We recently published a list of 10 safe stocks to buy according to billionaire Chilton. In this article, we take a look at how Sherwin-Williams Company (NYSE:SHW) 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 close-up of bright paint being sprayed onto a wooden surface.
The Sherwin-Williams Company (NYSE:SHW)
Chilton Investment Company share value: USD 317,175,851
Number of hedge fund owners: 78
According to billionaire Chilton, Sherwin-Williams Company (NYSE:SHW) is on our list of safe stocks to buy. Sherwin-Williams Company (NYSE:SHW) makes corrosion-resistant coatings for commercial vessels and the marine industry that provide protection in harsh, wet environments. Sherwin-Williams Company (NYSE:SHW) serves residential, commercial, and industrial customers, which diversifies its business model and helps mitigate the impact of market cycles.
Sherwin-Williams Company (NYSE:SHW), which is organized into three segments – Paint Stores Group, Consumer Brands Group and Performance Coatings Group – is showing a strong growth trend, especially in its Paint Stores Group, which generates over 50% of the company’s revenue and has posted significant growth of 12.6% and 7.3%, respectively, since 2021. While the Consumer Brands Group has faced challenges with minimal growth, the Performance Coatings Group has made steady progress, posting a 13% increase from 2021 to 2022.
Analyst Jay Capital rates The Sherwin-Williams Company (NYSE:SHW) a “Buy,” citing the improving macroeconomic environment, stronger market position, and favorable cost outlook. He believes management’s fiscal 2024 EPS guidance is conservative and expects The Sherwin-Williams Company (NYSE:SHW) to exceed the upper end of that range, potentially reaching $12.2, which would likely significantly improve investor sentiment.
The Sherwin-Williams Company (NYSE:SHW) ranks second on our list of safe stocks to buy, according to billionaire Chilton. At the end of the first quarter of 2024, Chilton Investment Company owned 913,183 shares of The Sherwin-Williams Company (NYSE:SHW) worth $317,175,851. According to regulatory filings, this investment represented 8.69% of Chilton’s total portfolio.
Total SHW 2nd place on our list of safe stocks to buy according to billionaire Chilton. While we recognize SHW’s potential as an investment, we believe AI stocks that fly under the radar promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than SHW 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.
