On May 16, 2022, one of the most crucial dates in the investing community occurred. It was the deadline for hedge-fund and institutional managers with $100 million or more in assets under management to submit Form 13F to the Securities and Exchange Commission.
In basic terms, a 13F is a detailed look at what the top and most successful money managers have bought, sold, and kept during the most recent quarter (in this case, the first quarter). Despite being more than six weeks old when it’s submitted, the data still offers insights into which equities and trends are fascinating to fund managers.
During the first quarter, market volatility increased dramatically. Billionaire money managers, on the other hand, were busy. This volatility, on the other hand, did not deter wealthy investors from making significant growth stock investments. Based on a number of 13F filings, billionaire money managers added to these two growth stocks.
The first one is Meta Platforms (FB -0.49%), formerly known as Facebook, which owns a variety of internet companies including WhatsApp and Instagram. Susquehanna International’s Jeff Yass, Lone Pine Capital’s Stephen Mandel, and Renaissance Technologies’ Jim Simons all acquired a big stake in Meta during the first quarter. Each purchased approximately 3.99 million shares, 3.66 million shares, and 2.27 million shares respectively.
Billionaires are clearly interested in the platform, even in the face of adversity, including Apple’s iOS privacy changes and an increasing chance of a recession in the United States (ad-driven businesses frequently encounter revenue growth deceleration or reversal during recessions).
For example, Meta ended Q1 with 3.64 billion in monthly active users on its family of platforms combined. This implies that over half of the world’s adult population usually visits a Meta-owned asset at least once a month. Advertisers realize that their best bet for reaching a large audience is to advertise on Meta’s ultra-popular social media sites. And this gives Meta significant ad-pricing power in turn.
Meta is also historically cheap. Wall Street forecasts that the firm will produce over $14 in profits per share in 2023, despite Meta’s significant investment in the metaverse. A forward-year price-to-earnings ratio of 14 for a company that has consistently grown by double digits is stunningly low.
In the first three months of this year, China-based electric vehicle (EV) maker Nio was a growth stock billionaire money managers could not get enough of (NIO 5.24%). Renaissance Technologies, David Siegel’s and John Overdeck Two Sigma Investments, and also Ray Dalio’s Bridgewater Associates were all major purchasers.
Like other automobile firms, Nio is facing significant supply chain difficulties. Semiconductor chip shortages have affected the sector as a whole, and the firm has had to deal with component shortages related to COVID-19 restrictions in several Chinese provinces.
Despite these obstacles, Nio rightfully has billionaires pressing the accelerator. The firm was producing EVs at an annual rate of more than 120,000 late last year, suggesting it can quickly scale up production when supply chain difficulties subside.
Nio is also innovative, despite being a relatively new company. Its recently launched sedans, the ET7 and ET5, come with premium battery choices that allow for an estimated 620 miles on a single charge. Nio’s sedans should be able to compete directly against — and possibly take market share from — Tesla’s top two models: the Model 3 and Model S.
Nio’s battery-as-a-service subscription, on the other hand, might be a long-term game changer.