Top Stock Picks of Billionaire Nicholas J. Pritzker’s Tao Capital

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In this article, we discussed billionaire Nicholas J. Pritzker's investment philosophy and his venture capital investments. We also reviewed the top stock picks of billionaire Nicholas J. Pritzker's Tao Capital. You can skip our detailed discussion on Pritzker's investment philosophy and top stock picks, and jump directly to the 4 Top Stock Picks of Billionaire Nicholas J. Pritzker's Tao Capital.

Nicholas J. Pritzker is a billionaire American businessman and venture investor. He co-founded Tao Capital, an investment firm focused on renewable energy and disruptive technology. Pritzker, who has an estimated worth of $2.8 billion, began working in the real estate sector with his father, Jack Pritzker, before joining Hyatt Hotels Corporation. From 1980 to 2007, the billionaire investor served as a director of the Hyatt Hotel Corporation, a hotel chain company founded by his father. Pritzker was born in Chicago and holds degrees from Lake Forest College and the University of Chicago. He founded the Clean Energy Trust in 2010, which invests primarily in clean energy projects.

As of June 30, Tao Capital held positions in 9 stocks with a total 13F portfolio value of $435 million. A majority of the companies in the fund's portfolio are startups or healthcare and clean energy projects. The most notable stock holdings of the 75-year-old billionaire are Zymergen Inc. (NASDAQ:ZY), Hyatt Hotels Corporation (NYSE:H), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), 908 Devices Inc. (NASDAQ:MASS), and ironSource Ltd. (NYSE:IS).

Disruptive technology companies like Tesla, Inc. (NASDAQ: TSLA), Uber Technologies, Inc. (NYSE: UBER), and Ouster, Inc. (NYSE:OUST) are also among the largest stock picks of billionaire Nicholas J. Pritzker's Tao Capital.

Billionaire Elon Musk’s electric car company Tesla, Inc. (NASDAQ:TSLA) is one of the top stock picks of billionaire Nicholas J. Pritzker's Tao Capital, with a total net position of $39 million. Tao Capital first initiated a position in Tesla, Inc. (NASDAQ:TSLA) in the final quarter of 2019. Tesla, Inc. (NASDAQ:TSLA) stock was one of the best performers of 2020, thanks to strong car deliveries and increasing demand for electric vehicles.

Uber Technologies, Inc. (NYSE:UBER), an American technology company that is engaged in ride-hailing, food delivery, couriers, package delivery, and freight transportation services, is the third-largest stock holding of billionaire Nicholas J. Pritzker's Tao Capital. Uber Technologies, Inc. (NYSE:UBER) posted positive adjusted EBITDA in July and August and expects adjusted EBITDA breakeven in the third quarter.

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Why pay attention to hedge fund sentiment while choosing stocks? 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 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). 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 start digging into the top stock picks billionaire Nicholas J. Pritzker's Tao Capital. For this article, we analyzed Tao Capital’s 13F portfolio as of the second quarter.

Top Stock Picks of Billionaire Nicholas J. Pritzker's Tao Capital

9. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL)

Tao Capital's Stake Value: $5 million

Percentage of Tao Capital's 13F Portfolio: 1.15%

Number of Hedge Fund Holders: 20

Over the past four quarters, Tao Capital has been holding a position in Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), a clinical-stage biopharmaceutical company. The stock price of Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) has fallen 27% so far this year. Despite that, the billionaire venture capitalist looks bullish over the future fundamentals of Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL).

In fact, other hedge funds also expressed confidence in Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) in the June quarter. Of the 873 elite funds tracked by Insider Monkey, 20 were bullish on Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) compared to 17 in the previous quarter.

Like Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), hedge funds positions increased in Uber Technologies, Inc. (NYSE:UBER), and Ouster, Inc. (NYSE:OUST) during the June quarter. Meanwhile, the number of hedge funds positions declined by 2 in Tesla, Inc. (NASDAQ: TSLA).

8. Hyatt Hotels Corporation (NYSE:H)

Tao Capital's Stake Value: $5.43 million

Percentage of Tao Capital's 13F Portfolio: 1.25%

Number of Hedge Fund Holders: 23

The shares of the multinational hotel chain Hyatt Hotels Corporation (NYSE:H) rebounded strongly in the last twelve months, driven by a vaccine rollout along with an improving broader travel environment. What's more, Hyatt Hotels Corporation (NYSE:H) is on the verge of returning to profitability in the quarters ahead. For the second quarter, Hyatt Hotels Corporation (NYSE:H) reported positive adjusted EBITDA and trimmed its net loss to $9 million compared to $236 million in the year-ago period.

Unlike disruptive technology growth stocks including Uber Technologies, Inc. (NYSE: UBER), Tesla, Inc. (NASDAQ: TSLA), and Ouster, Inc. (NYSE:OUST), Hyatt Hotels Corporation (NYSE:H) is a value stock pick.

In the second quarter investor letter, Baron Funds said that conditions will normalize by 2022 for Hyatt Hotels Corporation (NYSE:H). Here is what Baron Funds stated about Hyatt Hotels Corporation (NYSE:H):

“Shares of Hyatt Hotels Corp., a global hotelier, declined in the quarter due to investor concerns around a new, more contagious variant of COVID-19 and a reopening of Asia and Europe that was slower than market forecasts. While the slowed reopening is a disappointment, Hyatt’s domestic business and group bookings are starting to return, and we think conditions will normalize by 2022, at least domestically. The company remains on track with its asset sale program as the hotel transaction market returns to pre-pandemic valuations, which should make Hyatt a more valuable, fee-based business.”

7. Zymergen Inc. (NASDAQ:ZY)

Tao Capital's Stake Value: $9.9 million

Percentage of Tao Capital's 13F Portfolio: 2.27%

Number of Hedge Fund Holders: 15

Founded in 2013 and debuted on NASDAQ in April 2021, Zymergen Inc. (NASDAQ:ZY) is a biotechnology company specializing in artificial intelligence, machine learning, and big data. Zymergen Inc. (NASDAQ:ZY) stock price plunged sharply in the past two months after the departure of its CEO Josh Hoffman. Moreover, Wall Street analysts downgraded Zymergen Inc. (NASDAQ:ZY) stock price amid issues with its commercial product pipeline.

In the second quarter 2021 investor letter, Baron Discovery Fund stated that Zymergen Inc. (NASDAQ:ZY) is in the early stages and the fund initiated a small position. Here is what Baron Discovery Fund said:

“Zymergen Inc. is a synthetic biology company that uses microbes to create commercial materials used for products including electronics and consumer products. By using its own customized process that leverages biology, machine learning, and artificial intelligence, Zymergen can create materials never thought possible with standard chemical processes. Zymergen’s microbe-based processes also avoid the use of petroleum products currently used to create most plastics–so the company is highly ESG-oriented as well. In electronics, Zymergen just launched a specialized film for touch sensor screens that is clearer and more scratch resistant than current products, and it also works with folding phone screens. The company will add a new product soon, which is a similar film with higher temperature tolerance. On the consumer side, the company created a novel insect repellant, launching in a couple of years, that is expected to be safe and effective and potentially combined with sunscreen for easy UV and insect protection. The company is also working on other products including drought and insect resistant plant nutrients that are environmentally safe, and environmentally friendly product packaging solutions. We are excited about the company’s prospects. Since its product portfolio rollout is in the early stages, we have started with a small investment.”

6. 908 Devices Inc. (NASDAQ:MASS)

Tao Capital's Stake Value: $22 million

Percentage of Tao Capital's 13F Portfolio: 5.06%

Number of Hedge Fund Holders: 13

Tao Capital has been holding a position in 908 Devices Inc. (NASDAQ:MASS) since the fourth quarter of 2020. Although 908 Devices Inc. (NASDAQ:MASS) stock price has been under pressure so far this year, the company's robust financial performance along with growth strategies will help in enhancing investors' sentiment. 908 Devices Inc. (NASDAQ:MASS) expects 2021 full-year revenue in the range of $40 million to $43 million, indicating a growth of 49% to 60% compared to the previous year.

Like Uber Technologies, Inc. (NYSE: UBER), Tesla, Inc. (NASDAQ: TSLA), and Ouster, Inc. (NYSE:OUST), 908 Devices Inc. (NASDAQ:MASS) is one of the top stock picks of billionaire Nicholas J. Pritzker's Tao Capital.

Cathie Wood Ark Investment Management was the largest shareholder of 908 Devices Inc. (NASDAQ:MASS) as of the end of the second quarter, according to the data tracked by Insider Monkey. Overall, 13 hedge funds were bullish on 908 Devices Inc. (NASDAQ:MASS) by the end of the June quarter, compared to 14 in the preceding quarter.

5. ironSource Ltd. (NYSE:IS)

Tao Capital's Stake Value: $38million

Percentage of Tao Capital's 13F Portfolio: 8.93%

Number of Hedge Fund Holders: 32

The information technology company ironSource Ltd. (NYSE:IS) is a newcomer in Tao Capital’s 13F portfolio, according to its latest filings. Based in Tel Aviv-Yafo, Israel, and debuted on the NYSE earlier this year, ironSource Ltd. (NYSE:IS) stock price continues trading in the $8 to $13 range. ironSource Ltd. (NYSE:IS) generated record revenue of $135 million in the second quarter, up 83% year-over-year.

Unlike Uber Technologies, Inc. (NYSE: UBER) and Tesla, Inc. (NASDAQ: TSLA), ironSource Ltd. (NYSE:IS) and Hyatt Hotels Corporation (NYSE:H) are mid-caps. The rest of the top stock picks of billionaire Nicholas J. Pritzker's Tao Capital such as Ouster, Inc. (NYSE:OUST), Zymergen Inc. (NASDAQ:ZY), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) and 908 Devices Inc. (NASDAQ:MASS) are small caps.

Out of the hedge funds being tracked by Insider Monkey, Chase Coleman's Tiger Global Management LLC was among the major shareholders of ironSource Ltd. (NYSE:IS) as of the end of the second quarter. Coleman's firm increased its stake in the company by 412% in the second quarter of 2021 to 20.5 million shares. The number of long hedge funds positions declined by 20 recently in ironSource Ltd. (NYSE:IS). At the end of the June quarter, ironSource Ltd. (NYSE:IS) was in 32 hedge funds’ portfolios compared to 52 positions in the previous quarter.

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Disclosure: None. Top Stock Picks of Billionaire Nicholas J. Pritzker's Tao Capital is originally published on Insider Monkey.

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