$5 Billion Hedge Fund Skye Global’s Top 15 Stock Picks
In this article, we will be taking a look at the $5 billion hedge fund Skye Global's top 15 stock picks. To skip our detailed analysis of the hedge fund Skye Global, you can go directly to see the $5 Billion Hedge Fund Skye Global's Top 5 Stock Picks.
Rarely does a 28-year-old succeed in raising $75 million to start a hedge fund and become one of the most successful money managers. That is the success story of Jamie Sterne, who has flexed his muscle in the highly competitive industry and made his name as one of the most revered hedge fund managers on Wall Street.
Before launching Skye Global Management in 2016, Sterne had previously worked in well-known funds, including Dan Loeb's iconic Third Point. Sterne would eventually use the equity research experience earned at the firm over a two-year period to propel Skye Global into one of the most followed hedge funds. The Harvard University graduate had also previously worked as a macroeconomic analyst at Greenmantle and as a long-short equity analyst at BeaconLight Capital.
By investing in exceptional businesses with a durable competitive edge and shorting stocks that were susceptible to the pandemic, Sterne generated a 34% gain in the first six months of 2020.
While managing about $1.5 billion, Sterne profited on betting against stocks as markets slumped amid fears over the economic damage caused by coronavirus as it was starting. In addition, Skye Global also ended up generating significant returns on betting on large internet and software stocks that exploded amid a technology-led rally.
The long/short hedge fund held positions in Microsoft, Amazon, Alphabet, and Facebook that rallied as the Federal Reserve cut interest rates to try and caution the economy amid the pandemic. Skye Global's impressive market performance stems from buying stocks whose cash flows may be understated because of future pricing power.
For the five years through 2021, Skye Global generated annualized returns of 50%. Nevertheless, 2022 has been challenging for Skye Global since its inception. The hedge fund was down by about 35% in the year's first half as the overall equity market remained under pressure. The Federal Reserve embarking on aggressive monetary policy tightening sent jitters in the markets, with the S&P 500 dropping 20% over the same period.
Skye Global Management's outlook on the overall stock market has improved significantly after the tumultuous 2022. The hedge fund recouped a significant chunk of the losses accrued in 2022 by rallying by about 21% in the first quarter as tech stocks exploded on the expectation that the Fed would start cutting interest rates at year's end. The hedge fund also gained 7.8% in the second quarter, keeping up with the bullish momentum in the market. The strong performance continued into the third quarter even as the overall market remained under pressure, with the S&P 500 pulling back by about 3.7%. Skye Global gained about 9.5% in the third quarter, bringing its year-to-date gains to 60.8%, better than the 17% gain of the S&P 500.
Photo by Adam Nowakowski on Unsplash
Our Methodology
After analyzing the hedge fund's 13F Fillings, we have settled on the top 15 stock holdings spanning multiple sectors.
Hedge Fund Skye Global Management’s Top 15 Stock Picks
15. Chipotle Mexican Grill Inc. (NYSE:CMG)
Skye Global Management’s Equity Stake: $19.23 million
Year-to-date gain: 62%
Number of Hedge Fund Investors in Q3 2023: 57
Chipotle Mexican Grill Inc. (NYSE:CMG) is a consumer chemical company that owns and operates restaurants across the US. The company offers burritos, bowls, quesadillas, tacos, and salads. It's been one of the best-performing stocks in Skye Global portfolio, going by the 62% year-to-date gain.
According to Insider Monkey’s third quarter database, 57 hedge funds were long Chipotle Mexican Grill Inc. (NYSE:CMG), compared to 55 funds in the earlier quarter. Bill Ackman’s Pershing Square is the largest stakeholder of the company, with 953,608 shares worth $1.75 billion.
14. General Electric Company (NYSE:GE)
Skye Global Management’s Equity Stake: $27.47 million
Year-to-date gain: 84%
Number of Hedge Fund Investors in Q3 2023: 76
General Electric Company (NYSE:GE) is one of Skye Global Management’s top stock picks in the Industrial segment. General Electric Company (NYSE:GE) makes and sells gas and steam turbines, software, and services for power, industry, and government. It also combines wind, blades, and grid solutions for its customers.
General Electric Company (NYSE:GE) is one of the companies that has benefited from a booming global economy that has fueled demand for its products and solutions. General Electric Company (NYSE:GE) is up by about 84% for the year and offers a 0.26% dividend yield, affirming why it is one of Jamie Sterne's top stock picks.
13. Shell Plc (NYSE:SHEL)
Skye Global Management’s Equity Stake: $30.39 million
Year-to-date gain: 18%
Number of Hedge Fund Investors in Q3 2023: 49
Shell Plc (NYSE:SHEL) is one of the top stock holdings in Skye Global Management, operating as an energy and petrochemical company. It operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. Shell Plc (NYSE:SHEL) explores for and extracts natural gas, crude oil, and natural gas liquids.
Shell Plc (NYSE:SHEL) is up by about 18%, outperforming the S&P 500, the company having benefited from high oil and gas prices for the better part of the year. Shell Plc (NYSE:SHEL) remains one of Jamie Sterne's top stock picks as it comes with a 4.05% dividend yield, ideal for generating passive income. Skye Global bolstered its stake in the company by 46% in Q3 2023 to 472,000 shares valued at $30.38 million, accounting for 0.88% of the portfolio.
12. The Procter & Gamble Company (NYSE:PG)
Skye Global Management’s Equity Stake: $40.55 million
Year-to-date gain: 1.3%
Number of Hedge Fund Investors in Q3 2023: 75
The Procter & Gamble Company (NYSE:PG) is a consumer defensive investment play in Jamie Sterne's portfolio, specializing in producing consumer packaged goods worldwide. The Procter & Gamble Company (NYSE:PG) operates through five segments: Beauty, Grooming, Health Care, Fabric and Home Care, and Baby, Feminine, and Family Care.
Skye Global increased its stake in the company by 42% in Q3 2023 to 278,000 shares valued at $40.55 million.
11. Thermo Fisher Scientific Inc. (NYSE:TMO)
Skye Global Management’s Equity Stake: $53.65 million
Year-to-date gain: -10%
Number of Hedge Fund Investors in Q3 2023: 109
Thermo Fisher Scientific Inc. (NYSE:TMO) is a healthcare company that provides life sciences solutions, analytics instruments, and laboratory products. Thermo Fisher Scientific Inc. (NYSE:TMO) also offers tools and services for labs, factories, and schools.
Thermo Fisher Scientific Inc. (NYSE:TMO) is down by about 10% for the year and is underperforming in Skye Global Portfolio. Nevertheless, the hedge fund increased its stakes in Thermo Fisher Scientific Inc. (NYSE:TMO) by 27% in Q3 2023 to 106,000 shares valued at $53.65 million. The diagnostics and research company also offers a 0.28% dividend yield.
10. Danaher Corporation (NYSE:DHR)
Skye Global Management’s Equity Stake: $56.69 million
Year-to-date gain: -6%
Number of Hedge Fund Investors in Q3 2023: 103
Danaher Corporation (NYSE:DHR) is a healthcare investment player in Skye Global Management's portfolio that designs manufactures and sells professional, medical, industrial, and commercial products. Danaher Corporation (NYSE:DHR)’s biotechnology segment offers bioprocess technologies, consumables, and services worldwide.
9. Kenvue, Inc. (NYSE:KVUE)
Skye Global Management’s Equity Stake: $77.75 million
Year-to-date gain: -20%
Number of Hedge Fund Investors in Q3 2023: 84
Kenvue, Inc. (NYSE:KVUE) is a consumer health company that operates through three segments: self care, skin health and beauty, and essential health. Kenvue, Inc. (NYSE:KVUE)’s self care segment offers cough, cold, allergy pain care, and digestive health treatment. The skin and beauty segment provides face and body care, hair care, and other beauty products.
Kenvue, Inc. (NYSE:KVUE) went public this year, is down by about 20% for the year, and comes with a 3.87% dividend yield. Skye Global Management increased its stakes by 34% in Q3 2023 to 3.87 million shares valued at $77.74 million.
Among the 910 hedge funds monitored by Insider Monkey, 84 of them held stakes in Kenvue, Inc. (NYSE:KVUE), up from 31 in the previous quarter.
8. Moody’s Corporation (NYSE:MCO)
Skye Global Management’s Equity Stake: $83.47 million
Year-to-date gain: 33%
Number of Hedge Fund Investors in Q3 2023: 58
Moody’s Corporation (NYSE:MCO) is a global financial services company that operates as an integrated risk assessment firm. Moody’s Corporation (NYSE:MCO) offers credit ratings and assessment services on various debt obligation programs, facilities, and entities.
Amid a booming economy and growing demand for credit rating services and risk management, Moody’s Corporation (NYSE:MCO) is up by about 33% annually, outperforming the S&P 500. Skye Global Management trimmed its stock exposure by 6% in Q3 2023 to 264,000 shares valued at $83.47 million, accounting for 2.41% of the portfolio.
Insider Monkey examined 910 hedge funds' investments in the September quarter of 2023 and discovered that 58 of them had invested in Moody's Corporation (NYSE: MCO). The most significant shareholder among them was Berkshire Hathaway, led by Warren Buffett, with a substantial $7.7 billion stake.
7. TransDigm Group Incorporated (NYSE:TDG)
Skye Global Management’s Equity Stake: $115.09 million
Year-to-date gain: 55%
Number of Hedge Fund Investors in Q3 2023: 67
TransDigm Group Incorporated (NYSE:TDG) is an industrial company that designs, produces, and supplies aircraft components. TransDigm Group Incorporated (NYSE:TDG) makes and sells parts and devices for engines, pumps, valves, power, motors, generators, batteries, and chargers.
As of September 2023, 67 hedge funds out of the 910 tracked by Insider Monkey included TransDigm Group Incorporated (NYSE:TDG) in their portfolios. Among these, AltaRock Partners, led by Mark Massey, emerged as the company's biggest shareholder, possessing 1.3 million shares valued at $1.10 billion.
6. Apple Inc. (NASDAQ:AAPL)
Skye Global Management’s Equity Stake: $115.39 million
Year-to-date gain: 48%
Number of Hedge Fund Investors in Q3 2023: 134
Apple Inc. (NASDAQ:AAPL) makes and sells phones, computers, tablets, and wearables. It also offers cloud services and app sales through the App Store. Apple Inc. (NASDAQ:AAPL) is also big in cloud computing, providing payment services through a cashless network.
Apple Inc. (NASDAQ:AAPL) remains one of Skye Global's top stock picks due to its record of generating value through buybacks and dividends. Apple Inc. (NASDAQ:AAPL) is up by 48% for the year and comes with a 0.50% dividend yield. Skye Global Management increased its exposure in the technology company by 1% in Q3 2023 to 674,000 shares valued at $115.39 million and accounting for 3.34% of the portfolio.
In the third quarter of 2023, 134 hedge funds out of the 910 monitored by Insider Monkey had shares in Apple Inc. (NASDAQ:AAPL). The largest investor among them is Warren Buffett's Berkshire Hathaway, holding a substantial $156 billion investment in the company.
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Disclosure: None. $5 Billion Hedge Fund Skye Global's Top 15 Stock Picks is originally published on Insider Monkey.
