Review portfolio guru: 10 shares from Bill and Melinda Gates

Previously, we wrote about Bill Gates' extravagant investments in GMO mosquitoes, test tube meat and waste water. Now consider the more conservative investments of the Bill and Melinda Gates Foundation Trust

Microsoft founder Bill Gates is the second richest man in the world. His fortune exceeds $113.3 billion. The billionaire, who has already stepped down from the management of his Microsoft and has left only 1.36% of the company's shares, donates a lot to charity.

Together with his wife Melinda, he heads the world's largest private charity, the Bill and Melinda Gates Foundation. They founded it in 2000 and have since allocated multi-million dollars to fight poverty around the world, to health programmes and to education. The foundation has allocated $100 million to fight COVID-19.

According to a report submitted to the Commission Securities  and the U.S. Exchanges (SEC) for the first quarter, the investment portfolio of the Bill and Melinda Gates Fund was estimated at $17.35 billion.

The ten largest assets account for 94.7% of the total value of the portfolio. Their total estimate as of March 31 exceeded $16.43 billion.

1. Berkshire Hathaway

The largest asset of the investment portfolio Bill and Melinda Gates Foundation - shares of the investment holding Warren Buffett  . Berkshire Hathaway owns large stakes in the business of leading companies. These include Brands Such as American Express, Apple and Coca-Cola.

Berkshire Hathaway's stock value in the Gates Fund exceeds 47.3% of the valuation of the entire portfolio. Gates invested in the holding in 2006 and now owns more than 44.9 million shares.

In the first quarter, the fund cut its stake in Berkshire Hathaway to 1.85% by selling 5 million shares of the financial conglomerate. The value of the asset for the first quarter of 2020 fell by $3.1 billion to $8.2 billion, not only because of the sale of shares, but also as a result of their fall during the market crash in February-March. Berkshire's stock recovery after the fall has been slow, and yet the asset in the fund's portfolio has risen by $0.6 billion to $8.8 billion since the beginning of April (as of July 29).

Analysts surveyed by Refinitiv expect Berkshire Hathaway's securities to rise to $217.5 during the year.

2. Waste Management

Waste Management is the largest solid waste collection, transportation, processing and disposal company in the United States. The fund has held the company's shares since 2002, and now has more than 18.6 million in its portfolio.

In the first quarter, the value of the asset fell by $0.4 billion, to $1.72 billion, as Waste Management shares collapsed during the "coronavirus" fall. Some of the losses were recovered, the asset in the fund's portfolio at market closing prices on July 29 was worth $2.04 billion. So, in the second quarter it rose by $0.32 billion.

Refinitiv experts expect the growth of securities on the horizon of the year to $111.92 apiece. Eight of them recommend buying papers, another eight - to keep purchased shares in the portfolio. There are no recommendations for sale.

3. Canadian National Railway

It is the largest rail network in North America, the Canadian National Railway (it is 30,000 kilometers long). Having invested in the company in 2002, the fund has accumulated almost 17.13 million shares. The share of the asset in the portfolio reaches 7.66%.

For the first quarter, the asset slipped in value by $0.22 billion, to $1.33 billion. But with the market's resumption of growth, Canadian National Railway shares recovered quickly and even soared above the February peak. As a result, since the beginning of April, the asset in the portfolio of the Bill and Melinda Gates Fund has risen by $0.36 billion, to $1.69 billion.

Analysts interviewed by Refinitiv believe that shares of the rail network have exhausted their potential. In particular, Bank of America experts in June raised the target of securities to $99, near which they are now traded.

4. Walmart

The fund's fourth-largest investment asset is Walmart,the world's largest retailer. It includes more than 10,000. stores in 27 countries. The network accounts for 7.6% of the total value of the Gates portfolio.

On March 31, a stake of 11.6 million Walmart shares was valued at $1.31 billion. During the "coronavirus" fall, the retailer's shares sagged by 13%, but quickly made up for the losses after reaching the bottom in late March. Now the papers are trading 9% above the February peaks. After asking $60 million in the first three months of the year, Walmart's assets in the fund's portfolio rose by $200 million in the second quarter, and as of July 29, it was valued at $1.52 billion.

Wall Street experts polled by Refinitiv forecast Walmart's stock to rise to $137.27 apiece over the year. Of the 34 respondents, 26 recommend paper to buy.

5. Caterpillar

One of the world leaders in the production of caterpillarspecial equipment. The corporation is known for its transport equipment, construction equipment and power plants.

Over 15 years of investing in Caterpillar, the fund's portfolio has accumulated more than 11.26 million shares. In the first quarter, the paper fell in price by 21.4%, and the asset depreciated by $0.36 billion, to $1.3 billion. As of July 29, the value of the asset in the Gates portfolio was $1.58 billion, which is $0.28 billion more than at the end of the first quarter.

Analysts do not see the growth potential of Caterpillar shares. The papers are now trading at about the average annual target of $133.55 set by the Refinitiv consensus.

6. Crown Castle International

Crown Castle International is the sixth largest wireless provider in the United States. The fund holds more than 5.33 million shares of the company.

This shareholding was valued at $758 million on December 31, 2019, $770 million on March 31, 2020, and $927.2 million on July 29. The asset rose by $12 million in the first quarter, due to the fact that the shares in the week after reaching the "bottom" (March 23) soared above the level of the beginning of the year. The paper is now 22 per cent more expensive than at the start of January, and Crown Castle's assets in the fund rose by $157.2 million in the second quarter.

Crown Castle shares are now trading near the annual target set by the Refinitiv consensus. Nine experts recommended "buy" the paper and "keep" them in the portfolio. Not a single recommendation for sale.

7. Ecolab

Another industrial asset in the Gates Foundation is the supplier of detergents and disinfectants for catering, hospitality, health, education and retail.

Ecolab's 4.36 million shares, which the fund owns, depreciated by $162.3 million in the first quarter of 2020 to $680.4 million. But by the end of the second quarter the papers reached the level of the beginning of the year, and are now estimated at $850.7 million (as of July 29). The value of the asset increased by $170.3 million from April to July.

Most analysts do not believe in further growth of Ecolab shares, which are already trading near the annual target of $193.58. At the same time, Bank of America expects Ecolab shares to rise to $212 during the year and UBS to $210 apiece.

8. United Parcel Service

The united Parcel Service, a company specializing in express delivery of goods and documents, ranks eighth in the top 10 assets of the Bill and Melinda Gates Foundation. It accounts for 2.44% of the value of the entire investment portfolio of the fund. The package contains more than 4.5 million shares.

At the beginning of the year, UPS's assets were valued at $529.7 million and at the end of the first quarter at $422.8 million. Due to the fall in shares in February-March, the UPS package lost nearly $107 million in value for the first quarter. But thanks to the increase in shares by almost 32.4%, the value of the asset by the end of July (as of July 29) increased by $136.9, to $559.7 million.

Analysts do not believe in further growth of UPS shares - the current price of securities exceeds the annual target of the consensus of nasdaq, set at $128.91.

9. FedEx

Another logistics company that Bill Gates invested in is FedEx. It is engaged in mail and courier delivery of goods around the world. In the first quarter, its value decreased by $90 million, from $457 million to $367 million due to a "crown" fall in shares. But with the recovery of the growth of securities, FedEx's assets in the fund's portfolio rose by $145.9 million to $512.9 million by July 29.

According to the consensus forecast of the Nasdaq, the target for FedEx shares is set at $164.35. The growth potential for the coming year has been exhausted.

10. Schrodinger

Schrodinger is the last asset of the top ten of the Bill and Melinda Gates Foundation portfolio. She developed software to find the molecules needed to create new drugs. The public offering of the company's shares in the range of $14-16 took place on February 6, and on the first trading day the papers closed at $28.64.

On February 10, the fund acquired almost 7 million shares of Schrodinger, becoming the owner of 11.03% of the company's capital. The value of this stake on March 31 was estimated at $301.05 million. Since then, the company's shares have soared by 79%, and the asset in the fund's portfolio has risen by $238 million, to $539.05 million.

According to analysts surveyed by Refinitiv, Schrodinger shares will rise to $80 apiece during the year.

The main reason for the fall in quotations was the stock market collapse caused by the COVID-19 pandemic. None of the ten stocks had any other significant reasons for the fall. Therefore, the papers began to recover quickly as soon as the market began to recover from the initial shock.

The strongest growth of the top 10 shares of the investment portfolio was shown by newcomers to the stock exchange - Schrodinger securities. They have soared 169% since the IPO.

The worst dynamics were shown by the shares of Warren Buffett's company. Berkshire Hathaway was the only company in which the Gates Foundation reduced its ownership stake in the first quarter. The Bill and Melinda Gates Foundation has sold 5 million shares in the financial conglomerate.

At the same time, all the shares considered managed to significantly recover losses, which led to an increase in their total value in the second quarter of 2020.

While claiming that the fund did not change the number of shares in these packages, the value of the top 10 assets from April 1 to July 29 increased by almost $2.62 billion, to $19.05 billion.