Top 10 Stock Picks of Glenn Greenberg’s Brave Warrior Capital (2022)

In this article, we discuss top 10 stock picks of Glenn Greenberg's Brave Warrior Capital. You can skip our comprehensive analysis of Brave Warrior Capital’s history, investment philosophy, and hedge fund performance, and go directly to Top 5 Stock Picks of Glenn Greenberg's Brave Warrior Capital.

American businessman and millionaire Glenn Greenberg, together with John Shapiro, founded Chieftain Capital in 1984. After the duo parted ways in 2009, the firm was then renamed Brave Warrior Capital. Brave Warrior Capital is an investment advisory firm, in which individuals, associated trusts, estates, charitable organizations, and endowments can all benefit from customized investment supervision services provided by the firm. Brave Warrior Capital's Q2 2022 portfolio is currently valued at $2.9 billion and invests primarily in health care, finance, and industrials.

Securities filings for Q2 2022 reveal that Glenn Greenberg's Brave Warrior Capital added 1 new stock to its portfolio, increased its holdings in 9 stocks, sold out of 2 companies, and reduced its holdings in 9 securities. Brave Warrior Capital increased its stakes in Apollo Global Management, Inc. (NYSE:APO), Lithia Motors, Inc. (NYSE:LAD), and Primerica, Inc. (NYSE:PRI), among others. On the other hand, the hedge fund sold out stocks like HCA Healthcare, Inc. (NYSE:HCA), Fidelity National Financial, Inc. (NYSE:FNF), and Raymond James Financial, Inc. (NYSE:RJF).

Some of the most famous stocks held by Glenn Greenberg's Brave Warrior Capital include Amazon.com, Inc. (NASDAQ:AMZN), Mastercard Incorporated (NYSE:MA), and JPMorgan Chase & Co. (NYSE:JPM).

Top 10 Stock Picks of Glenn Greenberg’s Brave Warrior Capital (1)

Glenn Greenberg of Brave Warrior Capital

Methodology

We used the Q2 2022 portfolio of Glenn Greenberg's Brave Warrior Capital for this analysis, selecting the hedge fund’s top 10 holdings. The stocks are ranked according to Brave Warrior Capital’s stake value in each company.

10. OneMain Holdings Inc. (NYSE:OMF)

Brave Warrior Capital’s Stake Value: $108,001,000

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Percentage of Brave Warrior Capital’s 13F portfolio: 3.7%

Number of Hedge Fund Holders: 28

OneMain Holdings Inc. (NYSE:OMF) is an American financial services holding company based in Evansville, Indiana, with regional offices around the country. OneMain Holdings Inc. (NYSE:OMF) is a new addition to Brave Warrior Capital's Q2 2022 portfolio, accounting for 2.88 million shares worth $108 million, representing 3.7% of the whole 13F holdings.

RBC Capital analyst Kenneth Lee on August 2 reduced the firm's price objective on OneMain Holdings Inc. (NYSE:OMF) to $51 from $62 and maintained the shares' Outperform rating. While Lee agrees that OneMain Holdings Inc. (NYSE:OMF) and its non-prime client sector face a higher risk from economic uncertainty, he believes the downside is manageable and continues to prefer the company's strong ROTCE.

According to Insider Monkey’s data, 28 hedge funds were bullish on OneMain Holdings Inc. (NYSE:OMF) in Q2 2022, with collective stakes worth about $621 million. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the second leading position holder in the company, with 2.3 million shares worth about $88.3 million.

In addition to Amazon.com, Inc. (NASDAQ:AMZN), Mastercard Incorporated (NYSE:MA), and JPMorgan Chase & Co. (NYSE:JPM), smart investors are piling into OneMain Holdings Inc. (NYSE:OMF).

Here is what ClearBridge Investments All Cap Value Strategy has to say about OneMain Holdings, Inc. (NYSE:OMF) in its Q4 2021 investor letter:

“Similar to the energy sector, the financials sector is also trading at very depressed multiples relative to the market. While the sector’s strong fundamentals received some recognition in 2021, it was rewarded with substantially lower valuations than it should have had. Despite earnings growing over 30% and exceeding the overall market’s, financial stock multiples stayed flat and are currently selling at a discount of roughly 9x forward earnings.

Consumer lenderOneMain is an excellent representation of the divide between perception and reality. Similar to the market’s outlook on natural gas prices for EQT, the outlook for consumer credit metrics are worse than the current reality. It is inevitable that record-low delinquencies and loss rates will rise. However, the market’s perception of these headwinds to future earnings growth has been excessive. Higher loan losses are just one piece of a larger pie, and we believe that accelerating loan growth and associated operating leverage provides a buffer to allow OneMain to continue to compound earnings for the foreseeable future. Concerns about credit have completely overshadowed these positive drivers and have resulted in the stock trading at just 5x its projected cash earnings for 2022.”

9. United Rentals, Inc. (NYSE:URI)

Brave Warrior Capital’s Stake Value: $109,686,000

Percentage of Brave Warrior Capital’s 13F portfolio: 3.76%

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Number of Hedge Fund Holders: 37

United Rentals, Inc. (NYSE:URI) is an equipment rental firm with sites throughout the United States and Canada through its subsidiary. The company services the construction industry, industrial and commercial businesses, homes, and other individuals. Glenn Greenberg's Brave Warrior Capital owned 451,549 shares of United Rentals, Inc. (NYSE:URI) in Q2 2022, worth $109.6 million, representing 3.76% of its total 13F holdings.

On August 22, KeyBanc analyst Steve Barger boosted the firm's price objective on United Rentals, Inc. (NYSE:URI) from $375 to $425 and maintained an Overweight rating on the stock.

Among the hedge funds tracked by Insider Monkey, 37 were long United Rentals, Inc. (NYSE:URI) in Q2 2022, compared to 47 funds in the prior quarter. Andrew Wellington and Jeff Keswin’s Lyrical Asset Management is the leading shareholder of the company, with about 1.1 million shares worth $285 million.

Here is what Clearbridge Investments Mid Cap Growth Strategy has to say about United Rentals, Inc. (NYSE:URI) in its Q1 2022 investor letter:

“More promising was the performance of several of the portfolio’s core compounding growth names. Construction equipment leasing companyUnited Rentals(NYSE:URI) benefited from continued improvement of non-residential construction trends. The leading contributors to absolute returns during the first quarter included United Rentals.”

8. JPMorgan Chase & Co. (NYSE:JPM)

Brave Warrior Capital’s Stake Value: $195,693,000

Percentage of Brave Warrior Capital’s 13F portfolio: 6.71%

Number of Hedge Fund Holders: 104

JPMorgan Chase & Co. (NYSE:JPM) offers worldwide financial services as well as retail banking investment banking, treasury and securities services, asset management, private banking, card member services, commercial banking, and home finance. Securities filings for Q2 2022 reveal that Glenn Greenberg's Brave Warrior Capital holds 1.7 million shares of JPMorgan Chase & Co. (NYSE:JPM) worth $195 million, representing 6.71% of its 13F portfolio’s value.

According to Insider Monkey’s database, 104 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM) in Q2 2022, down from 110 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management held the largest stake in the company, comprising more than 7.9 million shares worth $899 million.

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Here is what Carillon Eagle Growth & Income Fund has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q1 2022 investor letter:

“More cyclical sectors, including technology and consumer discretionary, were among the weakest, likely due to rising interest rates and inflation. It was encouraging to see the quarter finish on a strong note with the S&P 500 only about 5% away from its all-time highs. Shares ofJPMorgan Chase(NYSE:JPM) detracted from performance due to the company’s increased expense guidance, announced in January.”

7. Raymond James Financial, Inc. (NYSE:RJF)

Brave Warrior Capital’s Stake Value: $200,810,000

Percentage of Brave Warrior Capital’s 13F portfolio: 6.89%

Number of Hedge Fund Holders: 32

Raymond James Financial, Inc. (NYSE:RJF), through its subsidiary investment enterprises, provides financial services to individuals, corporations, and municipalities. The company has operations in the United States, Canada, and other countries.

Morgan Stanley analyst Manan Gosalia on July 18 reduced the firm's price objective on Raymond James Financial, Inc. (NYSE:RJF) to $119 from $138 and maintained an Overweight rating on the stock. The environment for M&A is becoming increasingly difficult, with rising recession risks weighing heavily on activity in the near term, according to Gosalia, who is cutting 2022 and 2023 EPS estimates for the midcap advisors group by a median 31% and 15%, respectively, leaving his estimates 31% and 11% below consensus.

According to Insider Monkey’s data, 32 hedge funds were bullish on Raymond James Financial, Inc. (NYSE:RJF) in Q2 2022, up from 31 funds in the preceding quarter. John Smith Clark's Southpoint Capital Advisors holds the second biggest position in the company, with 2.1 million shares worth $187.7 million.

6. Valvoline Inc. (NYSE:VVV)

Brave Warrior Capital’s Stake Value: $218,260,000

Percentage of Brave Warrior Capital’s 13F portfolio: 7.49%

Number of Hedge Fund Holders: 39

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Valvoline Inc. (NYSE:VVV) produces and sells automotive lubricants and chemicals Motor oil, additives, antifreeze, braking fluid, and grease. Valvoline Inc. (NYSE:VVV) also owns automobile maintenance chains such as oil change and rapid care.

On August 9, Citi analyst Chasen Bender reduced the firm's price objective on Valvoline Inc. (NYSE:VVV) to $35 from $37 and maintained a Buy rating on the stock following the fiscal third-quarter results. The analyst loves the "huge" development opportunity ahead of Retail Services and is delighted to see Valvoline Inc. (NYSE:VVV) going forward with the split, but he feels that some investors were already anticipating a merger and were hoping for a higher sale price for Global Products.

Glenn Greenberg's Brave Warrior Capital owned 7.5 million shares of Valvoline Inc. (NYSE:VVV), worth $218.2 million in Q2 2022, representing 7.49% of the fund’s 13F holdings. Among the hedge funds tracked by Insider Monkey, 39 were bullish on Valvoline Inc. (NYSE:VVV) in Q2, compared to 37 funds in the earlier quarter. Jim Simons' Renaissance Technologies is one of the leading stakeholder of the company, with approximately 2.7 million shares worth $80 million.

In addition to Amazon.com, Inc. (NASDAQ:AMZN), Mastercard Incorporated (NYSE:MA), and JPMorgan Chase & Co. (NYSE:JPM), elite hedge funds are pouring into Valvoline Inc. (NYSE:VVV)

Here is what Wasatch Core Growth Fund has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q2 2021 investor letter:

“Another significant contributor was Valvoline, Inc. (VVV), a company that manufactures lubricants and car parts and operates oil-change service centers. In addition to benefiting from the economic reopening, the company has discovered the advantages of making a mobile app available. Valvoline customers can use the app to find the closest service center and view live estimated wait times. Certainly, the adoption of technology to improve productivity and convenience isn’t a new theme. But we see mobile digitalization as a highly disruptive innovation that creates additional relationships among companies, distributors and customers. As a result, mobile digitalization is a competitive consideration in more and more of the companies that we evaluate for investment. In the first quarter, Valvoline’s stock declined partially because investors worried about the increasing popularity of electric vehicles (EVs)—which are much less dependent on petroleum products. But the stock rebounded in the second quarter, we think partly based on the realization that EVs still represent a tiny percentage of new cars sold and an even smaller percentage of cars in service. Moreover, Valvoline reported strong earnings and raised projections for the future.”

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Disclosure: None. Top 10 Stock Picks of Glenn Greenberg's Brave Warrior Capitalis originally published on Insider Monkey.

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