Guru investor Steven Cohen (Trades, Portfolio)’s trigger-happy investment style has made him billions, and it doesn’t appear that he’s about to switch modes.
Cohen, of Point72 Asset Management, established nearly 300 new positions in a portfolio valued at $23.9 billion in the early months of the year. The hedge fund manager is known for buying and selling out on the same stock, in a rapid-fire succession, in back-to-back quarters.
The first quarter was more of the same. Of his top five positions, four were approached in the style of his rapid-fire trades.
He unloaded shares in the final months of the year only to buy them back several months later. At least two of the companies have grown annual earnings in the double-digits over 10 years.
Cohen’s top buy was in the stock of an online travel agency, Booking Holdings Inc. (BKNG, Financial). Booking, considered the world’s largest online travel agency by revenue, operates a number of popular platforms, including Priceline.com, Booking.com, Agoda, OpenTable and Rentalcars.com.
Nvidia Corp. (NVDA, Financial), a designer of graphics chips for computing platforms, also caught his attention, drawing second-place among his top picks.
Pharmaceutical company Merck & Co. Inc. (MRK, Financial) filled the hedge fund manager’s third top spot.
Concho Resources Inc. (CXO, Financial), an independent oil and gas provider in the Permian Basin of West Texas, was another top buy.
Cohen also opened a position in PagSeguro Digital Ltd. (PAGS, Financial). The guru bought shares of the largest online payment platform in Brazil, which went public in January.
Total portfolio
The fund’s quarter-over-quarter turnover was 39%, a rate typical for the hedge fund manager. In previous years, the turnover rate has been as high as 50%.
The portfolio’s holdings are roughly invested in the following industries: 23% in consumer cyclical, 17% in health care, 13% in technology, 11.4% in industrials, 11% in energy, 8% in financial services, 5.2% in basic materials, 4.4% consumer defensive and 2.2% communication services.
The guru also made some notable real-time picks in the final weeks of April.
On April 23, Cohen disclosed a 0.01% increase to his Laureate Education Inc. (LAUR, Financial) stake. The company provides higher education programs and services to students through an international network of licensed universities. He currently holds 126 million shares for 58% ownership in the company.
Also, on April 13, Cohen disclosed he established a 5.1% stake in Roku Inc. (ROKU, Financial). Cohen owns 2.18 million shares of the California-based company, which went public last fall. In Friday trading, the stock dazzled, up 7% to just under $39 a share.Ă‚
Booking Holdings Inc.
GuruFocus tracks the holding history of gurus over the last five years. Based on that timeline, GuruFocus shows Cohen opened a position in 2012 when the stock was trading at $551 per share.
GuruFocus also shows he last sold out in the third quarter of 2017. In the first quarter of 2018, he purchased a total of 77,400 shares for an average price of $1,965 per share. It sits in 0.67% of the portfolio. The investment has reported an estimated gain of 8% to date.
The Peter Lynch chart suggests the stock is overpriced with a median closer to $750.
Shares rose 1.25% in Friday trading. The stock stood at more than $2,114 a share. The stock has jumped 77% over three years. It has a 52-week range of $1,630.56 to $2,228.99.
Analysts estimate the stock will reach $18.4 billion in revenue in 2020. That is up from $14 billion in 2018. In December 2017, Booking reported $12.7 billion in revenue after steady annual increases of $1 billion to $2 billion a year. It reported net income of $2.34 billion in 2017. EBITDA, or earnings before interest, taxes, depreciation and amortization, was reported at more than $5 billion.
It reported an average annual earnings growth of 35.40% over the last decade. It trades at 42 times its earnings and has a price-book ratio of 9.59 times and a price-sales ratio of 7.97 times. All three metrics are lower than at least 60% of peers in a universe of 640 companies in the Global Leisure Industry.
The company’s long-term debt has been growing and stands at $8.8 billion. The debt was reported at $1.7 billion in 2013. It has $4.3 billion in free cash flow.
It has a market cap of $101.8 billion and GuruFocus ranks it 6 out of 10 in financial strength and a 9 of 10 in profitability and growth.
Among the gurus who also hold the stock are Mario Gabelli (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio) and Wallace Weitz (Trades, Portfolio).
Nvidia Corp.
The stock is another that he has bought and sold on multiple occasions over the years. He bought, for example, in the first quarter of 2012, when it was trading around $14 a share.
In the first quarter, Cohen bought 448,457 shares of the company for an average price of $234.98 a share. The investment sits in about 0.43% of the portfolio. He has reported an estimated gain of 5% as a result of the first-quarter buy.
Nvidia was trading over $249 a share, up 0.76%, on Friday afternoon. In just 12 months, the value of the stock has soared by 76%. The stock’s 52-week range is $136.44 to $260.50 a share.
The company pays a small dividend of 0.24%, which is among the lowest in its sector.
Analysts are predicting revenues of over $16.9 billion in January 2021. The company reported total revenues of $9.7 billion in January. That compared to $7 billion in the prior year. Net income was $3 billion.
EBITDA stood at $3.45 billion in January. It reported average annual earnings growth of 24.60% over the last decade.
Nvidia trades at 41.60 times earnings. It has a price-book ratio of 19.63 times and a price-sales ratiio of 14.28 times. The ratios are lower than 80% of its sector peers.
The company has a market cap of $151 billion. GuruFocus ranks Nvidia 8 out of 10 in financial strength and 10 of 10 in profitability and growth.
Guru shareholders include David Tepper (Trades, Portfolio), George Soros (Trades, Portfolio), Gabelli and Ken Fisher (Trades, Portfolio).
Merck & Co. Inc.
GuruFocus metrics showed that Cohen was trading in the stock prior to 2012 as he was enhancing and reducing his position throughout the year. Back then, shares were trading for under $36 a share.
In the first quarter, a total 1.74 million shares of the biopharmaceutical company appeared in a portfolio space of 0.4%. The average price for the shares was $57 a share. The investment has reported an estimated gain of 4% since buying.
The pharmaceutical company is facing pricing pressures on its top-selling cholesterol drugs. It also saw sales decline because of a temporary shutdown after a cyber attack.
Merck was trading at $58.88 a share, down 0.42%, on Friday afternoon. Its 52-week range is $52.83 to $66.41 per share.
The stock has a dividend yield of 3.22%, which is among the highest of 85% of its sector peers.
Analysts are predicting earnings per share of $5.05 on revenue of $45.6 billion in 2020. The company reported $40 billion in revenues in December 2017. It saw revenues reach $48 billion in 2011 and has seen somewhat of a slight decline ever since. Net income stood at $2.39 billion in December 2017. The company’s operating margins have been inconsistent. In 2017, Merck reported 18.22% compared to 15.15% in 2016, compared to 19.11% in 2015.
It has $21 billion in long-term debt, a reduction from the prior year of $24 billion. It has a free cash flow of $4.55 billion. In 2016, free cash flow reached $8.76 billion.
Merck has a market cap of $158 billion. GuruFocus ranks both its financial strength and profitability and growth 6 out of 10.
Gurus who own the stock include Jeremy Grantham (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Robert Bruce (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Caxton Associates (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), John Buckingham (Trades, Portfolio), Mairs and Power, Charles Brandes (Trades, Portfolio), Gabelli and Joel Greenblatt (Trades, Portfolio).
Concho Resources Inc.
In 2012, shares of Concho stood at $97.41. Cohen had been trading shares prior to that year, GuruFocus indicates. But the new buy in the first quarter of 559,000 shares sits in about 0.35% of the portfolio. The average purchase price was $152.44 a share. The investment has reported an estimated loss of 8% to date.
Concho shares were down 2.14% on Friday afternoon. The share price was $139.20 a share. In three years, the stock has jumped 17%. The 52-week range is $106.74 to $163.11.
The stock is trading at 18.27 times earnings and 35.34 forward earnings. It has a price-book ratio of 2.14 times and a price-sales ratio of 7.06. The ratios are lower than more than 70% of peers in the same sector.
Analysts are predicting earnings per share of $9.63 on revenue of $6.66 billion in 2020. The energy company reported revenue of $2.6 billion in December 2017, up from $1.6 billion in the prior year. It reported a 20% operating margin after two consecutive years of negative margins of up to -17%.
The energy company reported earnings growth of 37% in the last 12 months. EBITDA reached $2.1 billion after a loss of $987 million in the prior year.
It reported long-term debt of $2.69 billion in December 2017, compared to $3.3 billion two years ago. In free cash flow, it reported a loss of $838 million, compared to over $1 billion in the prior year.
GuruFocus ranks the company 5 out of 10 in financial strength and 6 of 10 in profitability and growth.
Gurus who are shareholders include Stanley Druckenmiller (Trades, Portfolio), Jim Simons (Trades, Portfolio), Jones, Spiros Segalas (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio).
PagSeguro Digital Ltd.
Cohen bought 2.1 million shares, which sit in 0.34% portfolio space. He bought the shares for an average price of $32 a share. Since its initial public offering, GuruFocus estimates the stock has gained about 9%.
In Friday trading, the stock stood at $35.32, up 0.77%. The 52-week range is $26.78 to $39.97 a share.
The stock is trading at 89 times earnings and 17.86 times forward earnings. It has a price-book ratio of 35.60 times and a price-sales ratio of 12.28 times. The ratios are lower than the overwhelming majority of its same-sector peers.
Analysts are estimating earnings per share of $6.16 on revenues of $4.4 billion in 2020. Revenue in December was reported at more than $765 million. Net income was reported at $145 million. The figures are preliminary. It reported an operating margin of 31%.
Earnings growth was reported at 303% in the last 12 months.
Free cash flow as reported at $105 million and it reported a net issuance of debt of a negative $40 million.
PagSeguro Digital has a market cap of $13.6 billion. GuruFocus ranks it 7 out of 10 in financial strength and 6 of 10 in profitability and growth.
Other gurus who own the stock include Ron Baron (Trades, Portfolio), Bacon, Druckenmiller, Daniel Loeb and Steve Mandel (Trades, Portfolio).
