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10 New Stocks for 2021: Qing Li’s Sciencast Management Portfolio

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·11 min read
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In this article, we will discuss the top 10 new stocks for 2021 to buy now according to Qing Li's Sciencast Management portfolio. If you want to skip our detailed analysis of Li’s history, investment philosophy, and hedge fund performance, go directly to the top 5 New Stocks for 2021: Qing Li's Sciencast Management Portfolio.

Qing Li, an alumnus of Columbia University, previously worked as a portfolio manager at SAC Capital Advisors LP from the year 2009 to 2014. Li started a private hedge fund company of his own, namely Sciencast Management Portfolio, in 2014. Qing Li’s Sciencast Management currently holds popular stocks in different sectors, including healthcare, IT, finance, consumer discretionary, consumer staples, transport, and telecommunication.

Sciencast's investment philosophy is based on the achievement of higher risk-adjusted returns by employing financial modeling and advanced statistical testing to identify persistent patterns from complicated data. Sciencast invests the fund's assets in the United States stock market, as well as foreign equities and other assets. Financial modeling entails the assessment of price and volume trends, researching event-driven phenomena, and investigating the microstructure of stock markets, among other things. Multiple signals are generated through distinct models, which span a wide spectrum of stock return forecasting features.

Some of Qing Li’s popular stock picks as of the second quarter of 2021 include Colgate-Palmolive Company (NYSE: CL), General Motors Company (NYSE: GM), and Cisco Systems, Inc. (NASDAQ: CSCO).

Based on the latest 13F holdings for the second quarter of 2021, Sciencast Management holds 55,326 shares in Colgate-Palmolive Company (NYSE: CL) worth over $4.5 million. Colgate-Palmolive Company (NYSE: CL) is an American multinational company headquartered in Midtown Manhattan, New York City. For the second quarter of 2021, Colgate-Palmolive Company (NYSE: CL) posted earnings per share of $0.80, meeting the analysts' estimate.

In General Motors Company (NYSE: GM), Qing Li has a stake worth over $3.7 million. The investment covers 0.78% of the fund's portfolio. General Motors Company (NYSE: GM) is an American automotive multinational organization headquartered in Michigan, United States. As of the second quarter of 2021, 86 hedge funds out of the 873 tracked by Insider Monkey maintained their stakes in General Motors Company (NYSE: GM). For Q2, 2021, General Motors Company (NYSE: GM) beat the analysts’ EPS estimate of $1.83 by $0.14.

Cisco Systems, Inc. (NASDAQ: CSCO) is another well-known stock held by Qing Li’s Sciencast Management. Cisco Systems, Inc. (NASDAQ: CSCO) is an American multinational corporation that provides services and products in five major technological areas, including networking, security, collaboration, data center, and the internet of things. The hedge fund owns 73837 shares in Cisco Systems, Inc. (NASDAQ: CSCO), worth $3.9 million. The investment covers 0.83% of the fund’s portfolio.

Source:unsplash

Our Methodology

For this article, we picked 10 new stocks from the second quarter portfolio of Qing Li's Sciencast Management. The fund initiated stakes in these companies in the second quarter.

Why should we pay attention to Sciencast's stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

10 New Stocks for 2021: Qing Li's Sciencast Management Portfolio

10. Microchip Technology Incorporated (NASDAQ:MCHP)

Li’s Stake Value: $4,333,000

Percentage of Qing Li’s 13F Portfolio: 0.9%

Number of Hedge Fund Holders: 50

Microchip Technology Inc., an American corporation, is involved in the development of connected and secure embedded control solutions for a variety of applications. Qing Li’s Sciencast management owns 30,098 shares in Microchip Technology Incorporated (NASDAQ: MCHP) worth over $4.33 million.

Out of the hedge funds being tracked by Insider Monkey, Australia-based Platinum Asset Management is a leading shareholder in Microchip Technology Incorporated (NASDAQ: MCHP), with around 1.86 million shares worth more than $279 million.

On October 3, investment advisory Wells Fargo downgraded Microchip Technology Incorporated (NASDAQ: MCHP) from an Overweight rating to Equal Weight with the price target of $165, citing valuation and regulatory concerns.

For the first quarter of the fiscal year 2022, the company beat the analysts’ estimated EPS of $1.91 by $0.07. Microchip saw an increase in hedge fund sentiment recently. Based on the data of the 873 funds tracked by Insider Monkey, the number of hedge fund positions in Microchip Technology Incorporated (NASDAQ: MCHP) increased from 42 in the first quarter of 2021 to 50 at the end of the second quarter.

9. Boston Scientific Corporation (NYSE:BSX)

Li’s Stake Value: $4,351,000

Percentage of Qing Li’s 13F Portfolio: 0.91%

Number of Hedge Fund Holders: 51

Boston Scientific is an American corporation that manufactures and distributes medical devices to meet the needs of the global healthcare system. It was founded by Peter Nicholas and John Abele in 1979. According to the latest data, Qing Li’s Sciencast Management owned 99,870 shares in Boston Scientific Corporation (NYSE: BSX) at the end of the second quarter of 2021, worth over $4.35 million.

As of the second quarter of 2021, the company recorded year-on-year revenue growth of 10.23% and beat analysts’ estimated EPS of $0.37 by $0.03. Viking Global is the leading investor in Boston Scientific Corporation (NYSE: BSX), with around 13 million shares worth over $569 million.

In May, investment advisory Needham downgraded Boston Scientific Corporation (NYSE: BSX) to Hold from Buy, stating that the estimates for the company’s performance were too high and downward revisions were due.

Based on the data of the 873 funds tracked by Insider Monkey, the number of hedge fund positions in Boston Scientific Corporation (NYSE: BSX) increased from 44 to 51 at the end of the second quarter of 2021. Recently, Boston Scientific also announced its plans to invest €30 million to facilitate the development and production of minimally invasive medical technologies that could assist in treating patients with chronic diseases like cancer and peripheral arterial diseases.

Artisan Partners, an investment management firm, mentioned Boston Scientific Corporation (NYSE: BSX) in its Q2 2021 investor letter. Here’s what the fund said:

“Among our top contributors (includes) Boston Scientific. Shares of Boston Scientific were volatile throughout most of 2020 as the pandemic drove significant drops in elective medical procedures, though our longer-term constructive view and belief elective medical procedures would bounce back post pandemic prompted us to add to our position. We have been rewarded with shares rebounding this year alongside a recovery in elective medical procedures. Longer-term, we believe the company’s investments in higher growth categories will drive revenue growth to the higher end of its peer group with rising margins.”

Besides Boston Scientific Corporation (NYSE: BSX), Colgate-Palmolive Company (NYSE: CL), General Motors Company (NYSE: GM), and Cisco Systems, Inc. (NASDAQ: CSCO) are some of the notable stocks in Qing Li's Sciencast's Management portfolio as of the second quarter of 2021.

8. Oracle Corporation (NYSE:ORCL)

Li’s Stake Value: $4,442,000

Percentage of Qing Li’s 13F Portfolio: 0.93%

Number of Hedge Fund Holders: 55

Oracle Corporation (NYSE: ORCL) is a Texas-based multinational company known for its cloud applications, software products, and database services. Qing Li’s Sciencast management holds 50,370 shares in Oracle Corporation (NYSE: ORCL) that amount to over $4.4 million.

Out of the hedge funds being tracked by Insider Monkey, First Eagle Investment Management is a leading shareholder in Oracle Corporation (NYSE: ORCL), with around 26 million shares worth more than $2 billion.

On September 14, investment advisory Monness Crespi raised the price target on the company from $113 to $115 and maintained a Buy rating. The company recorded EPS of $1.03 for Q1 2022, beating the analysts’ estimate of $0.97.

At the end of the second quarter of 2021, 55 hedge funds in Insider Monkey’s database held stakes worth $2.889 billion in Oracle Corporation (NYSE: ORCL), up from 52 in the preceding quarter. Moreover, on September 27, a collaboration between Oracle and Telefonica was announced, which will result in an accelerated adoption of cloud by the telecommunications company. Oracle intends to provide a secure, massively scalable platform based on Oracle Cloud Infrastructure (OCI) that will enable Telefonica to consolidate data across its operational processes and expedite the development and delivery of new services.

Ariel Investments shared its stance on Oracle in its Q2 2021 investor letter. Here’s what the investment management firm said:

“Oracle Corp. (ORCL) is our largest holding and was our third largest contributor in the quarter, increasing +11.41%. Oracle changed its revenue accounting several years ago moving to an annual licensing fee for most of its software products. This smoothed the company’s earnings over time but did have the effect of reducing near-term revenue growth and lowering its P/E multiple. In our opinion, Oracle has never gotten the respect it deserves as a $40 billion cloud computing and software company. It has consistently traded at multiples well below that of cloud/ software competitors such as Microsoft. We track sell-side ratings as a gauge of whether a stock is in or out of favor. Oracle currently has an average rating of 1.89, meaning there are far fewer buy recommendations than hold ratings. In our opinion, the analyst community hostility to Oracle’s founder, Larry Ellison, has been a consistent headwind to the stock’s valuation.”

Just like Oracle Corporation (NYSE: ORCL), Colgate-Palmolive Company (NYSE: CL), General Motors Company (NYSE: GM), and Cisco Systems, Inc. (NASDAQ: CSCO) are some of the popular stocks in Qing Li's Sciencast Management portfolio as of the second quarter of 2021.

7. Delta Airlines, Inc. (NYSE:DAL)

Li’s Stake Value: $4,509,000

Percentage of Qing Li’s 13F Portfolio: 0.94%

Number of Hedge Fund Holders: 49

Delta Air Lines, Inc. (NYSE: DAL) is a US-based airline that facilitates domestic and international travel to approximately 300 destinations and 60 countries around the globe. Qing Li’s Sciencast management holds 105,011 shares in Delta Air Lines, Inc. that amount to over $4.50 million and 0.94% of the 13F portfolio. Crake Asset Management is the top investor in Delta Air Lines, Inc., with a stake worth $24.1 billion.

On September 23, investment advisory Argus downgraded Delta Air Lines, Inc. (NYSE: DAL) to Hold from Buy, stating that the company’s last reported results did not factor in the impact of Covid-19 on flight demand.

The company posted EPS of -$1.07 for the second quarter of 2021, beating the analysts' estimate by $0.32.

Based on the data of the 873 funds tracked, the number of hedge fund positions in Delta Air Lines, Inc. (NYSE: DAL) decreased to 49 at the end of the second quarter of 2021 compared to 50 positions in the first quarter. Besides this, Delta Airlines, Inc. (NYSE: DAL) was recently applauded for moving towards more sustainable means of travel by buying sustainable aviation fuel from Aemetis in a decade-long deal worth $1 billion.

Apart from Delta Air Lines, Inc. (NYSE: DAL), Colgate-Palmolive Company (NYSE: CL), General Motors Company (NYSE: GM), and Cisco Systems, Inc. (NASDAQ: CSCO) are some of the notable stocks in Qing Li's portfolio as of the second quarter of 2021.

6. The Coca-Cola Company (NYSE:KO)

Li’s Stake Value: $4,543,000

Percentage of Qing Li’s 13F Portfolio: 0.95%

Number of Hedge Fund Holders: 62

Coca-Cola is an American beverage company that manufactures, retails, and markets nonalcoholic beverage concentrates and syrups, as well as alcoholic drinks. The Coca-Cola Company (NYSE: KO) was founded by Asa Griggs Candler in 1892. According to the latest 13F filings, Qing Li’s Sciencast management owns 83,688 shares in The Coca-Cola Company (NYSE: KO) worth over $4.54 million as of the second quarter of 2021.

On September 22, Deutsche Bank maintained a Hold rating on The Coca-Cola Company (NYSE: KO) and raised the price target from $58 to $60 due to the strong Q2 results of the company. The company also beat the analysts’ EPS estimate of $0.56 for Q2 2021 by $0.12.

As of the second quarter of 2021, 62 hedge funds out of the 873 tracked by Insider Monkey held stakes worth $24.96 billion in The Coca-Cola Company (NYSE: KO), up from 61 funds in the preceding quarter. Moreover, Coca-Cola Company (NYSE: KO) recently partnered with a UK-based e-sports company, GFinity, to host a tournament in October 2021 to promote e-sports.

In addition to The Coca-Cola Company (NYSE: KO), Colgate-Palmolive Company (NYSE: CL), General Motors Company (NYSE: GM), and Cisco Systems, Inc. (NASDAQ: CSCO) are some of the notable stocks in Sciencast Management portfolio as of the second quarter of 2021.

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Disclosure: None. 10 New Stocks for 2021: Qing Li's Sciencast Management Portfolio is originally published on Insider Monkey.