In this article, we discuss 10 new stock picks of Brian Higgins’ King Street Capital. If you want to skip our detailed analysis of these stocks, go directly to 5 New Stock Picks of Brian Higgins’ King Street Capital.
Brian Higgins is the co-founder of King Street Capital, having established the hedge fund in 1995. He serves as the managing partner and co-portfolio manager of King Street Capital, overseeing a 13F portfolio worth $1.18 billion, in addition to assets under management valued at $21.88 billion as of the third quarter of 2021.
King Street Capital’s Q3 portfolio is focused on investments in the real estate, information technology, consumer discretionary, finance, energy, utilities, and telecommunications sectors, with a top ten holdings concentration of 54.23%.
Higgins’ firm has a primary interest in credit markets, and controls multiple funds for its clients, including two flagship funds, real estate funds, a global drawdown fund, and a tactical credit opportunity fund. King Street Capital also has extensive experience investing in collateralized loan obligations.
The most notable stocks from Brian Higgins’ King Street Capital’s third quarter portfolio include Booking Holdings Inc. (NASDAQ:BKNG), Wells Fargo & Company (NYSE:WFC), and T-Mobile US, Inc. (NASDAQ:TMUS).
Photo by Austin Distel on Unsplash
Our Methodology
We used Brian Higgins’ Q3 portfolio to select his 10 newest stock picks as of Q3 2021, ranking the companies according to his stake value in each holding.
We have mentioned important comparison metrics like Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock, so that our readers can have a better understanding of the companies.
New Stock Picks of Brian Higgins’ King Street Capital
10. Urban Outfitters, Inc. (NASDAQ:URBN)
King Street Capital’s Stake Value: $1,701,000
Percentage of King Street Capital’s 13F Portfolio: 0.14%
Number of Hedge Fund Holders: 23
Urban Outfitters, Inc. (NASDAQ:URBN), a Pennsylvania-based multinational lifestyle and fashion retail company, is one of the latest additions to Brian Higgins’ Q3 portfolio. Higgins, via King Street Capital, purchased 57,300 Urban Outfitters, Inc. (NASDAQ:URBN) shares, worth $1.70 million, representing 0.14% of the firm’s total investments as of September 2021.
Publishing its Q3 results on November 22, Urban Outfitters, Inc. (NASDAQ:URBN) posted earnings per share of $0.89, beating estimates by $0.05. The quarterly revenue jumped 16.69% year-over-year to $1.13 billion, exceeding estimates by $9.12 million.
Jefferies analyst Corey Tarlowe assumed coverage of Urban Outfitters, Inc. (NASDAQ:URBN) on November 30 with a Buy rating and a $46 price target. Due to Urban Outfitters, Inc. (NASDAQ:URBN)’s favorable store footprint, strong brands, and the scale of its e-commerce offering, the analyst is positive about the company’s long-term positioning.
A total of 23 hedge funds were bullish on Urban Outfitters, Inc. (NASDAQ:URBN) in the third quarter, down from 28 funds in the prior quarter. Samlyn Capital, the largest Urban Outfitters, Inc. (NASDAQ:URBN) stakeholder, boosted its stake in the company by 225% in Q3, holding 2.76 million shares worth $82.1 million.
Urban Outfitters, Inc. (NASDAQ:URBN) is a notable stock from Brian Higgins’ Q3 portfolio, just like Booking Holdings Inc. (NASDAQ:BKNG), Wells Fargo & Company (NYSE:WFC), and T-Mobile US, Inc. (NASDAQ:TMUS).
9. Tractor Supply Company (NASDAQ:TSCO)
King Street Capital’s Stake Value: $3,688,000
Percentage of King Street Capital’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 33
Tractor Supply Company (NASDAQ:TSCO) is an American retail store chain dealing in home improvement accessories, lawn and garden maintenance tools, pet supplies, and welding equipment, among other related products. Tractor Supply Company (NASDAQ:TSCO) is a new addition in King Street Capital’s third quarter portfolio, with the hedge fund buying 18,200 Tractor Supply Company (NASDAQ:TSCO) shares, worth $3.68 million, accounting for 0.31% of the total Q3 investments.
On October 21, Tractor Supply Company (NASDAQ:TSCO) reported earnings for Q3, posting an EPS of $1.95, beating estimates by $0.29. Revenue over the period jumped 15.78% from the preceding year quarter, totaling $3.02 billion, exceeding estimates by $160.32 million.
Gordon Haskett analyst Chuck Grom on November 11 upgraded Tractor Supply Company (NASDAQ:TSCO) to Buy from Accumulate with a price target of $240, up from $220.
In the third quarter of 2021, 33 hedge funds in the database of Insider Monkey reported owning stakes in Tractor Supply Company (NASDAQ:TSCO), worth $1.21 billion, as compared to 38 funds in the prior quarter holding stakes valued at $1.37 billion in Tractor Supply Company (NASDAQ:TSCO).
Robert Joseph Caruso’s Select Equity Group is the biggest Tractor Supply Company (NASDAQ:TSCO) stakeholder as of Q3, with more than 3 million shares worth $621.2 million.
Here is what LRT Capital Management has to say about Tractor Supply Company (NASDAQ:TSCO) in its Q3 2021 investor letter:
“We currently have a small (approximately 3%) position in Tractor Supply (TSCO), and we wanted to give you more insight into why we own shares in this business…
In our search for truly great businesses, we look for specific qualitative and quantitative factors. What defines a great business to us is one with high returns on capital relative to its peers, growth opportunities, and a durable competitive advantage. What’s more, management’s decisions must be intelligent, and their interests must be aligned with shareholders, because management, ultimately, is the link between business value and shareholder value. We strive to buy shares only in high quality companies which we believe can compound in value for many years to come.
The COVID-19 pandemic has been a disruptive event for the retail sector. Businesses changed the way they make sales to stay alive during devastating lockdowns for commerce. Formerly novel modes of shopping, such as curb-side pickup, and delivery services have now reached the status of a new normal. Businesses that adapted quickly have benefited massively. Another consequence of the pandemic has been the migration from cities to the suburbs due to “work from home” policies which in practice mean “work from anywhere”.
City life is very expensive for most Americans. With the wider acceptance of the work-at-home culture, and in-office hybrid models, more Americans are opting to move away from the cities, while potentially keeping their big city salaries. This move allows employees to buy a larger space, likely for less money, and re-allocate their budgets with more disposable income…” (Click here to see the full text)
8. Black Spade Acquisition Co (NYSE:BSAQ)
King Street Capital’s Stake Value: $4,960,000
Percentage of King Street Capital’s 13F Portfolio: 0.41%
Number of Hedge Fund Holders: N/A
Black Spade Acquisition Co (NYSE:BSAQ) is a special purpose acquisition company that was formed with the purpose of effecting a merger, share acquisition, corporate restructuring, or a similar business combination.
Brian Higgins’ King Street Capital acquired a $4.96 million position in Black Spade Acquisition Co (NYSE:BSAQ) as of Q3 2021, which accounts for 0.41% of the fund’s total 13F securities.
In addition to Booking Holdings Inc. (NASDAQ:BKNG), Wells Fargo & Company (NYSE:WFC), and T-Mobile US, Inc. (NASDAQ:TMUS), Black Spade Acquisition Co (NYSE:BSAQ) is a notable stock to invest in according to Brian Higgins.
7. Five Below, Inc. (NASDAQ:FIVE)
King Street Capital’s Stake Value: $5,092,000
Percentage of King Street Capital’s 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 40
Five Below, Inc. (NASDAQ:FIVE) was added to King Street Capital’s portfolio in the third quarter, with the hedge fund purchasing 28,800 shares of Five Below, Inc. (NASDAQ:FIVE), worth $5.09 million, representing 0.42% of the firm’s Q3 portfolio. Five Below, Inc. (NASDAQ:FIVE) is an American discount store chain that primarily sells products priced at $5 and below.
In Q3 2021, 40 hedge funds from the database of Insider Monkey reported owning stakes in Five Below, Inc. (NASDAQ:FIVE), down from 42 funds in the prior quarter. Balyasny Asset Management is one of the leading company stakeholders, boosting its position in Five Below, Inc. (NASDAQ:FIVE) by 2395% in the third quarter, holding 512,637 shares worth $90.6 million.
Five Below, Inc. (NASDAQ:FIVE) announced on December 1 its financial results for the quarter ending October 2021. The company posted earnings per share of $0.43, exceeding estimates by $0.14. Revenue over the period totaled $607.65 million, up 27.49% year-over-year, outperforming estimates by $43.48 million.
Oppenheimer analyst Brian Nagel on December 3 raised the price target on Five Below, Inc. (NASDAQ:FIVE) to $230 from $220 and reiterated an Outperform rating on the shares. The company reported “strong, above-plan results” and pandemic-related headwinds should ease in 2022, according to the analyst.
Here is what Harding Loevner has to say about Five Below, Inc. (NASDAQ:FIVE) in their Q4 2020 investor letter:
“Throughout the year, we tried methodically to rebalance the portfolio between “stay at home” and “return to normal” whenever the market appeared too pessimistic or optimistic about the sustainability of recent, pandemic-driven trends. As the year went on, we found ourselves tilting more towards “return to normal.” We established a new position in US retailer Five Below, a discount chain built around a rather simple concept: fill nondescript big-box locations with as many as possible items priced under US$5 that can tickle the imagination of an American teen or tween. As “pre-2020” as that may sound, we were impressed by the company’s quick resumption of strong same-store sales growth after the lockdowns early in the year. Clearly, Five Below offers a value and entertainment proposition that e-commerce is not able to satisfy and which we can see ourselves “sitting” on potentially for years to come.”
6. Enact Holdings, Inc. (NASDAQ:ACT)
King Street Capital’s Stake Value: $6,031,000
Percentage of King Street Capital’s 13F Portfolio: 0.50%
Number of Hedge Fund Holders: 22
Enact Holdings, Inc. (NASDAQ:ACT), a mortgage insurance company, is one of the latest additions to Brian Higgins’ King Street Capital, with the hedge fund owning 275,000 shares of the company in the third quarter, worth $6.03 million. Enact Holdings, Inc. (NASDAQ:ACT) stock represents 0.50% of the firm’s total Q3 investments.
On November 2, Enact Holdings, Inc. (NASDAQ:ACT) posted its third quarter results. EPS for the period totaled $0.84, exceeding estimates by $0.04. The Q3 revenue equaled $279.73 million, outperforming estimates by $111,800.
Enact Holdings declared a special cash dividend of $200 million on November 15, which equals $1.23 per common share, payable on December 15 to the shareholders of record on November 26.
Citi analyst Arren Cyganovich raised the price target on Enact Holdings, Inc. (NASDAQ:ACT) on November 4 to $26 from $24 and kept a Buy rating on the shares. Enact Holdings, Inc. (NASDAQ:ACT) reported solid results in its first quarter as a public company highlighted by continued growth in insurance. The analyst expects a special dividend in Q4 and a regular quarterly dividend beginning in Q1 2022.
Of the 22 hedge funds that were long Enact Holdings, Inc. (NASDAQ:ACT) in Q3, Redwood Capital Management is the leading company stakeholder, with 1.5 million shares worth $32.8 million.
Click to continue reading and see 5 New Stock Picks of Brian Higgins’ King Street Capital.
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Disclosure: None. 10 New Stock Picks of Brian Higgins’ King Street Capital is originally published on Insider Monkey.
