There are few investors who can say they never lost money, but billionaire Stanley Druckenmiller is one of them. And we’re not talking about just squeaking by with a 1% gain, either. His Duquesne Capital Management generated annualized returns of 30% for 30 consecutive years. 

Not even Warren Buffett can claim that distinction, although he’s been investing for more than 60 years. Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) has annualized returns of just under 20% while the S&P 500 has returned around 10% a year.

Founded in 1981, Druckenmiller’s hedge fund was closed in 2010 with $12 billion in assets under management. Today the billionaire investing legend runs a family office that manages the investments for him, his family, and a few others.

We can still invest alongside him because hedge funds and wealthy investors are required to file with the Securities & Exchange Commission the stocks they buy and sell every quarter. Druckenmiller now has $2.8 billion in assets and the two stocks below represent the largest new positions he has taken.

Key Points About This Article:

• Stanley Druckenmiller had an unmatched performance over the 30 years he ran his Duquesne Capital Management as he never had a losing year and generated 30% annual returns.
• While the fund closed in 2010, Duckenmiller now invests through his family office and made two big new purchases of stocks.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Mid-America Apartment Communities (MAA)

Considering no one stock in Druckenmiller’s portfolio of 60 or so positions represents more than 10% of the total, the 644,000 shares of Mid-America Apartment Communities (NYSE:MAA) he just bought worth almost $92 million is a fairly large stake. It represents 3.3% of the family office fund and puts him in the top 10 investors in the company.

Mid-America is a residential real estate investment trust (REIT) with an ownership interest in 103,614 apartment units across 16 states in the southeast, southwest, and mid-Atlantic regions. The market for apartments has been red hot, with demand for units climbing to record levels, according to the National Apartment Association. About 390,000 units were absorbed at an annual rate in the second quarter while supply soared to over 500,000 units.

While MAA stock is up 22% this year, the stock is down 13% over the past three years as the high interest rate environment we’ve endured weighed on profits, which were down 30% year-over-year in the second quarter. 

Because REITs are required to borrow money to finance the cost of construction, they’ve been paying premium rates for their loans. Now that the Federal Reserve made its first jumbo cut in interest rates, the outlook for REITs such as Mid-America Apartment Communities looks brighter.

Interest rates are still elevated despite the 0.5% cut to the federal funds rate, but analysts think as many as 12 cuts could be implemented over the next year. That should significantly bring down borrowing costs and could fuel MAA stock’s future growth.

Philip Morris International (PM)

The second-biggest stock purchase Druckenmiller made was in Philip Morris International (NYSE:PM), the global tobacco giant. Although cigarette smoking is in a secular decline in the U.S. and many European countries, Philip Morris investments in reduced-risk products (RRP) such as electronic cigarettes and nicotine pouches is giving the tobacco stock a new impetus for growth.

The company’s IQOS heated-tobacco e-cig is a market leader globally, especially in Japan where it has a greater than 30% share. It has a 10% share in Europe. Philip Morris reported there were 30.8 million users of its devices at the end of the second quarter, up by 1.9 million since the end of last year. 

Its Zyn brand of nicotine pouches offers a special growth opportunity. Zyn shipments surged over 50% to over 135 million cans in the U.S. Philip Morris is seeing similar growth rates in Europe as well. 

While many see the pouches as a safer means of getting the nicotine hit they’re seeking without the risks associated with smoking, others are using them as a “poor man’s Ozempic” — some wags have termed it O-Zyn-pic — referring to the weight-loss drug. Because nicotine is an appetite suppressant, its helped many lose weight. And considering Ozempic costs $1,000 whereas a can of Zyn goes for about $5, it is seen as a very affordable alternative.

Druckenmiller bought almost 900,000 shares of PM stock for an average price of $96 a shares. His $90 million position, representing a 3.2% position in his portfolio, has already gained about 24% and could go higher on greater RRP sales.

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