Each quarter, retail investors get a look inside the money house when 13F regulatory filings are released for some of Wall Street’s biggest players. In these reports, investors can see who has been buying and selling certain stocks, not necessarily to take advantage of those ideas, but to potentially connect the dots moving forward for their own views on the market.
Data through November 2024 shows that mega investors such as Bill Ackman, Howard Marks and Michael Burry decided to increase their holdings in certain areas of the market during the last quarter. These areas may not be the hottest areas today, but they are part of what is happening with value investments. Hunters must be prepared to go the opposite route.
Buying battered consumer discretionary stocks like Nike Inc. NYSE: FROMBill Ackman thinks today’s price is nothing short of a bargain. The same can be said for Burry buying even more shares. Alibaba Group New York Stock Exchange: BABYa rare Chinese bid, despite the bearish price action that Howard Marks accompanied in his SDA Holdings Inc. NASDAQ: Traffic rules position. Then there’s the hedge fund industry’s even less common move into cryptocurrency.
What Ackman hopes to see with his investment in Nike stock
Following the recent filings, investors will notice that Bill Ackman has built himself a position of up to 16.2 million shares of Nike, a move that not many would dare to make given that the stock is trading at a dismal 63% on its 52-week trail. high.
NIKE today
(As of 11/27/2024 ET)
- 52 week range
- $70.75
▼
$123.39
- Dividend yield
- 1.89%
- P/E ratio
- 22.45
- Target price
- $95.86
It’s not often you see big buyers when a stock exhibits such bearish price action, but this is where most value investors earn their pay. This time, plenty of tailwinds are pushing Nike stock toward a potential comeback.
One is the broader economic landscape, which has investors flailing between potential recession and inflation scenarios based on price movements across many asset classes. With much of the market’s attention now focused on technology, stocks like Nike are flying under the radar today.
Regardless of the inflation or recession scenario, Nike’s $115 billion market capitalization and its international presence and reach help the brand mitigate any impact they may have on the industry. Some on Wall Street also appear to share Ackman’s enthusiasm for Nike stock.
Guggenheim analysts maintained a Buy rating on Nike shares as of October 2024 and have not changed it since then. As a vote of confidence, investors can already add Nike’s $110 per share valuation to further validate this potential investment, suggesting a net upside of as much as 42% from where the stock is trading today.
Why Michael Burry and Howard Marks are betting on China today
Alibaba group today
(As of 11/27/2024 ET)
- 52 week range
- $66.63
▼
$117.82
- Dividend yield
- 1.13%
- P/E ratio
- 17.56
- Target price
- $114.07
Compared to the United States, China’s technology sector today offers one of the widest divergences in history, an opening that these two value investors are poised to exploit for profit. Michael Burry has once again added to his largest position, Alibaba shares, and it appears he is not alone in this opinion.
As of November 2024, Sanders Capital decided to increase its stake in the Chinese giant by 0.3%. While this new allocation may not seem like much in percentage terms, it brings the net investment to $1.9 billion, a direct vote of confidence in Alibaba’s future.
With Barclays analysts setting a price target of $130, Burry and other investors now face upside potential of up to 53% from where the stock is trading today. This is undoubtedly an attractive deal for those looking to invest in overseas markets. Another willing investor is Howard Marks, who has chosen PDD as his choice for commerce in China.
Traffic regulations today
(As of 11/27/2024 6:15 PM ET)
- 52 week range
- $88.01
▼
$164.69
- P/E ratio
- 9.65
- Target price
- $173.40
The stock is now trading at 60% of its 52-week high, making it as much of a discount (in terms of price action) as it was when Ackman decided to buy Nike stock. Moreover, Wall Street analysts’ consensus price target is now $173.4 per share, implying an upside of 74.6% from today’s levels.
These picks cover discounts, double-digit growth potential and a way to diversify from two potential themes that could take over the United States economy: Burry and Marks.
Hedge Funds Turn to Bitcoin ETFs
After reaffirming his views on inflation during a recent interview with CNBC, Paul Tudor Jones decided to hedge against the possibility by purchasing large amounts of Bitcoin through his hedge fund. Jones bought up to $230 million worth of Bitcoin through spot positions and iShares Bitcoin Trust NASDAQ: GO.
iShares Bitcoin Trust today
iShares Bitcoin Trust
(As of 11/27/2024 6:05 PM ET)
- 52 week range
- $22.02
▼
$56.86
- Assets under management
- $48.03 billion
This ETF attracted more than just Jones and his hedge fund; Other institutional players on Wall Street also joined the party. In the second quarter of 2024, Goldman Sachs decided to buy up to $238 million of the same Bitcoin ETF, joining Jones’s pick for this new asset class.
Then London-based hedge fund Capula Management recently disclosed its massive $400 million position in this Bitcoin ETF. This makes sense as markets are exposed to risk and face the possibility of inflation returning to the scene.
Before you consider NIKE, you should hear this.
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