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Paul Tudor Jones Is Expecting A Bear Market, Yet Buying These Stocks

Nina Zdinjak

Billionaire Paul Tudor Jones runs a $7 billion hedge fund, called Tudor Investment Corp. The fund has been fighting for years to bring the profits to its investors, and the current year is bringing a little bit of optimism, as it has gained 9% through October. In this article, we’ll take a look at Paul Tudor Jones’ top stock pick in the third quarter.

Before we proceed with the most important new holdings in Tudor Investment Corp’s equity portfolio, let’s take a look at what he said about the US tax cuts at the recent Greenwich Economic Forum in Greenwich, Connecticut. Jones holds the opinion that US tax cuts may cause the bubble in credit to pop. He predicted that We’re going to stress test our whole corporate credit market for the first time.” Let’s remind you that, although Jones’ hedge fund hadn’t had luck with its performance in recent years, Jones has been right with his forecasts, as he had predicted “Black Monday” stock market crash back in 1987. Hence, when it comes to corporate credit we can probably expect some tough times.

TUDOR INVESTMENT CORP

According to Jones, thanks to zero and negative interest rates, there has been too much lending, and current levels of leverage may be alarming. Credit markets have been affected by various factors such as trade wars, oil prices, etc. with global high yield bonds being hit the most, going through its worst period since the market crash in 2008. Jones said that stocks, bonds, currencies and real estate are all overpriced, and that “the next trade will be a "front-end rates trade” of figuring out when policy makers will cease interest rate hikes.”

Let’s take a look at what Jones thought were the safest bets, what are his top stock pick for the third quarter 2018.

1. Hanger Inc (NYSE:HNGR)

The most valuable new position the fund added to its equity portfolio was in Hanger Inc (NYSE:HNGR) whose 916,840 shares worth $19.10 million it acquired during the Q3. Hanger Inc (NYSE:HNGR) is a company that provides orthotic and prosthetic patient care, offering a plethora of special professional services to people in need of orthotic. Although the company is not among the most popular stocks in the third quarter (check out the list of 30 most popular stocks among hedge funds now), the number of bullish investors has gone up to 17 investors, from one in the second quarter. Year to date, the company’s stock is up by 22%.

2. Alteryx Inc (NYSE:AYX)

The fund purchased 234,511 Alteryx’ shares, that were valued $13.42 million on September 30. Alteryx Inc (NYSE:AYX) is a software company that offers a professional platform for data science and self-service analytics.  The company has attracted more investors from Insider Monkey’s database, with 26 hedge funds long the stock, versus 18 in the previous quarter. Over the past six months, the company gained 89.82%.

[caption id="attachment_568105" align="aligncenter" width="750"] one photo/Shutterstock.com[/caption]

one photo/Shutterstock.com

3. Tapestry Inc (NYSE:TPR)

In Tapestry Inc (NYSE: TPR) the fund established a position that was worth $10.68 million at the end of the third quarter, and counted 212,360 shares. This is a New York City-based luxury fashion holding company. It is a parent company of big brands such as  Stuart Weitzman and Kate Spade New York. Over the last 5 years, the company’s stock price lost 22.54%. Tapestry Inc (NYSE:TPR) is also seeing an increased interest from smart money investors from our database, as the number of long positions in it increased by eight to 33 investors.

[caption id="attachment_573438" align="aligncenter" width="750"] Creative Lab/Shutterstock.com[/caption]

Creative Lab/Shutterstock.com

4. Tiffany & Co. (NYSE:TIF)

Tudor Investment Corp acquired 78,629 outstanding shares of Tiffany & Co. (NYSE: TIF), in that manner, establishing a position that was worth 10.14 million on September 30. Tiffany & Co. is a renowned American luxury jewelry retailer with its headquarters in the Big Apple. Aside from jewelry, the company also sells fragrances, personal accessories, some leather goods, and similar luxury style products. Over the past 12 months, the company gained 14%. The number of hedge funds from our table bullish on this stock remained the same as in the previous quarter, with 43 investors long it on September 30.

[caption id="attachment_361510" align="aligncenter" width="750"] 186PIX/Shutterstock.com[/caption]

Best Jewelry Stores in the World

5. Monster Beverage Corp (NASDAQ:MNST)

The fund thought of Monster Beverage Corp (NASDAQ:MNST) as a good investment opportunity, hence it purchased its 102,180 shares worth $5.96 million during the third quarter. Monster Beverage Corporation is a world known beverage company that produces various popular energy drinks, such as Monster Energy and Burn. Hedge funds from Insider Monkey’s system are becoming more bullish on it with 32 investors long the stock on September 30, up by 5 from the previous quarter. Year to date, the company is down by 11.81%.

Disclosure: None. This article is originally published at Insider Monkey.

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