In this article, we discuss the 10 best growth stocks to buy according to Mark Moore’s ThornTree Capital. You can skip our detailed analysis of the hedge fund, and go directly to see the 5 Best Growth Stocks to Buy According to Mark Moore’s ThornTree Capital.
ThornTree Capital Partners is an investment management hedge fund that offers advisory services to investors around the globe. Along with this, the firm specializes in financial planning, asset allocation, and risk tolerance, providing related services for over six years. ThornTree Capital was founded by Mark Moore, who is currently serving as the managing partner and Chief Investment Officer of the firm.
Before founding his hedge fund, Mark Moore earned an MBA degree from Harvard Business School. His investment strategy revolves around developing a concentrated portfolio, consisting of long and short equity investments. His hedge fund aims to generate risk-adjusted returns. Moreover, the fund invests in companies listed on both U.S. and non-U.S. exchanges, with a portion allocated to private companies.
As of Q3 2021, ThornTree Capital’s 13F portfolio had a value of over $707.8 million. The hedge fund invested heavily in technology, services, and others. Technology remained the heaviest sector, accounting for 40.9% of the fund’s 13F portfolio. As the hedge fund focused on large-cap companies, the average market cap of the holdings in the portfolio is approximately $24.8 billion. Some of the notable companies included in ThornTree Capital’s portfolio in Q3 are Meta Platforms, Inc. (NASDAQ:FB), Etsy, Inc. (NASDAQ:ETSY), Palantir Technologies Inc. (NYSE:PLTR), and Cloudflare, Inc. (NYSE:NET). In this list, we will focus on the growth stocks in the hedge fund’s portfolio.
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Our Methodology:
Let’s analyze our list of the best growth to buy according to Mark Moore’s ThornTree Capital. For this list, we have considered ThornTree Capital’s 13F portfolio as of Q3.
10 Best Growth Stocks to Buy According to Mark Moore’s ThornTree Capital
10. Qualtrics International Inc. (NASDAQ:XM)
Number of Hedge Fund Holders: 26
Qualtrics International Inc. (NASDAQ:XM) is an American software company that provides services in experience management. Recently, the company has announced the opening of its headquarters in Japan in response to the increasing demand for its experience management technologies.
Qualtrics International Inc. (NASDAQ:XM) started trading at $15.02 per share in 2016, reaching $33.88 per share in 2021, gaining 125.5% in the past five years. Mark Moore’s ThornTree Capital started investing in Qualtrics International Inc. (NASDAQ:XM) in the first quarter of 2021, and the company now represents 1.59% of the hedge fund’s 13F portfolio. Recently, Deutsche Bank set a $48 price target on the stock, while keeping a Buy rating on the shares.
At the end of Q3, 26 hedge funds in Insider Monkey’s database reported owning a roughly $1.7 billion worth of stake in Qualtrics International Inc. (NASDAQ:XM). In the previous quarter, 37 hedge funds held positions in the company, valued at $2.4 billion.
Like Meta Platforms, Inc. (NASDAQ:FB), Etsy, Inc. (NASDAQ:ETSY), Palantir Technologies Inc. (NYSE:PLTR), and Cloudflare, Inc. (NYSE:NET), Qualtrics International Inc. (NASDAQ:XM) is also popular among growth investors.
ClearBridge Investments mentioned Qualtrics International Inc. (NASDAQ:XM) in its Q2 2021 investor letter. Here is what the firm has to say:
“On the sell side, we closed out of Qualtrics, an experience management software company, where we were unable to build a sufficient position following its successful IPO.”
9. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 35
Insider Monkey’s data for Q3 showed a positive hedge fund sentiment for Palantir Technologies Inc. (NYSE:PLTR), an American software company specializing in big data analytics. As of Q3, 35 hedge funds tracked by Insider Monkey were bullish on the company, compared with 26 in the preceding quarter. These stakes hold a value of $1.63 billion, up significantly from $1.36 billion in Q2.
Palantir Technologies Inc. (NYSE:PLTR) went public in October 2020 and the stock has surged 128.5% since then, grabbing the attention of growth investors. Palantir Technologies Inc. (NYSE:PLTR) is one of the newest acquisitions of ThornTree Capital in Q3 and accounts for 3.7% of its 13F portfolio. Appreciating the company’s Q3 earnings beat, Morgan Stanley lifted its price target on the stock to $24, while keeping an Underweight rating on the shares.
With improving fundamentals and a strong balance sheet, Palantir Technologies Inc. (NYSE:PLTR) remains one of the best growth stocks to buy according to Mark Moore’s ThornTree Capital. Cathie Wood’s ARK Investment Management was the company’s leading shareholder in Q3, holding over 37.2 million shares.
Like Meta Platforms, Inc. (NASDAQ:FB), Palantir Technologies Inc. (NYSE:PLTR), and Cloudflare, Inc. (NYSE:NET), Palantir Technologies Inc. (NYSE:PLTR) is one of the most famous growth stocks in 2021.
Guardian Fund released its second-quarter 2021 investor letter and mentioned Palantir Technologies Inc. (NYSE: PLTR) in it. Here is what the firm has to say:
“The success of the private sector to innovate in order to help people through the lockdowns and to produce vaccines at record speed at scale has been impressive. The fact that almost every public institution was struggling to be effective no matter how hard some of the people worked, shows the fundamental need of the public sector to become data-driven and invest in data infrastructure.
Government institutions have to partner with enterprises such as Palantir to become digitalnative. The public sector will always struggle to attract the most talented engineers as compensations cannot be justified with tax money and therefore this must be a partnership with specialized private enterprises. This is a great opportunity for Palantir especially as it has already shown to be capable of working with demanding and complex public institutions entrusting it to work on the most critical and sensitive matters.
The news section of Palantir’s website gives insight in where new business is coming from. The main opportunity is in enterprise software and the faster onboarding time and increased self-service of clients is a positive sign. We believe Palantir is becoming one of the more important global software companies.
In addition, Palantir has quietly become a significant investor, investing well over USD 200 million in eight companies. Thereby, it is following the lead of companies like Tencent, Alphabet, and Shopify of establishing valuable investment portfolios.”
8. Affirm Holdings, Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders: 39
ThornTree Capital started building its position in Affirm Holdings, Inc. (NASDAQ:AFRM), an American loan company, in Q1 of 2021, with shares worth $53.6 million. Currently, the hedge fund holds a stake worth $65.2 million in the company, which constitutes 9.22% of the hedge fund’s 13F portfolio in Q3.
Amongst the hedge funds, Melvin Capital Management was the largest shareholder of Affirm Holdings, Inc. (NASDAQ:AFRM) in Q3, owning 3.2 million shares. Overall, 39 hedge funds in Insider Monkey’s database held positions in the company, up from 25 in the previous quarter. The consolidated value of these stakes is roughly $1.5 billion, up from $823.6 million in Q2.
Recently, both Mizuho and BofA lifted their price targets on Affirm Holdings, Inc. (NASDAQ:AFRM) to $180 and $191, respectively, while both maintained a Buy rating on the shares. In Q3, the company reported a 124% growth in its active consumers at 8.7 million.
7. Splunk Inc. (NASDAQ:SPLK)
Number of Hedge Fund Holders: 47
Splunk Inc. (NASDAQ:SPLK) is an American software company whose web-based application software collects and analyzes machine data generated by websites.
Splunk Inc. (NASDAQ:SPLK) is one of the latest holdings of ThornTree Capital in Q3 and constitutes 2.46% of the hedge fund’s 13F portfolio. In 2016, the stock was traded at around $53.6 per share and jumped to $124.8 per share in 2021, gaining 132.5% in the past five years. Phil Winslow, an analyst at Credit Suisse, expects Splunk Inc. (NASDAQ:SPLK) to grow its recurring revenue by 25% to 30% annually. The analyst initiated coverage on the stock in November with an Outperform rating and a $225 price target.
In Q3, 47 hedge funds tracked by Insider Monkey were bullish on Splunk Inc. (NASDAQ:SPLK), the same as in the previous quarter. These stakes are valued at $1.25 billion, up from $1.18 billion in Q2.
Miller Value Partners mentioned Splunk Inc. (NASDAQ:SPLK) in its Q2 2021 investor letter. Here is what the firm has to say:
“Our largest new position is Splunk Inc. (SPLK$138.373). Splunk typifies one of our favorite types of opportunities: a company well positioned secularly that is facing short-term business pressures. We believe there’s the opportunity to profit as the business normalizes and then compound capital beyond that. SPLK is a leading provider of security software, a growing market due to exploding cyber threats.
Splunk is in the middle of a multi-year business model transition that has negatively impacted financials and increased uncertainty. We believe we are finally past the worst of the transition with revenues troughing in FY2020. We expect the company to return to positive free cash flow generation in the second half of this year.
SPLK trades at half the multiple of comparables. We believe that gap will close as the market gets more certainty that the transition is working. The stock recently jumped on the announcement that Silver Lake, an excellent tech investor, invested $1B in a convertible senior note and the company announced a $1B repurchase authorization. We believe the stock is worth well more than its old high (~$2204) creating significant upside potential for those patient enough to hold through the transition.”
6. Etsy, Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 47
Etsy, Inc. (NASDAQ:ETSY), an American e-commerce company, makes it to our list of the best growth stocks to buy now according to Mark Moore’s ThornTree Capital, as the stock surged 2,363% in the past five years. Since the start of 2021, Etsy, Inc. (NASDAQ:ETSY) gained 45%.
Of the 867 hedge funds tracked by Insider Monkey, 47 hedge funds held stakes in Etsy, Inc. (NASDAQ:ETSY) in Q3, the same as in the previous quarter. The total value of these stakes is over $1.43 billion. Among these hedge funds, Citadel Investment Group was the company’s largest shareholder in Q3, owning roughly 1.4 million shares.
In Q3, ThornTree Capital owns an $11.6 million worth of stake in Etsy, Inc. (NASDAQ:ETSY), which accounts for 1.63% of the hedge fund’s 13F portfolio. The fund has been investing in the company since Q3 of 2018. Recently, Wedbush presented a positive outlook on Etsy, Inc. (NASDAQ:ETSY) as the company managed to sustain growth during the pandemic. The firm lifted its price target on the stock to $310, while keeping an Outperform rating on the shares.
Like Meta Platforms, Inc. (NASDAQ:FB), Palantir Technologies Inc. (NYSE:PLTR), and Cloudflare, Inc. (NYSE:NET), Etsy, Inc. (NASDAQ:ETSY) is also favored by investors and analysts in 2021.
Polen Capital mentioned Etsy, Inc. (NASDAQ:ETSY) in its Q1 2021 investor letter. Here is what the investment management firm has to say:
“Etsy continued to be a top contributor in the Portfolio during the first quarter. Etsy experienced record levels of demand in 2020. Throughout the beginning of this year, the business has continued to see accelerated growth trends. The company’s recently announced fourth quarter results provided numerous data points that highlight Etsy’s success in both broadening and deepening the relationship it has with buyers and sellers on its platform. In fact, Etsy now stands as the fourth largest e commerce site in the U.S. Repeat buyers have grown nearly 100% year-over-year, despite mask sales, which grew rapidly at the onset of the pandemic, shrinking to less than 5% of sales.
We continue to believe Etsy remains in the early stages of growing out its platform.
We remain confident in its ability to compound its value for shareholders at an attractive rate going forward.”
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Disclosure. None. 10 Best Growth Stocks to Buy According to Mark Moore’s ThornTree Capital is originally published on Insider Monkey.
