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Top 10 Stock Picks of Benjamin Smith’s Laurion Capital Management

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In this article, we discuss the top 10 stock picks of Benjamin Smith's Laurion Capital Management. If you want to skip our detailed analysis of Smith's history, investment philosophy, and hedge fund performance, go directly to Top 5 Stock Picks of Benjamin Smith's Laurion Capital Management.

Serving as its partner, Benjamin A. Smith is the co-founder of the New York-based investment management firm, Laurion Capital Management. A magna cum laude graduate from Harvard University in 1993 with a B.A. in Economics, Benjamin Smith has been immersed in the global markets for nearly three decades. Prior to establishing Laurion Capital Management in 2005 alongside co-founder Sheehan Maduraperuma, Smith was a managing director at JPMorgan where he spent eleven years in the Equity Derivatives group. During his last three years at the firm, he organized a nine-person proprietary trading team focused on quantitative equity arbitrage and volatility investing. In the preceding years, Smith ran the United States Structured Options Trading team, covering a wide range of products, including listed, over-the-counter, and exotic options for proprietary businesses.

Based on the 13F filings for the third quarter of 2021, Laurion Capital Management's portfolio is diversified across 13 sectors, with the healthcare sector proving to be the heaviest, making up 15% of the fund's portfolio value. A majority of the companies in the fund’s portfolio are large-cap stocks, with stocks scaling up to more than $10 billion in market capitalization making up 35% of the value of the total holding.

Some of the top stocks in the investment portfolio of Laurion Capital Management at the end of the third quarter of 2021 include Alibaba Group Holding Limited (NYSE:BABA), Alphabet Inc. (NASDAQ:GOOG), and PG&E Corporation (NYSE:PCG), among others.

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Our Methodology

With this background in mind, let us now look towards the top 10 stock picks of Benjamin Smith's Laurion Capital Management. We made use of Laurion Capital Management's 13F portfolio for the third quarter for this analysis.

Top 10 Stock Picks of Benjamin Smith's Laurion Capital Management

10. Citigroup, Inc. (NYSE:C)

Laurion Capital Management's Stake Value: $136.4 million

Percentage of Laurion Capital Management's 13F Portfolio: 0.57%

Number of Hedge Fund Holders: 87

Citigroup, Inc. (NYSE:C) is a New York-based multinational investment banking and financial services corporation. Formed by the merger of Citicorp and the Travelers Group in 1998, the company provides investment banking, retail brokerage, corporate banking, and cash management services.

According to the third-quarter 13F filings, Laurion Capital Management owns more than 1.94 million shares worth $136.4 million in Citigroup Inc. (NYSE:C).

Boykin Curry of Eagle Capital Management is one of the biggest stakeholders of Citigroup, Inc. (NYSE:C) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 87 funds were bullish on the company by the end of the June quarter, compared to 90 in the previous quarter.

On October 15, BMO Capital analyst James Fotheringham raised his price target on Citigroup, Inc. (NYSE:C) to $86 from $84, and kept an Outperform rating on the shares of the company.

Besides Alibaba Group Holding Limited (NYSE:BABA), Alphabet Inc. (NASDAQ:GOOG), and PG&E Corporation (NYSE:PCG), Citigroup, Inc. (NYSEC:C) is a notable stock to invest in.

9. Alphabet Inc. (NASDAQ:GOOG)

Laurion Capital Management's Stake Value: $165.7 million

Percentage of Laurion Capital Management's 13F Portfolio: 0.69%

Number of Hedge Fund Holders: 155

Multinational tech conglomerate holding company and parent of the Google search engine, Alphabet Inc. (NASDAQ:GOOG) rallied on November 8 to reach $2 trillion in market value for the first time, fueled by growth in the company's advertising and cloud businesses.

Laurion Capital Management owns 62,202 shares in Alphabet Inc. (NASDAQ:GOOG), worth $165.7 million, making up 0.69% of the firm’s Q3 portfolio. Overall, 155 hedge funds owned stakes in the company at the end of June.

Of the elite funds being tracked by Insider Monkey, Ken Fisher's Fisher Asset Management is among the leading shareholders of Alphabet Inc. (NASDAQ:GOOG), with 1.83 million shares worth more than $4.9 billion.

On November 2, Morgan Stanley analyst Brian Nowak raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,200 from $3,000 and kept an Overweight rating on the shares.

Oakmark Funds, in its Q3 2021 investor letter, mentioned Alphabet Inc. (NASDAQ:GOOG). Here is what the fund said:

Alphabet, a U.S. communication services provider, was once again a top contributor for the quarter, solidifying its rank as a top contributing stock for the one-year period. The company’s financial results repeatedly exceeded expectations. In particular, its revenue grew faster than expected and its margin trends improved across all segments. In addition, management has executed $24.4 billion of stock repurchases so far in 2021. After further examination, we recently increased our estimate of Alphabet’s intrinsic value based on the company’s better than expected operating leverage and its notable efficiency improvements. As a result, we continue to believe that Alphabet is trading at a significant discount to its intrinsic value.”

8. Bausch Health Companies Inc. (NYSE:BHC)

Laurion Capital Management's Stake Value: $209.8 million

Percentage of Laurion Capital Management's 13F Portfolio: 0.88%

Number of Hedge Fund Holders: 45

Bausch Health Companies Inc. (NYSE:BHC) is a Canadian multinational pharmaceutical company involved in the development and sales of medications and over-the-counter (OTC) products used in neurology, dermatology, and treatment of other infectious diseases.

According to the third-quarter data, Laurion Capital Management holds more than 7.5 million shares of Bausch Health Companies Inc. (NYSE:BHC), amounting to $209.8 million and representing 0.88% of the investment fund’s portfolio.

Carl Icahn of Icahn Capital is one of the biggest stakeholders of Bausch Health Companies Inc. (NYSE:BHC) as of the end of the third quarter, according to the data tracked by Insider Monkey. Overall, 45 funds were bullish on Bausch Health Companies Inc. (NYSE:BHC) by the end of the June quarter, compared to 42 in the previous quarter.

On November 3, JPMorgan analyst Chris Schott maintained an Overweight rating on Bausch Health Companies Inc. (NYSE:BHC) with a $38 price target.

In its Q1 2021 investor letter, Miller Value Partners, an asset management firm, mentioned Bausch Health Companies Inc. (NYSE:BHC). Here is what the fund said:

“Bausch Health Companies (BHC) climbed 55% during the period. Glenview (6% owner) sent a letter to the company in early February arguing the company has not acted to unlock shareholder value and urging the company to sell its eye care business. Shortly after, activist investor Carl Icahn disclosing a 7.83% stake in the company. The company responded to the filing saying that they remain committed to splitting the business into two parts, but are open to pursuing all opportunities. The company reported strong 4Q results with better-than-expected 2021 guidance. 4Q revenue came in at $2,213M slightly ahead of consensus of $2,165M and EPS of $1.34 beat consensus of $1.12. The company guided for 2021 revenue of $8.6-8.8B coming in ahead of expectations of $8.55B with EBITDA of $3.4-3.55B ahead of $3.46B estimated. The company announced the transition of Paul Herendeen to an advisory role to be succeeded by Sam Eldessouky, previously senior vice president, controller and chief accounting officer. Finally, the company announced the sale of Amoun Pharmaceutical for $740M, which was relatively in line with estimates and should help support debt reduction targets ahead of the planned spin-off of Bausch + Lomb eye care business.”

7. Merck & Co., Inc. (NYSE:MRK)

Laurion Capital Management's Stake Value: $217.3 million

Percentage of Laurion Capital Management's 13F Portfolio: 0.91%

Number of Hedge Fund Holders: 79

Manufacturer of the world's most profitable cancer drug, Keytruda, Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based pharmaceutical company that markets pharmaceutical drugs, medicines, vaccines, and animal health products.

On November 1, Argus analyst David Toung upgraded Merck & Co., Inc. (NYSE:MRK) to Buy from Hold, with a $110 price target after what the analyst calls a "strong" Q3 result.

As of Q3 2021, Benjamin Smith's hedge fund owns over 2.89 million shares of Merck & Co., Inc. (NYSE:MRK), amounting to more than $217.3 million and accounting for 0.91% of his investment firm's portfolio value. Of the 873 elite funds tracked by Insider Monkey, 79 were long Merck & Co., Inc. (NYSE:MRK) at the end of June.

Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Merck & Co., Inc. (NYSE:MRK) with 10.6 million shares worth more than $798.6 million.

In its Q1 2021 investor letter, Artisan Partners highlighted a few stocks and Merck & Co., Inc. (NYSE:MRK) was one of them. Here is what the fund said:

“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”

6. Willis Towers Watson Public Limited Company (NASDAQ:WLTW)

Laurion Capital Management's Stake Value: $230.5 million

Percentage of Laurion Capital Management's 13F Portfolio: 0.97%

Number of Hedge Fund Holders: 70

One of the largest insurance brokerage firms in the world, Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is a global advisory and solutions company that provides products and services to help clients manage risk and optimize benefits.

Based on the third quarter securities filings, Benjamin Smith's Laurion Capital Management holds 991,800 shares of Willis Towers Watson Public Limited Company (NASDAQ:WLTW), amounting to more than $230.5 million in worth and representing 0.97% of the fund’s portfolio. By the end of the second quarter of 2021, 70 hedge funds out of the 873 tracked by Insider Monkey held stakes in Willis Towers Watson Public Limited Company (NASDAQ:WLTW) worth roughly $5.59 billion. This is compared to 66 hedge funds in the previous quarter with a total stake value of approximately $5.18 billion.

Out of the elite funds tracked by Insider Monkey, Jean-Marie Eveillard's First Eagle Investment Management is the leading shareholder in Willis Towers Watson Public Limited Company (NASDAQ:WLTW), with 4.74 million shares worth approximately $1.1 billion.

On October 29, Truist analyst Mark Hughes raised his price target on Willis Towers Watson Public Limited Company (NASDAQ:WLTW) to $310 from $290, and kept a Buy rating on the shares of the company.

Similar to Alibaba Group Holding Limited (NYSE:BABA), Alphabet Inc. (NASDAQ:GOOG) and PG&E Corporation (NYSE:PCG), Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is one of the top stocks in Benjamin Smith's portfolio.

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Disclosure: None. Top 10 Stock Picks of Benjamin Smith's Laurion Capital Management is originally published on Insider Monkey.