We recently published a list of 10 safe stocks to buy according to billionaire Chilton. In this article, we take a look at how The Home Depot, Inc. (NYSE:HD) compares to the other safe-haven stocks recommended by billionaire investor Richard Chilton.
Founded in 1992 by Richard L. Chilton, Jr., Chilton Investment Company seeks to achieve attractive long-term returns with minimal volatility. Since its inception, the firm has consistently followed a fundamental, bottom-up investment approach driven by an ownership mentality. Its primary objective is to acquire partial ownership of outstanding companies rather than engaging in short-term stock trading.
Richard L. Chilton Jr. is chairman, CEO and chief investment officer of Chilton Investment Co. He has been a hedge fund manager for 18 years, a notable tenure in the demanding hedge fund industry. Chilton began his career in 1983 as an analyst at Alliance Capital Management, where he worked with small-cap equity managers Frank Burr and Paul Jenkel. In 1990, he founded an asset management firm for the private bank Allen & Co., but left after two years to start his own hedge fund firm.
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Chilton built his firm in a small one-room office in New York, leveraging the experience of Julian Robertson of Tiger Management Corp. in shorting stocks. He managed and founded a classic long/short equity hedge fund. Chilton’s decision to start his own hedge fund was influenced by Art Samberg, a board member of the mutual fund he co-managed. After he expressed his desire to leave Allen & Co., where he had founded an asset management firm, Samberg, recognizing his talent, encouraged him to start his own fund. In January 1992, Chilton left Allen & Co., turning down an offer from CEO Herbert Allen to buy a stake in his new company, and instead accepted a $1 million investment from Allen, which he combined with his family’s money to start his hedge fund with $5 million.
When Chilton founded his hedge fund in July 1992, he wanted to create a classic long/short equity hedge fund inspired by Alfred Winslow Jones’ first hedge fund model. His strategy was to always stay both long and short without trying to time the market. Chilton’s reputation grew by word of mouth, attracting prominent investors, foundations and funds. Pension funds later followed.
Chilton Investment’s appeal to institutional investors lies in its client-focused approach and strong performance. The firm is a leader in transparency and SEC registration. During the 2008 financial crisis, Chilton allowed clients to withdraw money that later flew back. Chilton’s background in managing pension funds at Alliance Capital gave him important experience in transparency and accountability, making his firm attractive to investors looking for long/short strategies. Chilton currently sees opportunities in blue-chip companies with strong financials, solid dividend yields and steady earnings growth. He expects these “dividend aristocrats” to outperform in a stagnant S&P environment and provide stability and consistent returns through rising dividends. Today, Chilton’s firm has grown significantly and has offices worldwide, a team of industry analysts and manages $7 billion in various strategies across global markets.
Richard L. Chilton Jr. graduated from Alfred University with a bachelor’s degree in finance and economics. Known for his business acumen, Forbes ranks Richard Chilton as the 773rd richest person in the world. His net worth is estimated at $1.3 billion. Chilton Investment Company serves 9 clients and has discretionary assets under management totaling $1,266,939,000, according to its March 2024 Form ADV. Its 13F filing for the first quarter of 2024 reported $3.6 billion worth of 13F securities under management.
Our methodology
This article highlights the 10 safe stocks to buy according to billionaire Chilton. It includes analyst ratings and key details about each company, as well as the number of hedge funds invested in them.
Why focus on the stocks hedge funds invest in? Our research shows that if you follow the top picks of leading hedge funds, you can generate returns that beat the market. We use this strategy in our quarterly newsletter, where we select 14 small-cap and large-cap stocks each quarter. Since May 2014, this approach has produced a return of 275%, beating the benchmark by 150 percentage points. (Further details can be found here)
A hardware store full of products and accessories with a huge selection.
The Home Depot, Inc. (NYSE:HD)
Chilton Investment Company share value: USD 224,739,732
Number of hedge fund owners: 70
Coming in at number 5 on our list of safe stocks to buy according to billionaire Chilton is The Home Depot, Inc. (NYSE:HD). The Home Depot, Inc. (NYSE:HD) is a leading home improvement retailer that offers a wide range of home renovation and repair products and services, with a strong focus on in-store and e-commerce solutions. Since 1993, The Home Depot, Inc. (NYSE:HD) has grown nearly nine-fold, reaching 2,337 stores at the end of the first quarter of 2024. This expansion, coupled with increased revenue, has led to rising profits, allowing The Home Depot, Inc. (NYSE:HD) to consistently return significant capital to its investors.
The Home Depot, Inc. (NYSE:HD) is poised for continued growth, focusing on expanding e-commerce, an efficient supply chain, and effective customer loyalty programs. The Home Depot, Inc. (NYSE:HD) is also benefiting from current home improvement trends, especially in a high-interest environment where homeowners prefer to renovate rather than move. The Home Depot, Inc. (NYSE:HD) is one of the safe stocks to buy, according to billionaire Chilton. As of the end of the first quarter of 2024, Chilton Investment Company held 585,870 shares of The Home Depot, Inc. (NYSE:HD) valued at $224,739,732. This investment represented 6.15% of Chilton’s total portfolio, according to regulatory filings.
Poland Focus Growth Strategy stated the following about The Home Depot, Inc. (NYSE:HD) in its second quarter 2024 investor letter:
“In the second quarter, the largest contributors to portfolio performance were all stocks we do not hold: Home Depot, Inc. (NYSE:HD), Meta Platforms and AbbVie. At Home Depot, much of the quarter’s weakness came in April as a higher-than-expected inflation reading caused investors to question the likelihood of upcoming rate cuts in 2024. Given Home Depot’s rate sensitivity related to home improvement projects, the stock sold off during this period.”
Total HD 5th place on our list of safe stocks to buy according to billionaire Chilton. While we recognize HD’s potential as an investment, we believe that under-the-radar AI stocks offer greater prospects for higher returns, and in a shorter time frame. If you’re looking for an AI stock that’s more promising than HD but trades at less than five times its earnings, read our report on the cheapest AI stock.
READ MORE: Analyst sees a new $25 billion “opportunity” for NVIDIA And Jim Cramer recommends these 10 stocks in June.
Disclosure: None. This article was originally published on Insider Monkey.
