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10 Stocks to Buy Now According to James Katz’s Humankind Investments

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·11 min read
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In this article, we discuss 10 stocks to buy now according to James Katz's Humankind Investments. If you want to skip our detailed analysis of Katz's history, investment philosophy, and hedge fund performance, go directly to 5 Stocks to Buy Now According to James Katz's Humankind Investments.

James Katz is a socially conscious investor, as well as a seasoned quantitative equities analyst and data scientist. He earned a Ph.D. in Business Administration from Stanford University's Graduate School of Business, a BA in Psychology and PPE (Philosophy, Politics, and Economics), and a BAS in Computer Science from Pennsylvania. Katz is also a CFA charterholder. Before starting Humankind Investments, he worked as a quantitative equities analyst and data scientist for Vanguard in the ETF sector. To offer a more scientific and metrics-based approach to the area, he formed Humankind Investments in 2019.

Humankind Investments, located in New York, is a statistically driven and socially responsible hedge fund. The hedge fund launched its first exchange traded fund (ETF), the Humankind US Stock ETF (NYSE:HKND). The fund tracks the top 1,000 US firms that promote healthier, safer, more egalitarian, and longer lives using the firm's unique Humankind US Equity Index. Humankind US Stock ETF has raised nearly $100 million in investment capital since its inception.

Katz and his team have more than 50 years of combined expertise, including positions at prominent asset management firms and academic institutions. James Katz's Humankind Investments had a $248.20 million asset portfolio in the fourth quarter of 2021, up from $219.86 million a quarter earlier. It presently includes stakes in various sectors, including communication, finance, healthcare, industrials, information technology, consumer discretionary, consumer staples, materials and utilities, and telecommunications. The hedge fund's 13F portfolio includes notable stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and General Electric Company (NYSE:GE).

In Apple Inc. (NASDAQ:AAPL), James Katz owns 79,013 shares. The stock has gained 18.66% over the past year as of April 25. On April 21, Wells Fargo analyst Aaron Rakers initiated coverage of Apple Inc. (NASDAQ:AAPL). He rated the stock as "Overweight" and set the price target at $205.

10 Stocks to Buy Now According to James Katz's Humankind Investments
10 Stocks to Buy Now According to James Katz's Humankind Investments

Photo by Austin Distel on Unsplash

Another notable stock in James Katz’s portfolio is Microsoft Corporation (NASDAQ:MSFT). The investor owns an $11.74 million stake in the company. On April 22, Microsoft Corporation (NASDAQ:MSFT)’s Xbox Series X/S sold 13.87 million copies in its first 17 months of availability, according to VGChartz's William D'Angelo, a lead video game analyst and journalist.

James Katz's Humankind Investments also owns 19,507 shares of General Electric Company (NYSE:GE). On April 14, Deutsche Bank analyst Nicole DeBlase boosted her price objective on General Electric Company (NYSE:GE) from $107 to $118 and maintained a Buy rating.

Our Methodology

With this economic outlook in mind, let’s start our list of 10 stocks to buy now according to James Katz's Humankind Investments. We used Katz's 13F portfolio for Q4 2021 for this analysis.

The number of hedge funds that hold shares in each company was calculated using data from Insider Monkey's nearly 900 elite hedge funds tracked in Q4 2021.

Stocks to Buy Now According to James Katz's Humankind Investments

10. Bunge Limited (NYSE:BG)

Humankind Investments’ Stake Value: $2,151,000

Percentage of Humankind Investments’ 13F Portfolio: 0.86%

Number of Hedge Fund Holders: 38

Bunge Limited (NYSE:BG) is a holding corporation that specializes in agricultural commodity supply and transportation. Bunge Limited (NYSE:BG)'s four segments are agribusiness, refined and specialty oils, milling, and sugar and bioenergy.

As part of a comprehensive research note on Chemicals, BofA analyst Steve Byrne downgraded Bunge Limited (NYSE:BG) from Buy to Neutral with a price target of $134, up from $120. As a result of the current spike in soybean meal and oil prices owing to droughts and Russia's invasion, the analyst predicts a minor drop in soybean crush margins over the next four years.

According to Insider Monkey’s Q4 database, 38 hedge funds held long positions in Bunge Limited (NYSE:BG), up from 37 funds in the prior quarter. Candlestick Capital Management is the leading Bunge Limited (NYSE:BG) stakeholder, with 1.03 million shares worth over $95.69 million.

Along with Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and General Electric Company (NYSE:GE), Bunge Limited (NYSE:BG) is one of the stocks to buy now according to James Katz's Humankind Investments.

9. Pfizer Inc. (NYSE:PFE)

Humankind Investments’ Stake Value: $2,257,000

Percentage of Humankind Investments’ 13F Portfolio: 0.9%

Number of Hedge Fund Holders: 83

Pfizer Inc. (NYSE:PFE) is a pharmaceutical company established in the United States, producing vaccines, drugs, and consumer health products for patients all over the world. Pfizer Inc. (NYSE:PFE) has inked cooperation agreements with Bristol-Myers Squibb, BioNTech SE, Myovant Sciences Ltd., Akcea Therapeutics, Inc., Astellas Pharma US, Inc., Merck KGaA, Valneva SE, and Arvinas, Inc.

On April 7, Pfizer Inc. (NYSE:PFE) and ReViral announced that they signed a formal agreement in which Pfizer would buy ReViral for up to $525 million. ReViral is a clinical-stage biopharmaceutical business focused on researching, developing, and commercializing innovative respiratory syncytial virus antiviral medicines. Pfizer Inc. (NYSE:PFE) was identified in the public 13F portfolios of 83 hedge funds in the fourth quarter of 2021, up from 74 funds in the third quarter, according to Insider Monkey data.

Terence Flynn, a Morgan Stanley analyst, initiated coverage of Pfizer Inc. (NYSE:PFE) on April 6, maintaining an Equal Weight rating and a price target of $55. In the fourth quarter, James Katz loaded up on Pfizer Inc. (NYSE:PFE), increasing his position in the company by 7%. Humankind Investments owns 38,219 shares of the company, worth $2.26 million.

ClearBridge Investments discussed its stance on Pfizer Inc. (NYSE:PFE) in its Q4 2021 investor letter. Here’s what the firm said:

“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.

What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.

8. Johnson & Johnson (NYSE:JNJ)

Humankind Investments’ Stake Value: $2,278,000

Percentage of Humankind Investments’ 13F Portfolio: 0.91%

Number of Hedge Fund Holders: 83

Johnson & Johnson (NYSE:JNJ) is a global healthcare company that investigates, develops, produces, and distributes a variety of goods. Consumer health, pharmaceuticals, and medical devices are the three categories it operates in. On April 20, Credit Suisse analyst Matt Miksic maintained an Outperform rating on Johnson & Johnson (NYSE:JNJ), and raised his price objective to $205 from $200. According to Insider Monkey's Q4 statistics, 83 hedge funds owned Johnson & Johnson (NYSE:JNJ) shares, down from 88 in the previous quarter.

On April 21, Legend Biotech Corporation (NASDAQ:LEGN) received a $50 million advance payment from Janssen Biotech, a part of Johnson & Johnson (NYSE:JNJ), for the CAR-T treatment cilta-cel, which is commercialized in the US under the brand name Carvykti.

As part of its Q4 2021 investments, James Katz's hedge fund held 13,318 Johnson & Johnson (NYSE:JNJ) shares worth $2.28 million, representing 0.91% of its 13F portfolio. Humankind Investments increased its stake in Johnson & Johnson (NYSE:JNJ) by 23% in the fourth quarter of 2021.

7. Corteva, Inc. (NYSE:CTVA)

Humankind Investments’ Stake Value: $3,529,000

Percentage of Humankind Investments’ 13F Portfolio: 1.42%

Number of Hedge Fund Holders: 42

Corteva, Inc. (NYSE:CTVA) is a global seed and crop protection company that focuses on the agriculture business and helps to ensure food security. Seed and Crop Protection are the two segments in which the company works. Pacific Biosciences of California, Inc. (NASDAQ:PACB) and Corteva, Inc. (NYSE:CTVA) Agriscience signed an agreement on April 4 to build unique, end-to-end processes for plant, pest, and microbiological sequencing.

Loop Capital analyst Christopher Kapsch upgraded Corteva, Inc. (NYSE:CTVA) from Hold to Buy on April 14 and assigned a $69 price target. In the fourth quarter of 2021, 42 hedge funds monitored by Insider Monkey were bullish on Corteva, Inc. (NYSE:CTVA), up from 41 funds in the previous quarter.

On the other hand, James Katz disclosed a decreased stake in Corteva, Inc. (NYSE:CTVA) by 3%. This leaves the investment value at $3.53 million and 74,649 shares. Among the hedge funds tracked by Insider Monkey, Starboard Value LP is the leading shareholder of Corteva, Inc. (NYSE:CTVA), with 8.90 million shares worth more than $420.82 million.

Here is what Rhizome Partners has to say about Corteva, Inc. (NYSE:CTVA) in its Q1 2021 investor letter:

“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as Corteva. We do understand the market’s rationale. For example, Corteva operates in a duopoly with Monsanto, owned by Bayer AG, that provides genetically modified seeds and pesticides. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”

6. Alphabet Inc. (NASDAQ:GOOG)

Humankind Investments’ Stake Value: $4,227,000

Percentage of Humankind Investments’ 13F Portfolio: 1.7%

Number of Hedge Fund Holders: 158

Alphabet Inc. (NASDAQ:GOOG) offers a variety of goods and platforms throughout the United States, Canada, the Middle East, Africa, Europe, Asia-Pacific, and Latin America. Hedge funds are investing billions into Alphabet Inc. (NASDAQ:GOOG). In Q4 2021, 158 hedge funds monitored by Insider Monkey were long Alphabet Inc. (NASDAQ:GOOG), up from 156 funds the quarter earlier.

According to the 13F filings for the fourth quarter of 2021, Humankind Investments held 1,459 shares of Alphabet Inc. (NASDAQ:GOOG), amounting to $4.23 million and representing 1.7% of the fund’s portfolio. Alphabet Inc. (NASDAQ:GOOG) has featured on the hedge fund’s portfolio since the fourth quarter of 2020.

On April 21, Credit Suisse analyst Stephen Ju cut his price objective on Alphabet Inc. (NASDAQ:GOOG) to $3,450 from $3,500, while maintaining an Outperform rating on the stock. Given the ongoing IDFA issues, the analyst proceeded to gather advertiser feedback, recommending larger spending allocation across Google properties.

Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and General Electric Company (NYSE:GE), Alphabet Inc. (NASDAQ:GOOG) is one of the stocks gaining the attention of James Katz's Humankind Investments.

ClearBridge Investments, an investment firm, mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter. Here is what the fund said:

“Additionally, we added to our position in Alphabet (NASDAQ:GOOG), whose valuation we found attractive amid the market selloff early in the quarter, particularly given its dominant position in search, its scaling opportunities in cloud services, and its relative insulation from Apple (NASDAQ:AAPL)’s privacy initiatives, which do not affect Alphabet’s core search business the way they do other large tech platforms.”

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Disclosure: None. 10 Stocks to Buy Now According to James Katz's Humankind Investments is originally published on Insider Monkey.