Billionaire Nicholas Pritzker’s Tao Capital’s Best Stock Ideas and Portfolio

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·6 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

In this article, we discussed Billionaire Nicholas Pritzker's investment philosophy and his venture capital investments. We also discussed billionaire Nicholas Pritzker's Tao Capital's best stock ideas for 2021 to see whether the venture capitalist is in a position to beat the market trends this year. To skip our detailed discussion on Pritzker's investment philosophy, go directly to billionaire Nicholas Pritzker's Tao Capital's 3 best stock ideas.

Billionaire Nicholas Pritzker is famous for his investments in clean energy, technology and transportation, healthcare, and sustainable food & agriculture businesses. Instead of making a well-diversified portfolio, his investment firm Tao Capital invests in just a few stocks that are mostly new startups. The firm held a position in six stocks at the end of the December quarter, according to the latest 13F filings. The 75-year-old billionaire venture capitalist initiated two new positions in the latest quarter and reduced stakes in the top three holdings. The two new stock positions include the developer of measurement devices for chemical and biochemical analysis 908 Devices Inc. (NASDAQ: MASS). He first invested in 908 Devices in 2017 and added to his investments in 2019. In December 2020, 908 Devices priced its initial public offerings of 6.5 million shares of common stock at $20.00 per share for expected gross proceeds of $130 million.

Pritzker, whose worth stands at roughly $1.8 billion, is a leader in positive impact investing in a variety of sectors. The billionaire was among the early investors of Juul Labs, which specializes in the e-cigarette category. The world’s largest cigarette manufacturer Altria Group (NYSE: MO) acquired 35% of Juul in 2018. Pritzker was listed as the company's board member on SEC filings in the early days of the company.

Over the years, Billionaire Nicholas Pritzker has also been contributing money and efforts to his philanthropic activities. He served as a chairman of the Grand Victoria Foundation and vice chairman at Conservation International. Pritzker is the co-founder of Clean Energy Trust, which is investing in clean energy projects. Clean Energy Trust, a non-profit organization, seeks to offer seed investments and support to startups. The organization has invested in 35 companies in the Mid-Continent region of the United States so far since its incorporating in April of 2010.

Pritzker father Jay Pritzker founded the Hyatt Hotels chain and the Marmon Group and owned Braniff Airlines. After graduating from Lake Forest College in Illinois and receiving a law degree from the University of Chicago in 1974, Nicholas Pritzker started working for the family business and become a Divisional Vice President in 1984. He played a key role in Hyatt Hotel’s real estate and gaming-related activities and corporate strategy development efforts. Billionaire Nicholas Pritzker served as vice-chairman at the Hyatt Hotels board before leaving the company in 2009 to start pursuing entrepreneurial activities.

Billionaire Nicholas Pritzker's Tao Capital's Top Stock Ideas and Portfolio
Billionaire Nicholas Pritzker's Tao Capital's Top Stock Ideas and Portfolio

While Nicholas Pritzker's reputation remains intact, the same can’t be said of the hedge fund industry as its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Let’s start reviewing, billionaire Nicholas Pritzker's Tao Capital's best stock ideas for 2021. At the end of Q4 of 2020, Tao Capital's portfolio market value stood at $407 million, almost double from close to $200 million in the year-ago period.

6. Hyatt Hotels Corporation (NYSE: H)

Billionaire Nicholas Pritzker's Tao Capital's best stock ideas for 2021 include his family-owned business Hyatt Hotels Corporation (NYSE: H). At the end of the fourth quarter, he held only 5198 shares of the family business. Shares of Hyatt Hotels recovered strongly in the past two quarters due to easing social distancing policies and prospects for economic reopening. Hyatt Hotels Corporation stock price is currently trading around $88, down from the pre-pandemic level of $92 a share. Hyatt Hotels December quarter revenue fell 66% year over year to $424 million while the loss per share came in at $2.00 compared to earnings per share of $3.08 in the past year period.

Hyatt Hotels Corporation stock was in 27 hedge funds’ portfolios at the end of December compared to the all-time high for this statistics of 38.

5. Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL)

Billionaire Nicholas Pritzker's initiated a new position in a clinical-stage biopharmaceutical company Madrigal Pharmaceuticals, Inc. (NASDAQ: MDGL) during the fourth quarter. Tao Capital bought 5714 shares of Madrigal, accounting for 1.4% of the overall portfolio. Shares of Madrigal Pharmaceuticals grew close to 5% this year, extending the twelve-month gains to over 60%.

A clinical-stage biopharmaceutical company, Madrigal Pharmaceuticals focuses on the development and commercialization of therapeutic candidates for the treatment of metabolic, cardiovascular, and liver diseases. The company's most prominent candidates include MGL-3196, which is a liver-directed selective thyroid hormone receptor-ß agonist.

The company ended the December quarter with cash, cash equivalents, and marketable securities of $284.1 million, down from $439.0 million in the year-ago period. This decline was due to cash used in operations. The company made solid advancements in the last year including the enrollment of the Phase 3 MAESTRO-NAFLD-1 trial and Phase 3 MAESTRO-NASH trial.

4. 908 Devices Inc. (NASDAQ: MASS)

Tao Capital is an early investor of 908 Devices Inc. (NASDAQ: MASS). Pritzker's investment firm held 40749 shares of MASS at the end of the fourth quarter, accounting for 10% of the overall 13F portfolio. Shares of the developer measurement devices for chemical and biochemical analysis fell sharply last month after experiencing some gains early this year. MASS stock price is down around 5% year to date.

908 Devices stock was in 22 hedge funds’ portfolios at the end of December.

To see the remining stock picks of Pritzker, click on Billionaire Nicholas Pritzker's Tao Capital's Top 3 Stock Ideas.

Suggested articles:

Disclosure: None. Billionaire Nicholas Pritzker's Tao Capital's Best Stock Ideas is originally published on Insider Monkey.