Charlie Munger is Warren Buffett’s longtime business associate, as well as the vice chairman of Berkshire Hathaway. Like Buffett, Munger is a pragmatic investor and an active philanthropist. Born in January 1924, Munger is still a force to reckon with in the world of finance. Before joining Berkshire, Munger managed an investment partnership that gave an average annual return of 20% from 1962 to 1975, compared to just 5% by the S&P 500 in the same period. Munger is still an active investor and an inspiration for many around the world. Let’s take a look at the top picks of Charlie Munger.
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Q1 2021 hedge fund letters, conferences and more
Top Picks Of Charlie Munger
We have used the latest Form 13F filing to come up with the top picks of Charlie Munger. He has just five stocks in his portfolio. We have ranked Munger’s top picks on the basis of the percentage value they represent in Munger’s total portfolio. Following are the top picks of Charlie Munger (as of March 31, 2021):
Why The Term ‘Value Investing’ Is Redundant
What does value investing really mean? Q1 2021 hedge fund letters, conferences and more Some investors might argue value investing means buying stocks trading at a discount to net asset value or book value. This is the sort of value investing Benjamin Graham pioneered in the early 1920s and 1930s. Other investors might argue value Read More
Munger owns 9,745 shares of POSCO, having a value of more than $0.7 million. POSCO shares are up more than 99% in the last one year, and over 21% year-to-date. POSCO’s first-quarter net profit nearly tripled from a year earlier owing to higher steel prices. The South Korean steelmaker reported a net profit of 1.139 trillion won ($1.02 billion), up from 434.70 billion won a year earlier. Revenue for the company came in at KRW16.069 trillion, while operating profit for the company more than doubled.
U.S. Bancorp (3.93%)
Munger owns 140,000 shares of U.S. Bancorp, having a value of more than $7.7 million. U.S. Bancorp shares are up more than 50% in the last one year, and over 25% year-to-date.
U.S. Bancorp has grown popular among hedge funds recently. As per Insider Monkey, U.S. Bancorp was in 60 hedge funds’ portfolios at the end of December, compared to 48 at the end of Q3 and the previous all-time high of 53. Berkshire Hathaway had the biggest stake in U.S. Bancorp, followed by D1 Capital Partners, Yacktman Asset Management, Citadel Investment Group, and Schonfeld Strategic Advisors.
Alibaba Group (19.02%)
Munger owns 165,320 shares of Alibaba Group, having a value of more than $37 million. He added Alibaba to his portfolio only recently, buying a $37 million stake in the Chinese company through Daily Journal Corporation, where Munger is the chairman.
Alibaba shares are down more than 6% in the last one year, and over 9% year-to-date. The Chinese company stock has been on a downtrend for some time now. Alibaba missed Q4 earnings expectations, but its revenue increased for the fourth straight quarter.
Some hedge funds dropped their interest in Alibaba. The Chinese company was in 135 hedge funds’ portfolios at the end of Q1, compared to 156 in Q4 and an all-time high of 170. Fisher Asset Management has the biggest stake in Alibaba, followed by Citadel Investment Group, Rokos Capital Management, Tiger Global Management LLC and Millennium Management.
Wells Fargo (31.55%)
Munger owns 1,591,800 shares of Wells Fargo having a value of more than $62 million. Wells Fargo shares have gained more than 65% in the last one year, and over 50% year-to-date.
In April, the bank reported an EPS of $1.05, or an increase of 77% from the same period last year. The reported EPS was also above the consensus estimate of 69 cents per share. Wells Fargo reported revenue of $18.06 billion, which was also better than the analysts estimate.
Lately, a few hedge funds have reduced their interest in Wells Fargo. Wells Fargo was in 96 hedge funds’ portfolios at the end of the Q1, compared to 99 in Q4 and an all-time high of 104. Eagle Capital Management has the biggest stake in Wells Fargo, followed by Pzena Investment Management, Theleme Partners, DE Shaw, and Citadel Investment Group.
Bank of America (45.1%)
Munger owns 2,300,000 shares of Bank of America, having a value of almost $89 million. Bank of America shares have gained more than 65% in the last one year, and over 36% year-to-date. Over the past month, shares of the bank had lost over 1%, compared to the Finance sector’s gain of 3.14% and the S&P 500’s gain of 2.43%.
The nation’s second-largest bank is expected to report an EPS of $0.75, an increase of over 102% from the prior-year quarter. Currently, Bank of America has a Forward P/E ratio of 13.46, compared to the industry average of 12.01. BAC’s PEG ratio is currently 1.92.
A few hedge funds have reduced their interest in Bank of America recently. BAC was in 97 hedge funds’ portfolios at the end of Q1, compared to 99 in Q4 and an all-time high of 139. Berkshire Hathaway has the biggest stake in BAC, followed by Viking Global, GQG Partners, Diamond Hill Capital, and Pzena Investment Management.