Billionaire hedge fund managers consider many variables when deciding which stocks to buy. Financial strength, growth prospects, management, and valuation definitely make the list.
But there’s one thing they probably don’t think about that is on the minds of many retail investors: stock splits. One of the top reasons for stock splits is that they make shares more affordable for investors. However, billionaires don’t worry about being unable to buy a stock with a high share price.
That said, these wealthy investors sometimes still like stocks that have undergone or plan to split their shares. Here’s the favorite stock-split stock for the world’s 10 richest hedge fund managers.
Criteria used
Let me first explain the criteria I used to identify this top stock-split stock. How did I choose the world’s 10 richest hedge fund managers? I started with Forbes’ ranking of the wealthiest hedge fund managers in 2023.
One member of the group, Renaissance Technologies founder Jim Simons, passed away last year, so he dropped off my list. I also checked the current net worth of the remaining 20 richest hedge fund managers from 2023 to determine the current ranking. This led to some significant changes in the pecking order.
After completing this exercise, here’s who made my list of the world’s 10 richest hedge fund managers:
| Rank | Manager | Hedge Fund | Current Net Worth |
|---|---|---|---|
| 1 | Ken Griffin | Citadel | $37.7 billion |
| 2 | David Tepper | Appaloosa Management | $20.6 billion |
| 3 | Steve Cohen | Point72 Management | $19.8 billion |
| 4 | Michael Platt | BlueCrest Capital Management | $18 billion |
| 5 | Ray Dalio | Bridgewater Associates | $15.4 billion |
| 6 | Israel Englander | Millennium Management | $12.4 billion |
| 7 | Christopher Hohn | The Children’s Investment Fund | $9.5 billion |
| 8 | David Shaw | D.E. Shaw & Co. | $8.3 billion |
| 9 | Paul Tudor Jones | Tudor Investment Corp. | $8.1 billion |
| 10 | Bruce Kovner | Caxton Associates | $7.7 billion |
Data source: Forbes. Current net worth as of July 11, 2024.
Next, I reviewed the portfolios of each of these hedge fund managers using their latest regulatory filings. Importantly, I only focused on the stocks of companies that have conducted or will conduct stock splits in 2024. Some of these billionaire hedge fund managers — Christopher Hohn, Paul Tudor Jones, and Bruce Kovner — didn’t own any stock-split stocks that met my criteria.
Contenders
There were several contenders for the top spot. Chipotle Mexican Grill is the second-highest ranked stock-split stock for Ken Griffin’s Citadel and David Shaw’s D.E. Shaw & Co. hedge funds. The restaurant operator conducted a huge 50-for-1 stock split after the market close on June 25.
Broadcom was in the running, too. The semiconductor maker is the largest stock-split holding for Steve Cohen’s Point72 Management. Griffin also owns the stock in Citadel’s portfolio. Broadcom split its shares 10-for-1 after the market close on July 12.
Walmart is the second-biggest stock-split stock position for Ray Dalio’s Bridgewater Associates. The giant retailer ranks as the No. 3 largest stock-split holding for D.E. Shaw & Co. Walmart conducted a 3-for-1 stock split on Feb. 23.
The clear stock-split favorite
However, one stock-split stock stood head and shoulders above all others in the portfolios of the world’s 10 richest hedge fund managers. You probably won’t be surprised that the clear favorite is… Nvidia (NVDA 1.44%).
Nvidia conducted a highly anticipated 10-for-1 stock split following the market close on June 7. This marked the graphics processing unit (GPU) maker’s sixth stock split in the company’s history.
Nvidia ranks as the largest stock-split holding for Griffin’s Citadel, David Tepper’s Appaloosa Management, Dalio’s Bridgewater Associates, Israel Englander’s Millennium Management, and Shaw’s D.E. Shaw & Co. It is also the second-biggest stock-split position for Cohen’s Point72 Management.
Should you buy Nvidia stock?
Don’t rush to invest in Nvidia just because several of the richest hedge fund managers in the world own the stock. Several of these billionaires (Griffin, Tepper, Englander, and Shaw) reduced their positions in Nvidia during the first quarter of 2024. But just because they’re selling doesn’t mean you should automatically follow suit.
Every investor must make their own decision about whether or not to buy, sell, or hold Nvidia. Ideally, you’ll use some of the same factors these billionaire hedge fund managers use in your evaluation. Two of those factors especially go hand-in-hand — growth prospects and valuation.
Some investors are concerned that Nvidia’s growth prospects are already largely incorporated into its valuation. Others think the stock remains undervalued in light of its future growth opportunities.
I’m somewhere in the middle. Nvidia’s share price certainly reflects tremendous growth expectations. On the other hand, I won’t be surprised if the launch of the company’s chips based on the new Blackwell architecture goes even better than anticipated. If so, the stock will almost certainly move higher.
There’s one thing I think every billionaire hedge fund manager and I would agree on, though. Nvidia’s stock split is now history and shouldn’t influence any investor’s decision about buying the stock.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Nvidia, and Walmart. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.