Billionaire Bargain Bin: 3 Stocks the Forbes 400 Loves (That You’ve Never Heard Of)

The Forbes 400 is a list of America’s 400 wealthiest people. Right now, to get on the coveted list, one’s net worth has to be at least $2.9 billion. According to Forbes, the wealthiest 400 have a combined net worth of $4.5 trillion, with many of the names getting rich from technology. Although many billionaires on the list made their wealth from private businesses, many of the Forbes 400 stocks represented by people on the list are companies investors have never heard of. 

How does the list compare to the Bloomberg Billionaire’s Index? It’s a global list with 500 names rather than 400. In addition, it’s calculated in real-time, so the wealthiest person on its list at the time of this article’s publication is Bernard Arnault, the CEO and controlling shareholder of LVMH (OTCMKTS:LVMUY). His current net worth is $226 billion. Forbes’ list had Elon Musk in the top position at $251 billion, but that was before Tesla’s (NASDAQ:TSLA) 2024 meltdown. 

Most of the other names in the Forbes 400 are founders or large shareholders of companies investors are familiar with. However, there are some that most investors wouldn’t know about. Here are three of them for your consideration. 

Royalty Pharma (RPRX)

Source: Billion Photos / Shutterstock

Royalty Pharma (NASDAQ:RPRX) is the world’s largest investor in pharmaceutical royalty streams. It provides drug developers with the capital to carry out clinical trials and commercialize these drugs for a percentage of future revenue. 

Founded in 1996 by current CEO Pablo Legorreta, it went public in 2020 and now has a market capitalization of over $17 billion. Legorreta manages more than $17 billion of assets through RP Management, his affiliated business. According to Forbes, his net worth is $3.1 billion. He’s also the 1,076th-wealthiest person on Forbes’ list of global billionaires. 

Royalty Pharma’s stock has not performed well since its initial public offering (IPO). Right now, its shares are up by just over a dollar from its $28 offering price. But in January 2021, they traded above $51. 

The company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2023 was $2.8 billion, 9% higher than in 2022. Right now, investors looking at this Forbes 400 stock can get paid a 2.8% dividend yield while they wait for it to return to the above $50 level.

Samsara (IOT)

Source: Shutterstock

Samsara (NYSE:IOT) provides hardware and software for companies to harness their physical operations’ IoT (Internet of Things) data to lower their costs and make better decisions about those assets.  

John Bicket is the San Francisco-based company’s Chief Technology Officer (CTO) and co-founder. Bicket created the company with CEO Sanjit Biswas in 2015. Samsara went public in December 2021 at $23 a share and an $11.5 billion valuation. Today, it’s worth nearly $19 billion.

The company reported its Q4 2024 results in early March. Its adjusted total revenue increased 37% to $256.5 million, with a non-GAAP operating profit of $13.5 million, up from a $14.7 million operating loss in Q4 2023. It finished the quarter with annual recurring revenue of $1.1 billion, 39% higher than a year earlier. 

In fiscal year 2025, it expects 29.5% adjusted net revenue growth at the midpoint of its guidance, with a non-GAAP profit of $24 million. It finished the year with 1,848 customers spending more than $100,000 annually. Its stock is up 76% in the past year. I recommended IOT in February, and still consider it to be one of the good choices for Forbes 400 stocks.

According to the Forbes 400, Bicket’s net worth is $3.5 billion. That puts him in the 326th spot. He’s also the 842nd-wealthiest person on Forbes’ list of global billionaires today. 

New Mountain Finance Corp. (NMFC)

Source: Shutterstock

New Mountain Finance Corp. (NASDAQ:NMFC) is a business development company (BDC) that provides direct lending solutions to U.S. upper-middle market companies backed by private equity sponsors. 

The businesses it invests in are companies with annual EBITDA of between $10 million and $200 million, with strong growth profiles in all economic cycles. The BDC is externally managed by New Mountain Finance Advisors BDC LLC, a wholly-owned subsidiary of New Mountain Capital, an alternative asset manager with more than $50 billion in assets under management. 

New Mountain Finance finished 2023 with an investment portfolio of $3.03 billion and a weighted average yield to maturity of 10.9%. It had investments with 111 portfolio companies as of Dec. 31, 2023. The current loan-to-value ratio with these companies is 42%, providing NMFC with a reasonable margin of safety. Since NMFC’s IPO in May 2011, it’s delivered an annualized cash-on-cash return of 10% for shareholders, paying out more than $1.2 billion in dividends.  

New Mountain Capital was founded by Steve Klinsky in 1999. Today, it invests its assets under management in three areas: private equity, credit and net lease, which acquires operationally critical real estate from private equity-backed companies. 

Klinsky’s net worth, according to the Forbes 400, is $3.6 billion. That puts him in the 314th spot. He’s also the 900th-wealthiest person on Forbes’ real-time list of global billionaires. NMFC currently yields 10.1%, making it an attractive option for Forbes 400 stocks, even if you hadn’t heard of it before now. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Go Source