John Hussman’s Q1 Stock Picks: Microsoft Corporation (MSFT) and McDonald’s Corporation (MCD)

By Shira Gonen

John Hussman is an American born stock market analyst and successful hedge fund manager. He is well known for his prediction of the 2008 recession and for his criticism of the U.S. Treasury and the Federal Reserve. Apart from his investing activities he is also an avid philanthropist, starting the Hussman Foundation which seeks to provide assistance to populations with urgent needs or disabilities through medical research and educational aid.

His hedge fund, Hussman Strategic Advisors is valued at $755.41 million. In the last quarter, the fund generated an impressive 6.59% gain for investors. Hussman mainly invests in services stocks, followed by technology, basic materials, and consumer goods. Let’s take a look at Hussman’s Q1 investments in Microsoft Corporation (NASDAQ:MSFT) and McDonald’s Corporation (NYSE:MCD).

John Hussman Stats

John Hussman Portfolio Breakdown

Microsoft Corporation

In the first quarter, the fund increased its stake in Microsoft by 66.67%, now owning 250,000 shares worth $13.81 million. Highlights of the first quarter include the announcement that the company would build its own sim card, better than expected Q2 earnings release, and record breaking success of its Windows 10 operating system. With a few exceptions, Microsoft had traditionally been an excellent investment, offering good dividend yields and growth potential.

Unlike Hussman, hedge funds decreased their holdings in MSFT by an average of 55.7 million shares in the first quarter.

McDonald’s Corporation 

Another Q1 stock pick for Hussman was fast food giant McDonald’s. The hedge fund manager increased his stake in the company in the first quarter by 300%, now owning 1000,000 shares worth $12.57 million. Since launching its All Day Breakfast in October, as well as introducing other initiatives such as new menu items as part of its turnaround plan, the stock has increased 19%. In February, the company posted better than expected Q4 earnings, likely influencing Hussman’s decision to increase his stake in the company. In the first quarter, the company also revealed plans to increase its digital presence through mobile ordering and the creation of a rewards program.

Despite Hussman’s massive 300% increase in the company, other hedge funds do not agree with this move. In the first quarter, hedge funds decreased their holdings by an average of 6.3 million shares.