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Top 10 Stock Picks of Kenneth A. Moffet’s Hourglass Capital

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·9 min read
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In this article, we discuss top 10 stock picks of Kenneth A. Moffet's Hourglass Capital. If you want to skip our detailed analysis of Moffet's history, investment philosophy, and hedge fund performance, go directly to Top 5 Stock Picks of Kenneth A. Moffet's Hourglass Capital.

Kenneth A. Moffet is a member of Hourglass Capital's Board of Managers and has been with the firm since June 2008. Hourglass Capital is situated in Houston, Texas. The hedge fund specializes in fixed income, investment, value, and growth equity strategies.

In its 13F filing for the fourth quarter of 2021, Hourglass Capital disclosed $298.62 million in long stock positions, with a top 10 holdings concentration of 30.16%. The hedge fund made purchases in 4 equities during the fourth quarter, increased interests in 12 stocks, dumped 7, and decreased holdings in 59 securities.

Kenneth A. Moffet likes to diversify his portfolio. Therefore, his hedge fund owns small and big firms with strong fundamentals and potential for future development. Some of these companies include Johnson & Johnson (NYSE:JNJ), Verizon Communications Inc. (NYSE:VZ), and General Motors Company (NYSE:GM).

In Johnson & Johnson (NYSE:JNJ), Kenneth A. Moffet's Hourglass Capital owns 13,475 shares. The investment covers 0.77% of the fund’s Q4 portfolio. On January 26, Raymond James analyst Jayson Bedford raised his price target on Johnson & Johnson (NYSE:JNJ) to $185 from $178 and kept an Outperform rating on the shares.

Top 10 Stock Picks of Kenneth A. Moffet's Hourglass Capital
Top 10 Stock Picks of Kenneth A. Moffet's Hourglass Capital

Another notable stock in Kenneth A. Moffet's portfolio is Verizon Communications Inc. (NYSE:VZ). The investor owns a $2.39 million stake in the company. The fund increased its holding in Verizon Communications Inc. (NYSE:VZ) by 29% in the fourth quarter, ending the period with 46,036 shares of the company. On January 26, Deutsche Bank analyst Bryan Kraft raised his price target on Verizon Communications Inc. (NYSE:VZ) to $59 from $57 and maintained a Hold rating on the shares.

Kenneth A. Moffet's Hourglass Capital also owns 27,597 shares of General Motors Company (NYSE:GM). On February 9, Nomura analyst Anindya Das downgraded General Motors Company (NYSE:GM) to Neutral from Buy, with a price objective of $56, down from $66, citing a lower profit forecast from GM's proposed North American cooperation with Honda (HMC).

Our Methodology

With this context in mind, here is a look at the top 10 stock picks of Kenneth A. Moffet's Hourglass Capital. We used Moffet's 13F portfolio for Q4 2021 for this analysis. Elite hedge funds tracked by Insider Monkey in Q3 2021 were used to determine the hedge fund sentiment around the holdings.

Top Stock Picks of Kenneth A. Moffet's Hourglass Capital

10. The Home Depot, Inc. (NYSE:HD)

Hourglass Capital Stake Value: $7,351,000

Percentage of Hourglass Capital's 13F Portfolio: 2.46%

Number of Hedge Fund Holders: 58

The Home Depot, Inc. (NYSE:HD) is a construction goods and home improvement business. On February 11, JPMorgan analyst Christopher Horvers trimmed his target on The Home Depot, Inc. (NYSE:HD) to $406 from $413 and reiterated an Overweight rating on the shares. Horvers told investors in a research note that the consumer climate was encouraging, albeit slower than in 2020 and 2021.

Hourglass Capital started building its position in The Home Depot, Inc. (NYSE:HD) during the fourth quarter of 2015. In Q4 2021, the hedge fund held shares worth over $7.35 million in the company, representing 2.46% of Kenneth A. Moffet's portfolio.

The Home Depot, Inc. (NYSE:HD) saw a decrease in hedge fund sentiment recently. The number of long hedge fund positions declined to 58 at the end of the third quarter, down from 64 positions in the previous quarter.

Like Johnson & Johnson (NYSE:JNJ), Verizon Communications Inc. (NYSE:VZ), and General Motors Company (NYSE:GM), The Home Depot, Inc. (NYSE:HD) is also one of the essential holdings of Kenneth A. Moffet's Hourglass Capital in Q4.

Nelson Capital Management, an investment management firm, in its second-quarter 2021 investor letter, mentioned The Home Depot, Inc. (NYSE:HD). Here is what the fund said:

“In the consumer discretionary sector, we trimmed pandemic winners in favor of companies we believe will outperform in a recovery period. We also trimmed our position in Home Depot (tkr: HD), as it will be challenged by tough comparable statistics, supply chain issues, and rising commodity costs.”

9. HCA Healthcare, Inc. (NYSE:HCA)

Hourglass Capital Stake Value: $7,377,000

Percentage of Hourglass Capital's 13F Portfolio: 2.47%

Number of Hedge Fund Holders: 72

HCA Healthcare, Inc. (NYSE:HCA) operates hospitals, emergency rooms, freestanding surgery centres, and urgent care facilities. Hedge funds are loading up on HCA Healthcare, Inc. (NYSE:HCA), as Insider Monkey’s data shows that 72 hedge funds held a stake in the company as of the end of the third quarter of 2021, compared to 60 funds at the end of the previous quarter.

On January 31, BMO Capital analyst Matt Borsch reduced his price target on HCA Healthcare, Inc. (NYSE:HCA) to $250 from $275 and maintained a Market Perform rating on the shares post its Q4 results. On January 27, HCA Healthcare, Inc. (NYSE:HCA)'s fourth-quarter EPS came in at $4.42, missing estimates by $0.10.

After selling 14,680 shares of HCA Healthcare, Inc. (NYSE:HCA) in the fourth quarter, Kenneth A. Moffet's Hourglass Capital still holds 28,715 shares of HCA Healthcare, Inc. (NYSE:HCA), valuing at $7.38 million.

In its third-quarter 2021 investor letter, First Eagle Investment Management, an investment management firm, mentioned HCA Healthcare, Inc. (NYSE:HCA). Here is what the fund said:

“HCA Healthcare owns and operates 185 hospitals and approximately 2,000 sites of care in the US and UK. Admissions to its facilities, depressed during the worst of the Covid-19 outbreak in 2020, have begun to rebound. HCA reported a nearly 20% year-over-year increase in admissions during the second quarter and a 14% increase in revenue, and forecast that volume would continue to improve throughout the year. We maintain our positive opinion of the company’s management team, believing them to be effective stewards of both the balance sheet and HCA’s business operations.”

8. Broadcom Inc. (NASDAQ:AVGO)

Hourglass Capital Stake Value: $7,433,000

Percentage of Hourglass Capital's 13F Portfolio: 2.48%

Number of Hedge Fund Holders: 50

Broadcom Inc. (NASDAQ:AVGO) is a multinational technology firm that develops, manufactures, and sells semiconductors and infrastructure software. With approximately 1.01 million shares worth $669.40 million, Cantillon Capital Management is the largest shareholder of Broadcom Inc. (NASDAQ:AVGO) as of Q4 2021.

After hosting management for an investor meeting on January 26, Piper Sandler analyst Harsh Kumar reiterated an Overweight rating on Broadcom Inc. (NASDAQ:AVGO) with a price objective of $750.

In the third quarter, hedge fund sentiment increased for Broadcom Inc. (NASDAQ:AVGO). Insider Monkey's data shows that 50 elite hedge funds held stakes in Broadcom Inc. (NASDAQ:AVGO) at the end of the third quarter, up from 47 funds a quarter earlier.

In its third-quarter 2021 investor letter, Miller Howard Investments discussed its stance on Broadcom Inc. (NASDAQ:AVGO). Here is what the fund said:

“Technology remains important in our portfolios, although the sector weights have come down over the past year. We now hold Broadcom (AVGO) of which have strong growth prospects, yet attractive valuations in our view. Unlike many younger tech companies, we believe our holdings should significantly benefit from an upturn in the economy.”

7. Schlumberger Limited (NYSE:SLB)

Hourglass Capital Stake Value: $7,556,000

Percentage of Hourglass Capital's 13F Portfolio: 2.53%

Number of Hedge Fund Holders: 39

Schlumberger Limited (NYSE:SLB) is a technology company that serves the energy sector worldwide. On February 7, Schlumberger Limited (NYSE:SLB) declared a quarterly dividend of $0.125 per share, in line with the previous.

On January 26, Exane BNP Paribas analyst Nick Konstantakis upgraded Schlumberger Limited (NYSE:SLB) to Outperform from Neutral with a price objective of $45. On January 21, Schlumberger Limited (NYSE:SLB) reported financial results for the fourth quarter, posting earnings per share of $0.41, exceeding estimates by $0.02. In addition, the quarterly revenue was up 12.5% YoY, amounting to $6.22 billion, beating the forecast by $130 million.

Overall, in the third quarter, 39 hedge funds monitored by Insider Monkey were bullish on Schlumberger Limited (NYSE:SLB). The stakes of these funds are valued at $1.06 billion.

ClearBridge Investments, in its second-quarter 2021 investor letter, mentioned Schlumberger Limited (NYSE:SLB). Here is what the fund said:

“Schlumberger is a leading oilfield services company that should enjoy both cyclical and secular opportunities over the next market cycle and beyond. On the cyclical front, after years of declining energy service activity and negative pricing, service activity is increasing modestly and pricing is inflecting higher, which is always the key cyclical driver for energy services stocks. In addition, we expect the Middle East to gain share of oil production as ESG considerations limit upstream investment in other regions. As the dominant service provider in the Middle East, Schlumberger is very well-positioned for this shift. On the secular front, Schlumberger has a rapidly growing digital services capability that helps producers operate much more efficiently and with much less waste, which will be a core ESG focus. Finally, Schlumberger is investing directly, and with partners, in energy transition capabilities such as carbon capture, hydrogen and geothermal that should allow Schlumberger to grow and remain viable well beyond the current energy cycle.”

6. Cisco Systems, Inc. (NASDAQ:CSCO)

Hourglass Capital Stake Value: $8,748,000

Percentage of Hourglass Capital's 13F Portfolio: 2.92%

Number of Hedge Fund Holders: 63

Cisco Systems, Inc. (NASDAQ:CSCO) is a technology firm that creates and sells devices and services that enable users to build up internet and communications networks in their homes and businesses. Ken Fisher’s Fisher Asset Management is the most significant shareholder of Cisco Systems, Inc. (NASDAQ:CSCO), with 12.78 million shares worth $809.79 million.

On January 20, JPMorgan analyst Samik Chatterjee lowered his price target on Cisco Systems, Inc. (NASDAQ:CSCO) to $69 from $70 and maintained an Overweight rating on the shares. The dip in growth firms was seen by analysts as an ideal entry point into the Q4 earnings season for networking and hardware.

Cisco Systems, Inc. (NASDAQ:CSCO) is getting the attention of the smart money, as 63 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the third quarter, up from 60 funds a quarter earlier.

In addition to Johnson & Johnson (NYSE:JNJ), Verizon Communications Inc. (NYSE:VZ), and General Motors Company (NYSE:GM), Cisco Systems, Inc. (NASDAQ:CSCO) is one of the stocks gaining the attention of Kenneth A. Moffet's Hourglass Capital.

Click to continue reading and see Top 5 Stock Picks of Kenneth A. Moffet's Hourglass Capital.

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Disclosure: None. Top 10 Stock Picks of Kenneth A. Moffet's Hourglass Capital is originally published on Insider Monkey.