When it comes to selecting stocks, Third Point’s Daniel Loeb, Charlie Munger at Daily Journal, and Berkshire Hathaway’s Warren Buffett are three investors worth following. Each of these men is a billionaire with a lengthy history of beating the market with their stock picks. These three investors have recently taken advantage of uncertainty around certain leaders, like Activision Blizzard, to get great stock deals. Here’s a look at their stock selections.
Because investment firms and corporations that manage a minimum of $100 million in assets are required to report their holdings every quarter on Form 13F with the Securities and Exchange Commission (SEC), it’s apparent that Loeb is all in on Bobby Kotick’s Activision Blizzard (ATVI) stocks. He’s not the only one confident in the gaming company: The Activision Blizzard board fully backs CEO Kotick. According to a recent statement, “The board remains confident in Bobby Kotick’s leadership, commitment, and ability to achieve our goals.”
Billionaires Are Buying Bobby Kotick’s Activision Blizzard Stocks
Loeb is the CEO and founder of the New York–based hedge fund Third Point. According to Forbes, Third Point oversees $19 billion in investor assets. Third Point seeks to “identify situations with a recognizable catalyst, which we anticipate will unlock value.” One of those situations is Bobby Kotick’s Activision Blizzard.
Third Point bought 2 million shares of Activision Blizzard in the third quarter. In a $175 billion industry, the video game holding company, which Bobby Kotick helped create in 2008, is one of the leading game producers and developers. It’s important to note that other fund managers, including Lee Ainslie at Maverick Capital, have been interested in Activision Blizzard stocks. And their instincts are spot-on: On Jan. 18 Microsoft bought Activision for $68.7 billion, sending its stock soaring 30% before the closing bell.
CEO Bobby Kotick has been leading the Santa Monica, California-based gaming giant since 1991. Today, Activision Blizzard is responsible for many of the most popular gaming franchises of all time, including Call of Duty, World of Warcraft, Crash Bandicoot, Candy Crush Saga, Tony Hawk’s Pro Skater, and Diablo. The company has earned a reputation for growing profits and delivering market-beating returns to shareholders, which is why it’s a popular choice for billionaire investors such as Loeb.
Alibaba Joins Activision Blizzard Ranks
Charlie Munger ran his own investing partnership from 1962 to 1975, where he earned a compound annual return of 19.8%. Today he is the longtime vice chairman of Berkshire Hathaway, as well as the chairman of Daily Journal, a media and technology company, which is why investors take note of what he’s doing.
Over the last year, Chinese tech giant Alibaba’s share price has been reduced in half amid Chinese regulatory authorities’ crackdown on large internet platforms. According to the Daily Journal’s 13F filing for the fourth quarter, Alibaba (NYSE: BABA) was one of only five of their holdings.
The SEC recently finalized a rule that clears the way to delist any foreign companies that don’t comply with requests by auditors for three consecutive years of data. While some companies can offer to compensate shareholders with share buybacks, it has yet to be determined what options United States investors have if Alibaba is forced to delist its shares. But it doesn’t seem that Munger is at all concerned, believing the risks to be overblown, and instead, he sees Alibaba as an extremely undervalued company that is worth the investment.
Chevron, Like Activision Blizzard, Is a Popular Stock Pick
Warren Buffett’s choices have resulted in Berkshire Hathaway shareholders receiving an annualized return of 20% per year since he took over the business in 1965. Buffett’s career history shows he’s fond of large profitable energy companies like Chevron. At the end of the third quarter of 2021, Berkshire Hathaway held 28.7 million shares of Chevron, which would be worth $3.6 billion at the current quote.
Chevron has struggled for more than a decade to produce adequate returns on invested capital because of falling oil prices, so this recent surge in spot prices is giving the company new life. Its third quarter earnings report shows that during the first nine months of the year, Chevron’s total profits were $10.5 billion. In comparison, a year ago, they lost $4.9 billion. Chevron CEO Mike Wirth noted in the Q3 press release that the third quarter earnings were the highest since the first quarter of 2013. Wirth explainedthat was due primarily to improved market conditions, strong operational performance, and a lower cost structure.
Bobby Kotick: Inspired to Keep Building Activision Blizzard“Our mission to connect and engage the world through epic entertainment has never been more meaningful,” says Kotick. He seems confident that as long as Blizzard Activision keeps making great games, people will want to play — and pay for — them. Kotick has said, “If it’s compelling and engaging, customers will consider paying for it. If not, we won’t expect value in return.”