In this article we take a look at some of the best stocks in Jacob Rothschild's RIT Capital's Q1 portfolio. You can skip our detailed analysis of Rothschild's history, his hedge fund performance and go directly to see the 5 Best Stocks to Buy According to Jacob Rothschild's RIT Capital.
Jacob Rothschild is a British billionaire and investment banker. In 1971, he was appointed as the chairman of RIT Capital Partners, one of the largest British investment trusts. At that time, RIT Capital had a value of £5 million. However, in 2019, he stepped down from his duties as a chairman and took presidential powers of the trust.
RIT Capital’s investment policy is to grow and preserve the shareholder’s capital. The fund was listed on London Stock Exchange in 1988 and since then it has returned 11.7% per year to its shareholders. As of June 2021, the net assets of RIT Capital stand at 3.6 billion pounds.
At the end of Q1 2021, RIT Capital’s 13F portfolio consists of 22 stocks. The value of the portfolio is over $943 million, up from $249 million a quarter earlier. Coupang, Inc. (NYSE: CPNG) is the top holding of RIT Capital, accounting for 65.78% of its portfolio. RIT Capital bought shares in Coupang, Inc. (NYSE: CPNG) after its IPO in March 2021, and is the newest addition in Rothschild's 13F portfolio. Along with Coupang, Inc. (NYSE: CPNG), RIT Capital also acquired stakes in CME Group Inc. (NASDAQ: CME), The Coca-Cola Company (NYSE: KO), and Alibaba Group Holding Limited (NYSE: BABA) in the first quarter of 2021.
Technology, healthcare, and consumer services remain the heaviest sectors in RIT Capital’s 13F portfolio in Q1. This can be seen through the fund’s recent activity as it has strengthened its position in Visa Inc. (NYSE: V) and T-Mobile US, Inc. (NASDAQ: TMUS) by 39% and 17%, respectively. Similarly, recent stakes in Coupang, Inc. (NYSE: CPNG), Alibaba Group Holding Limited (NYSE: BABA), and The Coca-Cola Company (NYSE: KO) show RIT Capital’s inclination towards the consumer services sector. Though the fund has not changed its activity in IQVIA Holdings Inc. (NYSE: IQV), the medical technology company remained the second-largest holding of RIT Capital, accounting for 5.9% of its 13F portfolio.
The fund made investments in stocks with a large market cap. Companies like Alibaba Group Holding Limited (NYSE: BABA), The Coca-Cola Company (NYSE: KO), Visa Inc. (NYSE: V), and Alphabet Inc. (NASDAQ: GOOG) have a market capitalization of over $100 billion. These stocks account for 29% of the total portfolio. Moreover, nearly 34% of the companies in the portfolio are located in the U.S.
Best Stocks to Buy According to Jacob Rothschild's RIT Capital
Jacob Rothschild, who was educated at Eton College and University of Oxford, stepped down as the chairman of RIT in 2019. However, the billionaire is still involved indirectly with the hedge fund's strategy and its most important bets. While Rothschild has his reputation intact, the same can't be said of the broader hedge fund industry as its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s analyze the 10 best stocks to buy according to Jacob Rothschild's RIT Capital. We used RIT's 13F portfolio for the first quarter of 2021 for this analysis.
Best Stocks to Buy According to Jacob Rothschild's RIT Capital
RIT Capital’s Stake Value: $8,960,000 Percent of RIT Capital’s 13F Portfolio: 0.94% Number of Hedge Fund Holders: 135
Alibaba Group Holding Limited (NYSE: BABA) is a Chinese e-commerce company that specializes in retail and technology. It is one of the best stocks to buy according to Jacob Rothschild's RIT Capital, as in Q1 2021, the fund has a nearly $9 million stake in the company.
Alibaba Group Holding Limited (NYSE: BABA) is one of the largest e-commerce companies with a market cap of $575 billion.
Polen Capital Management released its Q1 2021 investor letter and mentioned Alibaba Group Holding Limited (NYSE: BABA). Here is what the fund said:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
RIT Capital’s Stake Value: $10,544,000 Percent of RIT Capital’s 13F Portfolio: 1.11% Number of Hedge Fund Holders: 61
The Coca-Cola Company (NYSE: KO) is an American leading beverage company with operations worldwide. RIT Capital bought 200,000 shares in the company worth $10.5 million in Q1 2021, making it one of the best stocks to buy according to Jacob Rothschild's RIT Capital.
In Q1, The Coca-Cola Company (NYSE: KO) reported a net income of $9.0 billion, 5% up from $8.6 billion in a quarter earlier. The KO stock has also shown a promising performance with 24.7% growth in the past five years. The Coca-Cola Company (NYSE: KO) has a very good record of paying dividends to its shareholders. The company pays an annual dividend of $1.68 per share, which yields about 3%.
RIT Capital’s Stake Value: $17,250,000 Percent of RIT Capital’s 13F Portfolio: 1.82% Number of Hedge Fund Holders: 28
Ribbit LEAP, Ltd. (NYSE: LEAP) stands eighth on our list of the best stocks to buy according to Jacob Rothschild's RIT Capital. It is a newly founded company, providing acquisition opportunities to its customers. RIT Capital did not change its position in the company in Q1 2021 and owns 1.5 million shares, worth $17.2 million.
Ribbit LEAP, Ltd. (NYSE: LEAP) is not a large company and has a market cap of $614 million. However, it is grasping the attention of investors, as the stakes of private companies in Ribbit LEAP, Ltd. (NYSE: LEAP) stand at 29%.
Like Visa Inc. (NYSE: V), Alibaba Group Holding Limited (NYSE: BABA), The Coca-Cola Company (NYSE: KO), Alphabet Inc. (NASDAQ: GOOG) and Coupang, Inc. (NYSE: CPNG), Ribbit LEAP is one of the best stocks to buy based on billionaire Rothschild's Q1 portfolio.
RIT Capital’s Stake Value: $18,891,000 Percent of RIT Capital’s 13F Portfolio: 2% Number of Hedge Fund Holders: 60
CME Group Inc. (NASDAQ: CME) is the seventh-largest holding of RIT Capital. The fund holds 92,500 shares of the company, worth $18.8 million as of Q1 2021. CME Group Inc. (NASDAQ: CME) is the latest acquisition of RIT Capital, accounting for 2% of its 13F portfolio.
CME Group Inc. (NASDAQ: CME) generated a revenue of over $1.2 billion or $1.60 per share. The stock price has also grown by 22% in the past year. The company also pays a quarterly dividend of $0.90 per share to its shareholders.
60 hedge funds tracked by Insider Monkey hold stakes in CME Group Inc. (NASDAQ: CME) in Q1'21, compared with 58 funds in the quarter earlier. The total value of these stakes is $2.3 billion.
Like Visa Inc. (NYSE: V), Alibaba Group Holding Limited (NYSE: BABA), The Coca-Cola Company (NYSE: KO), Alphabet Inc. (NASDAQ: GOOG) and Coupang, Inc. (NYSE: CPNG), CME Group is one of the best stocks to buy based on billionaire Rothschild's Q1 portfolio.
Coopers Investors, an investment management firm, published in first-quarter 2021 investor letter and mentioned CME Group Inc. (NASDAQ: CME). Here is what the firm has to say in its Q1 investor letter:
“CME has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
RIT Capital’s Stake Value: $35,517,000 Percent of RIT Capital’s 13F Portfolio: 3.76% Number of Hedge Fund Holders: 98
T-Mobile US, Inc. (NASDAQ: TMUS) is sixth on our list of the best stocks to buy according to Jacob Rothschild's RIT Capital. The company is the most famous carrier in the U.S. with the largest nationwide 5G network. As of Q1 2021, RIT Capital owns 283,500 shares of the company, worth $35.5 million.
T-Mobile US, Inc. (NASDAQ: TMUS) had solid earnings in Q1 with $19.7 billion generated in revenues, compared with $11.1 billion during the same period last year. The stock has also bounced back after hitting a low of $74.5 in March 2020. In the past year, the shares of T-Mobile US, Inc. (NASDAQ: TMUS) stock have grown by 38%
Out of 866 hedge funds tracked by Insider Monkey, 98 funds hold stakes in T-Mobile US, Inc. (NASDAQ: TMUS), with a total value of $9.05 billion.
Like Visa Inc. (NYSE: V), Alibaba Group Holding Limited (NYSE: BABA), The Coca-Cola Company (NYSE: KO), Alphabet Inc. (NASDAQ: GOOG) and Coupang, Inc. (NYSE: CPNG), T-Mobile US, Inc. (NASDAQ: TMUS) is one of the best stocks to buy based on billionaire Rothschild's Q1 portfolio.
ClearBridge Investments, an investment management firm, published its Q1 2021 investor letter. Here is what the firm has to say about T-Mobile US, Inc. (NASDAQ: TMUS):
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where T-Mobile trailed after generating robust returns earlier in the recovery.”
