We recently published a list of Billionaire Stanley Druckenmiller’s Top 10 Stock Picks. In this article, we are going to take a look at where Philip Morris International Inc. (NYSE:PM) stands against other stock picks of Billionaire Stanley Druckenmiller.
Druckenmiller on the Fed’s Actions
On November 6, billionaire Stanley Druckenmiller appeared in a podcast, In Good Company, hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. Druckenmiller shared his opinion on the easing cycle and the role of the Fed in the current economic backdrop. He shared that he is primarily keeping a close look at companies and is not seeing any signs of weakness, other than the housing market, that too because of elevated price levels. He also added that for the next 3 to 6 months, he does not expect any economic problems to overshadow the market.
Druckenmiller emphasized that the financial conditions are of more interest to him and that they have been very “loose, looser than they were when the Fed actually started tightening.” He is also particularly interested to see if the market is currently in the “70s rally since 2021” when the inflationary period started, expressing his concerns over inflation moving forward. In addition to inflationary concerns, Druckenmiller is also worried that the Fed had declared victory a tad bit early, lacking confidence in the current market backdrop.
He believes that with a 50 basis point cut, roaring equities, and no material weakness, the market may turn up again. Druckenmiller added that the Fed is “obsessed” with a soft landing and emphasized that “fine-tuning” and “worrying about a soft landing” is not their job. The reason why there is an urgency for a soft landing is because the Fed let the inflation rate jump in the first place, he added. Speaking of the Fed’s actions and forward guidance, Druckenmiller highlighted that the Fed believes that if it changes its due course of action, it may lose credibility, leaving its hands tied.
Stanley Druckenmiller is an American billionaire, investor, and founder of Duquesne Capital, with a net worth of $6.9 billion, as of December 14, 2024. Druckenmiller has made a fortune as a hedge fund manager for 30 big years and now manages money from his family office. He also worked with George Soros until 2000, a renowned investor known for shorting the pound in 1992. He also shares interesting opinions on the money market and the economy. In Q3 2024, Druckenmiller initiated 33 new positions, ending the quarter with a portfolio of $2.95 billion in 13F securities. With that, let’s discuss his top stock picks as of Q3 2024.
Our Methodology
We scanned Duquesne Capital’s Q3 2024 portfolio and picked the fund’s top 13F holdings. Additionally, we’ve also added overall hedge fund sentiment for each stock, as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Why Philip Morris International Inc. (PM) is Among Billionaire Stanley Druckenmiller’s Stock Picks?
A man exhaling smoke from a cigarette indicating the use of tobacco products.
Tobacco giant, Philip Morris International Inc. (NYSE:PM), is another top stock pick in Stanley Druckenmiller’s portfolio as of Q3 2024. The company sells products in more than 180 countries across the globe and is currently transitioning to become the largest smoke-free products provider.
As of December 31, 2023, the company has invested over $12.5 billion in developing smoke-free products and has given up on cigarettes completely. By 2030, Philip Morris International (NYSE:PM) intends to become a smoke-free company by a two-thirds majority. While smoke-free alternatives are not entirely risk-free, the company’s products may deliver a reduction in smoking-related deaths by more than 10 times.
Philip Morris International Inc. (NYSE:PM) logged $9.9 billion in sales during the third quarter of 2024, up by 9.6%. 38% of its revenue and 40% of its gross profit came from PMI’s smoke-free business. In addition to that, nearly 36.5 million adult users of PMI’s smoke-free products and nearly 22.1 million adults have switched to its heated tobacco product to prevent smoking. Currently, the company’s smoke-free products are available in 92 markets with close to 40 billion units.
Broyhill Asset Management stated the following regarding Philip Morris International Inc. (NYSE:PM) in its Q3 2024 investor letter:
“Shares of Philip Morris International Inc. (NYSE:PM) gained 21% in Q3. Philip Morris was by far the largest contributor for the quarter. Our core thesis focuses on the shift in business mix from combustible cigarettes towards reduced risk products as well as the company’s re-entry to the US market with its acquisition of Swedish Match. This year, Zyn has become wildly popular. So much so that the company can barely keep it in stock, even as it expands production. We recently discussed how youth usage of these products, a common critique of the company, remains under 2%, even as its overall popularity drives higher volume.”
Overall, PM ranks6th on our list of Billionaire Stanley Druckenmiller’s stock picks. While we acknowledge the potential of PM to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
