In this article, we discuss the top 10 stock picks of Rajiv Jain’s GQG Partners as of the end of the third quarter of 2021 and assess their performance over the past 12 months. If you want to skip our detailed analysis of Jain’s history, investment philosophy, and hedge fund performance, go directly to the Was Rajiv Jain’s GQG Partners Right About These 5 Stocks?.
We prepared the actual contents of this article in November 2021, when we analyzed the Q3 portfolio of Rajiv Jain’s GQG Partners to discuss the top 10 picks of the hedge fund at that time. We are publishing this article today because it’s always interesting for the readers to analyze how good the so-called “smart money” is when it comes to stock picking. When we look at the stock picks/sells of hedge funds in hindsight, we can better analyze their performance and see whether they were right or wrong. In this article you will see the top 10 stock picks of Rajiv Jain’s GQG Partners as of the third quarter of last year. To assess the performance of these stocks and the hedge fund, we have mentioned their performance over the past 12 months. At the time of writing we had mentioned analyst ratings for these stocks from famous Wall Street analysts. It’d be interesting for our readers to see how right or wrong were these analysts’ price targets and calls.
Serving as its chairman and chief investment officer, Rajiv Jain is the founder of the Florida-based investment management firm, GQG Partners, as well as the lead portfolio manager for all GQG Partners strategies. He commenced investment operations at GQG Partners in 2016 with over 26 years of investment experience. Previously, Rajiv Jain served as a co-portfolio manager at Vontobel Asset Management in 1994, where he later on became co-chief executive officer, chief investment officer and head of equities, serving as the sole portfolio manager of the International Equities strategy and Emerging Markets Equities strategy, and the lead portfolio manager for the Global Equities strategy at the firm. Prior to that, he was an international equity analyst at Swiss Bank Corporation.
Some of the top stocks in the investment portfolio of GQG Partners at the end of the third quarter of 2021 included Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT) and Visa Inc. (NYSE:V), among others discussed in detail below.
10. Philip Morris International, Inc. (NYSE:PM)
GQG Partners’ Stake Value: $1.35 billion
Performance of the stock over the past 12 months as of November 22: +8%
Philip Morris International, Inc. (NYSE:PM) is a multinational cigarette and tobacco product manufacturing company based in New York. With products sold in over 180 countries, its most recognized and famous brands include Marlboro.
According to GQG Partners’ 13F filings for the third quarter of 2021, the fund holds over 14.2 million shares of Philip Morris International, Inc. (NYSE:PM), worth more than $1.39 billion, representing 3.69% of the fund’s portfolio value.
Terry Smith of Fundsmith LLP is one of the biggest stakeholders of Philip Morris International, Inc. (NYSE:PM) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 48 funds were bullish on the company by the end of Q3, compared to 46 in the previous quarter.
9. Charter Communications, Inc. (NASDAQ:CHTR)
GQG Partners’ Stake Value: $1.37 billion
Performance of the stock over the past 12 months as of November 22: -41%
Charter Communications, Inc. (NASDAQ:CHTR) is a Connecticut-based telecommunications and mass media company that provides broadband communications and entertainment services.
According to the third quarter securities filings, Rajiv Jain’s hedge fund owned over 1.88 million shares in Charter Communications, Inc. (NASDAQ: CHTR) worth $1.37 billion and representing 3.76% of the portfolio value.
On November 22, Loop Capital analyst Alan Gould lowered the price target on Charter Communications, Inc. (NASDAQ:CHTR) to $730 from $815, and kept a Hold rating on the shares after assuming coverage of the company. The analyst notes that Charter Communications, Inc. (NASDAQ:CHTR) reported a mixed quarter, with solid financials but weak subscribers.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Charter Communications, Inc. (NASDAQ: CHTR) was one of them. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter trailed after generating robust returns earlier in the recovery.”
8. UnitedHealth Group Incorporated (NYSE:UNH)
GQG Partners’ Stake Value: $1.4 billion
Performance of the stock over the past 12 months as of November 22: +17%
UnitedHealth Group Incorporated (NYSE:UNH) is a multinational healthcare and insurance company based in Minnetonka, Minnesota. One of the largest companies in the world based on revenue, it provides healthcare products, health care coverage, software, and data consultancy services.
Rajiv Jain’s GQG Partners currently holds over 3.6 million shares of UnitedHealth Group Incorporated (NYSE:UNH). These shares are valued at $1.4 billion and account for 3.87% of the investment firm’s portfolio.
On November 16, Deutsche Bank analyst George Hill raised his price target on UnitedHealth Group Incorporated (NYSE:UNH) to $477 from $421, and kept a Buy rating on the shares of the company after the quarterly filing release.
Out of the hedge funds being tracked by Insider Monkey, Boykin Curry’s Eagle Capital Management is one of the leading shareholders of UnitedHealth Group Incorporated (NYSE:UNH), with 3 million shares worth approximately $1.2 billion.
“UnitedHealth Group detracted from performance due to investor concerns about Medicare premiums as well as post-COVID medical cost trends. Medicare enrollment should continue to grow at double-digits at UnitedHealthcare. Meanwhile the Company’s Optum segment should be able to help bend the cost curve if indeed post-COVID volumes pick up to above pre-COVID levels. In any case, we do not think the long-term normalized trend of medical care in the U.S. has changed substantially and would look to add to our new position on any continuing short-term concerns.”
7. Exxon Mobil Corporation (NYSE:XOM)
GQG Partners’ Stake Value: $1.56 billion
Performance of the stock over the past 12 months as of November 22: +78%
Based in Irving, Texas, Exxon Mobil Corporation (NYSE:XOM) is one of the world’s largest multinational oil and gas companies that manufactures and transports crude oil, natural gas and petroleum products. Although the U.S Energy sector has posted strong gains year-to-date, Exxon Mobil Corporation (NYSE:XOM) seems to have lagged due to its late transition into the sector.
Rajiv Jain’s GQG Partners owns over 26.5 million shares in Exxon Mobil Corporation (NYSE:XOM), valued at $1.56 billion, making up 4.28% of the fund’s 13F portfolio. Of the 867 elite funds tracked by Insider Monkey, 64 reported holding stakes in the company by the end of the third quarter. Jean-Marie Eviellard of First Eagle Investment Management is among the leading shareholders in the company.
On October 21, Morgan Stanley analyst Devin McDermott kept an Overweight ratings on Exxon Mobil Corporation (NYSE:XOM), alongside an $84 price target on the company’s shares.
In its Q2 2021 investor letter, First Eagle Investment Management stated that Exxon Mobil Corporation (NYSE:XOM) was one of the leading contributors in the fund for the quarter. Here is what they said:
“Leading contributors in the First Eagle Global Fund this quarter included Exxon Mobil Corporation. The continued recovery in oil prices as economies reopen helped fuel another strong performance across the energy complex, including shares of Exxon Mobil. Exxon Mobil recently lost a proxy fight with an activist investor that took three of the company’s 12 board seats. While the press was focused on the investor’s concerns over Exxon Mobil’s long term energy transformation strategy, other factors fundamental to shareholder returns—like capital discipline and balance sheet management—were also at play.”
6. Microsoft Corporation (NASDAQ:MSFT)
GQG Partners’ Stake Value: $1.68 billion
Performance of the stock over the past 12 months as of November 22: -26%
One of the Big Five US Tech corporations, Microsoft Corporation (NASDAQ:MSFT) is a multinational firm based in Washington. Known for its computer software and operating systems, it recently became the most valuable publicly traded company in the world, with a market capitalization of $2.53 trillion at market close.
GQG Partners owns 5.97 million shares in Microsoft Corporation (NASDAQ:MSFT) as of the third quarter, worth $1.68 billion, representing 4.6% of the firm’s 13F portfolio.
Here is what Polen Global Growth has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:
“After modest Portfolio activity during the second quarter of 2021, activity increased during the third quarter. We would broadly characterize the various trades into two objectives: 1) managing risk, and 2) managing valuation. In both cases, we aimed to maintain the Portfolio’s growth profile. In aggregate, we believe we were able to increase expected earnings growth while reducing risk and the overall portfolio valuation… We also trimmed Microsoft, which had grown to nearly 10% of the Portfolio. At an 8% weighting, it still represents one of our largest positions.”
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