Fund manager Stephen Yiu is one of the UK’s top stock pickers. Over the last three years, his fund, Blue Whale Growth, has returned about 120% – roughly double the performance of a FTSE 100 ETF.
Recently, his firm posted its 13F filing for Q2, giving us a look at the US stocks it bought between the start of April and the end of June. Here are five stocks Yiu and his team snapped up.
Buys in Q2
During Q2, Yiu initiated several new holdings for Blue Whale. One was Applied Materials, a major player in the chip manufacturing equipment space.
This stock has had a great run over the last year amid the global chip boom. Yiu clearly sees potential for further gains though – at the end of July it was a top holding for the fund.
Another new holding was Modine Manufacturing (NYSE: MOD). It’s a leading provider of industrial cooling equipment.
Yiu’s thesis here is that the stock should benefit from Modine’s increasing focus on data centre cooling. With the company set to offload its low-growth legacy automotive business, he sees potential for a valuation re-rating.
Moving on from the new holdings, Yiu aggressively bought Alphabet (Google) stock in Q2. Here, the firm purchased 267,000 shares, increasing its position size by 230%.
Interestingly, this is the only hyperscaler he owns right now. He doesn’t hold Microsoft, Amazon, or Meta.
He also added significantly to Honeywell. It’s a pure-play automation company.
Here, the firm snapped up 115,000 shares, boosting its holding by 54%. At the end of the quarter, the stock was still a relatively small holding, though.
Finally, he added to chip powerhouse Broadcom, boosting this position by 21%. It had a major drop in June, so he may have taken advantage of that.
I definitely saw that dip as a buying opportunity. And so did a lot of other UK investors.
|
Stock |
P/E ratio |
Market cap |
|
Applied Materials |
43 |
$424bn |
|
Modine |
27 |
$11bn |
|
Alphabet |
17 |
$4.2trn |
|
Honeywell |
28 |
$74bn |
|
Broadcom |
36 |
$2trn |
This stock is worth a closer look
Overall, it’s an interesting list of stocks. Taking a long-term view, I see potential in all five.
Perhaps the most interesting name, however, is Modine. Unlike the others, this company is not well known, meaning that its stock may not be getting the attention it deserves.
It’s also much smaller than all of the others. Currently, its market cap is around $11bn (versus $4.2trn for Alphabet) meaning there’s plenty of scope for expansion.
As for growth, it’s certainly impressive. Last quarter, net sales increased 28% year on year to $874.1m.
Zooming in on earnings per share, this rose 44% to $1.53 on an adjusted basis. So, the company is seeing both top- and bottom-line growth at present.
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