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Cliff Asness Stock Portfolio: 10 Top Stock Picks

In this article, we discuss Cliff Asness and his top 10 stock picks. If you want to read about some more stocks in the Asness portfolio, go directly to Cliff Asness Stock Portfolio: 5 Top Stock Picks.

Cliff Asness, the chief of AQR Capital Management, is one of the most successful hedge fund managers on Wall Street. His fund, short for Applied Quantitative Research, has roots in the asset management department of Goldman Sachs, one of the premier investment banks in the world. Asness - whose academic career boasts undergraduate degrees in economics and engineering, a doctorate in finance, and research under Nobel-winning economist Eugene Fama - pioneered a quant trading method during his Goldman stint that used computerized models to identify underpriced equities, currencies, bonds, and commodities. These markers were then used for high frequency trading and short selling in order to maximize investment returns. 

Starting with $10 million from a select group of investors in 1995, Asness managed to employ this quant method to grow what would later become the Goldman Sachs Global Alpha Fund to over $100 million within a few months. Even though Asness left Goldman Sachs to start his own hedge fund in 1998, the Alpha Fund continued to grow, managing $12 billion in assets by 2007. At his own hedge fund, with a lot more room to deploy his investment ideas, Asness generated even greater returns. According to a report in The New York Times, Asness made $37 million for clients in 2002 and $50 million in 2003. Within a decade of starting his own hedge fund, Asness had over $33 billion in assets under management. This number has continued to grow since then.

Asness recently made headlines when he said that he prefers bonds over equities in the present market, given the returns that were being offered by the United States Treasury. Asness manages an equity portfolio worth more than $48 billion at the end of September 2023, per latest data. His remarks echo statements made earlier this year in which he predicted that US dominance of equity markets was nearing an end, ushering in an era for emerging markets that would last years. Even though Asness prefers bonds over equities, it is noteworthy to look at the moves his hedge fund has made in the market over the past few months.

This is because Asness has increased the value of his equity portfolio by more than $1 billion between June and September this year by employing quant strategies that have made him famous. Regulatory filings show that in the third quarter, Asness made new purchases in 254 stocks, additional purchases in 1,140, sold out of 123, and reduced holdings in 905 stocks. The top ten holdings in his equity portfolio account for nearly 15% of the total portfolio. Some of the top stocks in the AQR Capital Management portfolio include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG). 

Our Methodology

These were picked from the investment portfolio of AQR Capital Management at the end of the third quarter of 2023. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2023 was used to quantify the popularity of each stock in the hedge fund universe. 

Cliff Asness Stock Portfolio: 10 Top Stock Picks
Cliff Asness Stock Portfolio: 10 Top Stock Picks

Cliff Asness of AQR Capital Management

Cliff Asness Stock Portfolio: Top Stock Picks

10. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 109  

Adobe Inc. (NASDAQ:ADBE) operates as a diversified software company worldwide. Securities filings show that AQR Capital Management owned over 722,047 shares of Adobe Inc. (NASDAQ:ADBE) at the end of September 2023 worth $368 million, representing 0.76% of the portfolio. 

On November 14, investment advisory Evercore maintained an Outperform rating on Adobe Inc. (NASDAQ:ADBE) stock and raised the price target to $700 from $605, noting platform firms remain well-positioned to take advantage of an expected rise in IT budgets. 

Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Adobe Inc. (NASDAQ:ADBE) with 4.5 million shares worth more than $2.3 billion. 

Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Adobe Inc. (NASDAQ:ADBE) is one of the top stocks in the portfolio of Cliff Asness. 

In its Q3 2023 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Adobe Inc. (NASDAQ:ADBE) was one of them. Here is what the fund said:

“Both Alphabet and Adobe’s businesses continue to perform well. With respect to Adobe, the most recent quarter delivered more of the same with constant currency revenue growing 13%, margin expansion, and over 2% of shares outstanding repurchased for non-GAAP earnings growth of over 20%. We believe its approach to GenAI through Firefly, which guarantees safe content because it trains on Adobe Stock, will continue to be attractive to enterprises. The counter to GenAI, and something we are keeping an eye on with Alphabet and Adobe, is that it requires heavy investment. While both businesses can leverage their scale and manage costs in other areas, we expect the investment in future growth through GenAI will weigh on company-wide margins over the near term.”

9. Walmart Inc. (NYSE:WMT

Number of Hedge Fund Holders: 81

Walmart Inc. (NYSE:WMT) operates as a retail firm. Securities filings show that AQR Capital Management owned over 2.7 million shares of Walmart Inc. (NYSE:WMT) at the end of September 2023 worth $432 million, representing 0.89% of the portfolio. 

On November 14, investment advisory Jefferies maintained a Buy rating on Walmart Inc. (NYSE:WMT) stock and raised the price target to $195 from $190, noting the updated price target reflected recent trends in value retailers. 

Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Walmart Inc. (NYSE:WMT) with 9.1 million shares worth more than $1.4 billion.

8. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 278     

Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology firm with core interests in ecommerce. Securities filings show that AQR Capital Management owned over 3.7 million shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of September 2023 worth $472 million, representing 0.97% of the portfolio. 

On November 10, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Amazon.com, Inc. (NASDAQ:AMZN) stock and raised the price target to $210 from $204, backing the firm to drive increasing profit and long-term shareholder value.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) with 34 million shares worth more than $4.3 billion. 

In its Q3 2023 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said: 

“Amazon continues to showcase it’s place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement.

AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition.

Further, our investment case on company profitability driven by AWS and advertising continues to unfold, delivering nearly $8 billion in free cash flow over the trailing twelve months and a net margin of 5%. We expect both to move higher with the mix shift of more profitable businesses growing fastest continuing to take effect.

At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”

7. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 225    

Meta Platforms, Inc. (NASDAQ:META) is a tech firm that owns and runs social media platforms.  Latest 13F filings show that AQR Capital Management owned 1.7 million shares of Meta Platforms, Inc. (NASDAQ:META) at the end of September 2023 worth $519 million, representing 1.07% of the portfolio of the fund. 

On November 1, Loop Capital analyst Rob Sanderson maintained a Buy rating on Meta Platforms, Inc. (NASDAQ:META) stock with a price target of $375, noting there was positivity around the new product momentum of the internet giant. 

At the end of the second quarter of 2023, 225 hedge funds in the database of Insider Monkey held stakes worth $30 billion in Meta Platforms, Inc. (NASDAQ:META), compared to 220 in the preceding quarter worth $25 billion. 

In its Q3 2023 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:META) was one of them. Here is what the fund said:

“As for other quarterly contributors, Alphabet, Inc., (GOOG) and Meta Platforms, Inc. (NASDAQ:META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”

6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 121  

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. Latest data shows that AQR Capital Management owned over 6.4 million shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the third quarter of 2023 worth $564 million, representing 1.16% of the portfolio. 

On October 23, investment advisory Barclays initiated coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock with an Overweight rating and a price target of $105, backing the firm to lead leading-edge production in the long-term. 

At the end of the second quarter of 2023, 121 hedge funds in the database of Insider Monkey held stakes worth $9.6 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 102 in the preceding quarter worth $8.9 billion. 

In addition to Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the top stocks in the portfolio of Cliff Asness. 

In its Q3 2023 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:

“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance, as revenues declined 10% from a year ago. The Company is lapping revenue growth of over +40% (compared to 2022) during every quarter of 2023, so it is more instructive to look at the health of the business through the lens of a multi-year timeframe. Most of the Company’s customers have seen near-term weakness in demand due to pandemic normalization. However, we think the longer-term trend of more silicon per device is still very much intact, and the Company is well-positioned to serve this, given its commanding market share in leading edge capacity. The Company’s aggressive investment in leading-edge equipment combined with tight development with fabless IC designers, plus the embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted in the first quarter due to rising geopolitical tensions, macroeconomic uncertainties, and concerns over softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver above its 15% to 20% revenue growth target over the next several years.”

 

Click to continue reading and see Cliff Asness Stock Portfolio: 5 Top Stock Picks.

 

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Disclosure. None. Cliff Asness Stock Portfolio: 10 Top Stock Picks is originally published on Insider Monkey.