Last week a roster of the best and most influential investors in the world gave us a glimpse into their minds and their portfolios. Once a year, the heavy weights of the investing world converge on Lincoln Center in the Upper West side of New York City to give their money, their time and some of their best investment ideas, to raise money for pediatric cancer. The Sohn Investment Conference has raised more than $50 million since 1995. And it’s become an event that moves markets.
That was Monday. Later in the week, many of the same billionaire investors made their way West to Las Vegas for the seventh annual SALT Conference. The SALT Conference has become the Super Bowl week of the alternative investment world, headlined by virtually every big influential investor and many heavyweight politicos, including former Chairman of the Federal Reserve, Ben Bernanke.
Why do we care what these billionaire investors have to say?
Because they have the power to influence outcomes, which means their best ideas tend to be very profitable ideas. And with that, it tends to be quite lucrative to follow the lead of these investors. In fact, over the past year, three of the top billionaire investors in the world have said as much — either explicitly or implicitly telling us that investing alongside them is a good idea.
In August of last year, billionaire Bill Ackman said in his quarterly investor letter that “free riders” can follow him “with none of the costs or the illiquidity, and with all of the upside.”
That same month, billionaire Carl Icahn wrote a public essay, where he laid out the power of his “board effect” and how average investors could use it to their advantage. He said “if a person invested in each company on the date that the (Icahn) designee joined the Board and sold on the date that the Icahn designee left the Board they would have obtained an annualized return of 27%. “
Finally, this past week, billionaire Dan Loeb joined in, making the case for the value big influential investors offer to the average investor, saying they can “help power the powerless.”
At BillionairesPortfolio.com, following the best ideas from the world’s best billionaire investors is what we do. With that said, below are what we believe to be the five “best ideas” we heard last week from the world’s best billionaire investors:
1) Billionaire hedge fund manager Larry Robbins has returned 20% annualized (before fees) since 2000 vs. a 4.5% return for the S&P 500 during the same time period. Robbins talked up two stocks that he believes can double: Brookdale Senior Living (BKD) and Abbvie (ABBV). BKD is a play on the aging population of America. Robbins said “demographics are easier than macroeconomics, and the easiest thing to bet on is an aging population.” Brookdale is the largest nursing home company in the country. It owns the majority of its own real estate, or about $28 a share worth, according to Robbins. This means you are getting Brookdale’s business for just $7 a share. The other stock Robbins floated a potential double was Abbvie (ABBV). He said Abbvie is “trading relatively cheap” with a drug pipeline that is underappreciated and it’s difficult for competitors to make generic versions.
2) Billionaires Dan Loeb and Carl Icahn protégé, Keith Meister admitted to owning a combined $2.5 billion worth of YUM Brands (YUM). Loeb likes Yum as a cheap play on China, and Meister likes Yum as an activist play. He believes if Yum spins off its Chinese operations, the stock could be worth as much as $160 a share, or a 75% return from its share price today. Meister also said this was the biggest position his fund has ever taken in a stock.
3) Billionaire Barry Rosenstein of the $12 billion activist hedge fund Jana Partners said that it had taken a $2 billion stake in Qualcomm (QCOM). Rosenstein went further to say this was the biggest position his fund had ever taken. Rosenstein believes Qualcomm is undervalued and that the company needs to ramp up its stock buyback program as well as split off its chipset unit, either of which could drive the stock price dramatically higher.
4) Billionaire hedge fund manager David Tepper, who has returned around 40% before fees over the past 20 years, was very bullish on stocks, in general. Tepper said it’s hard enough to fight one Fed (the U.S. Federal Reserve) but to fight 4 Feds/central banks is impossible. Tepper believes the S&P 500 can return 15% this year. Tepper’s biggest position in his hedge fund is General Motors (GM). Tepper owns a billion dollars plus of GM and has successfully pushed for GM to buy back more than $10 billion of its own stock.
5) Noticeably absent at the two high profile investor conferences last week was billionaire Carl Icahn, arguably the best investor alive. Icahn could, however, be preparing to shock the investing world this week, on his own time. Icahn tweeted on April 28, that Apple (AAPL) is “still undervalued” and that we should expect another in-depth report from him on Apple “within two weeks.” Remember Icahn has said Apple is worth as much as $216 a share or a 76% return from its share price today.
BillionairesPortfolio.com helps average investors invest alongside Wall Street billionaires. By selecting the best ideas from the best billionaire investors and hedge funds, our exited stock investment recommendations have averaged a 31% gain since 2012, beating even Carl Icahn’s record for the same period.