This article discusses the top 10 stock picks of Thomas Bailard’s hedge fund Bailard Inc at the end of the first quarter. If you are interested in knowing only about Bailard Inc’s top five picks, you can check them here: 5 Best Stocks to Buy According to Thomas Bailard’s Hedge Fund.
Founded in 1969 by three Stanford graduates Thomas Bailard, Larry Biehl & Ron Kaiser, Bailard Inc is among the oldest institutional money managers in the United States. The firm initially made money by publishing the first of six editions of 'Personal Money Management', a college textbook still widely used. In 1979, Bailard Inc launched one of the first international equity mutual funds in the US, and in 1990 the firm launched its commercial real estate fund for institutions and high-net-worth individuals.
The firm gets its name from one of the founders Thomas Bailard, who authored the books published by the firm in its formative years. Unfortunately, Mr. Bailard passed away in 2017. Currently, Bailard Inc manages assets worth $5.6 billion and has 68 employees. Out of those 68 employees, 41 are professional staff members with an average experience of 15 years working at Bailard Inc.
Bailard Inc’s Portfolio
For the quarter ending June 30, the value of all holdings reported by Bailard Inc in its 13F filing was $2.54 billion, a decline from $2.974 that the firm reported in the previous quarter. During the second quarter, Bailard Inc reduced its holding in 232 securities and initiated a position in 132 securities. Its top 10 holdings accounted for 31.88% of the value of its 13F portfolio. Bailard Inc’s top stock picks included names like UnitedHealth Group Inc. (NYSE:UNH), Visa Inc. (NYSE:V), and Microsoft Corporation (NASDAQ:MSFT).
Insider Monkey tracks the portfolios of over 900 hedge funds. The stocks selected for this article were chosen from the 13F filing Baird Inc filed for the second quarter of 2022.
Best Stocks to Buy According to Thomas Bailard’s Hedge Fund
10. QUALCOMM Incorporated (NASDAQ:QCOM)
Bailard Inc’s Stake Value: $18,740,000
Percentage of Bailard Inc’s 13F Portfolio: 0.73%
Number of Hedge Fund Holders (Q1): 73
Bailard Inc increased its stake in semiconductor giant QUALCOMM Incorporated (NASDAQ:QCOM) by 20% to 146,708 shares during the second quarter. In the previous quarter, 73 hedge funds tracked by Insider Monkey reported a stake in QUALCOMM Incorporated (NASDAQ:QCOM), down from 76 at the end of 2021.
Out of 24 analysts covering QUALCOMM Incorporated’s (NASDAQ:QCOM) stock on Wall Street, most of them are moderately bullish on the stock. On July 28, Canaccord Genuity Group’s analyst T. Michael Walkley published a note in which he reiterated his ‘Buy’ rating on QUALCOMM Incorporated’s (NASDAQ:QCOM) stock but lowered his price target on it to $225 from $250.
9. The Home Depot, Inc. (NYSE:HD)
Bailard Inc’s Stake Value: $20,640,000
Percentage of Bailard Inc’s 13F Portfolio: 0.81%
Number of Hedge Fund Holders (Q1): 75
Home improvement retailing giant The Home Depot, Inc.’s (NYSE:HD) stock might be trading down by more than 25% from its lifetime high of $420.61 last year, but it is still up 472% over the previous ten years.
Morgan Stanley’s analyst Simeon Gutman published a report on July 20 where he cautioned investors about slowdown in discretionary sectors, especially durable goods and retailers who primarily serve customers from the lower-income group. Mr Gutman noted:
“Inflation is running well above our expectations entering the year, and it’s outpacing disposable income growth. The result is a higher proportion of consumers’ incomes is being spent on necessities like food (which is seeing 10%+ inflation) and rent, while dollars are being pulled away from discretionary purchasing.”
In his report, Mr. Gutman lowered his price target on The Home Depot, Inc.’s (NYSE:HD) stock to $350 from $365 while maintaining his ‘Overweight’ rating.
8. The Procter & Gamble Company (NYSE:PG)
Bailard Inc’s Stake Value: $23,045,000
Percentage of Bailard Inc’s 13F Portfolio: 0.9%
Number of Hedge Fund Holders (Q1): 72
At the end of March this year, 72 hedge funds we track reported a stake in The Procter & Gamble Company (NYSE:PG), and the aggregate value of their holdings in the company was worth $6.064 billion. Though the number of funds we track that revealed holding The Procter & Gamble Company’s (NYSE:PG) stock was only 67 at the end of 2021, the aggregate value of their stakes was over $6.6 billion.
On July 29, During an interview with CNBC after the company’s second-quarter earnings release, The Procter & Gamble Company’s (NYSE:PG) CEO Jon Moeller said “the headwinds are real” when asked about inflation. He also said that though the company is facing difficulties operating in China, Russia and Ukraine, the United States is not in a recession, and the demand for The Procter & Gamble Company’s (NYSE:PG) products remain strong in most geographies.
7. Johnson & Johnson (NYSE:JNJ)
Bailard Inc’s Stake Value: $23,394,000
Percentage of Bailard Inc’s 13F Portfolio: 0.92%
Number of Hedge Fund Holders (Q1): 83
Bailard Inc first reported holding a stake in Johnson & Johnson (NYSE:JNJ) more than 22 years ago during the first quarter of 2001. Although the stock remained rangebound primarily in the next 11 years, it has appreciated by almost 175% in the last 10 years.
On August 1, Johnson & Johnson’s (NYSE:JNJ) Janssen unit announced that the FDA had approved a label expansion for its STELARA subcutaneous injection, which can now be given to children aged six years and older who suffer from active psoriatic arthritis (PsA).
STELARA is also known by the name ‘ustekinumab’. The injection added $19.1 billion to Johnson & Johnson’s (NYSE:JNJ) sales during the financial year 2021, showing year-over-year growth of 19%.
6. Amazon.com, Inc. (NASDAQ:AMZN)
Bailard Inc’s Stake Value: $27,478,000
Percentage of Bailard Inc’s 13F Portfolio: 1.08%
Number of Hedge Fund Holders (Q1): 271
Amazon.com, Inc. (NASDAQ:AMZN) has been the most popular stock at the end of the first quarter among the 912 hedge funds Insider Monkey covers. Held by 271 hedge funds in that period, the aggregate value of their holdings in the company amounted to more than $48 billion.
During the second quarter Bailard Inc became increasingly bullish on Amazon.com, Inc. (NASDAQ:AMZN), upping its stake in the company’s stock by 1,877% to 258,712 shares.
On July 29, analysts at Cowen boosted their price target on the stock to $215 from $210 while maintaining their ‘Outperform’ rating.
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Disclosure: None. 10 Best Stocks to Buy According to Thomas Bailard’s Hedge Fund is originally published on Insider Monkey.