.45 billion. Apple is also one of Coleman’s largest holdings, representing nearly 8.9% of Tiger Global’s portfolio at the end of March.
Coleman also loves Priceline
Priceline (NASDAQ:PCLN) is Coleman’s third-largest holding, accounting for just over 10.2% of Tiger Global’s portfolio as of the end of last quarter. It was Mandel’s fourth-largest holding, representing over 5% of Lone Pine Capital’s portfolio at the end of March.
Allergan is Paulson’s biggest holding
John Paulson is one of the richest hedge fund managers in the world, with a net worth of $9.8 billion. His fund, Paulson & Co., owns dozens of stocks, but its single biggest holding is the drug-maker Allergan (NYSE:AGN). It represented nearly 10.8% of his portfolio at the end of last quarter. It represented an even larger portion of Loeb’s portfolio — about 12.3% — but was only Third Point’s second-largest holding. It was Elliot Management’s fourth-largest holding, about 7% of its portfolio. Elliot Management’s Paul Singer has a personal fortune of $2.2 billion.
Paulson also loves Teva
Paulson’s interest in pharmaceuticals extends beyond Allergan. Paulson & Co.’s third-largest holding is Teva Pharmaceutical (NYSE:TEVA). It represented just over 8% of Paulson’s portfolio at the end of March. It was also one of Halvorsen’s largest holdings, accounting for almost 7.8% of Viking Global’s portfolio.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon.com, Apple, Facebook, and Priceline Group. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool recommends Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.