In this article, we discuss 10 stocks to buy now according to Joshua Pearl’s Hickory Lane Capital Management. If you want to skip our detailed analysis of Pearl’s history, investment philosophy, and hedge fund performance, go directly to 5 Stocks to Buy Now According to Joshua Pearl’s Hickory Lane Capital Management.
Hickory Lane Capital Management is an equity hedge fund that Joshua Pearl started in July 2020. Presently, he is the chief investment officer at the hedge fund. In 2003, Joshua Pearl graduated from Indiana University’s Kelley School of Business with a B.S. in Business. He was the managing director and partner at Brahman Capital, an equities long/short firm, from 2011 until 2020. As a director at UBS Investment Bank, Joshua Pearl arranged high yield financings, leveraged buyouts, and restructurings. Before joining UBS, he worked at Moelis & Company and Deutsche Bank as an investment banker. He is the co-author of Investment Banking: Valuation, LBOs, M&A, and IPOs, as well as The Little Book of Investing Like the Pros. Using a fundamentals-based strategy, he concentrates on equities investments and unusual situations.
Joshua Pearl’s Hickory Lane Capital Management had a $187.98 million asset portfolio in the fourth quarter of 2021, up from $177.12 million a quarter earlier. It focuses on information technology, utilities and telecommunications, materials, industrials, finance, consumer discretionary, and communications. The top ten equities held by Hickory Lane Capital Management account for 42.28% of the total 13F holdings. It bought 5 new stocks and sold 5 others in the fourth quarter of 2021.
Joshua Pearl’s most notable stocks in Q4 2021 include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA), among others discussed below.
10. The Home Depot, Inc. (NYSE:HD)
Hickory Lane Capital Management’s Stake Value: $5,914,000
Percentage of Hickory Lane Capital Management’s 13F Portfolio: 3.14%
Number of Hedge Fund Holders: 68
The Home Depot, Inc. (NYSE:HD) is a retailer of home improvement products. Tom Gayner’s Markel Gayner Asset Management is the leading stakeholder of The Home Depot, Inc. (NYSE:HD), with a stake worth $275.38 million.
Piper Sandler analyst Peter Keith cut his price objective on The Home Depot, Inc. (NYSE:HD) from $342 to $314 on April 7 and maintained a Neutral rating on the stock. According to the analyst, the collapse of the stay-at-home bubble is posing difficulties to consumer spending. As a result, he lowered his 2022 forecasts and pricing targets for home improvement companies.
By the end of the fourth quarter of 2021, Joshua Pearl’s Hickory Lane Capital Management bought 14,250 shares of The Home Depot, Inc. (NYSE:HD) valued at $5.91 million. According to Insider Monkey’s Q4 database, 68 hedge funds held The Home Depot, Inc. (NYSE:HD) in their public stock portfolios, up from 58 funds in the third quarter.
In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA), The Home Depot, Inc. (NYSE:HD) is one of the stocks to buy now according to Joshua Pearl’s Hickory Lane Capital Management.
In its first-quarter 2022 investor letter, Ensemble Capital, an investment management firm, mentioned The Home Depot, Inc. (NYSE:HD) and discussed its stance on the company. Here is what the fund said:
“Home Depot (7.7% weight in the Fund): The demand surge for remodeling and home improvement goods sparked by shelter in place orders, remote work going mainstream, and a shortage of homes on the market to buy, ran headlong into the supply chain crisis, triggering surging prices in the products Home Depot sells. But the company has been able to pass nearly all of these increased costs on to customers, with revenue growing 37% over the past two years while gross profits, or the profits the company makes on each item they sell, increased by 35%. Even this small difference appears to be due not to inflation eating away at Home Depot’s profits, but rather be a function of the huge increase in revenue the company has been generating in low margin lumber sales.”
9. Uber Technologies, Inc. (NYSE:UBER)
Hickory Lane Capital Management’s Stake Value: $5,975,000
Percentage of Hickory Lane Capital Management’s 13F Portfolio: 3.17%
Number of Hedge Fund Holders: 153
Uber Technologies, Inc. (NYSE:UBER) is a mobility and ride-sharing company based in New York City. By the end of the fourth quarter, Hickory Lane Capital Management held 142,500 shares of Uber Technologies, Inc. (NYSE:UBER), worth $5.98 million, representing 3.17% of the investment firm’s portfolio. The hedge fund increased its stake in Uber Technologies, Inc. (NYSE:UBER) by 36% in the fourth quarter.
According to Insider Monkey’s fourth-quarter database, 153 hedge funds were bullish on Uber Technologies, Inc. (NYSE:UBER), with stakes amounting to $ 10.67 billion, compared to 143 funds in the prior quarter, holding stakes in the company valued at $10.77 billion.
Morgan Stanley analyst Brian Nowak decreased his price objective on Uber Technologies, Inc. (NYSE:UBER) to $68 from $72 on April 25 and reiterated an Overweight rating on the stock. Nowak’s revised target mirrored multiple peer reduction, but it still offered a potential upside of roughly 120%.
Here is what ClearBridge Large Cap Growth Strategy has to say about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2021 investor letter:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
8. Marriott Vacations Worldwide Corporation (NYSE:VAC)
Hickory Lane Capital Management’s Stake Value: $5,999,000
Percentage of Hickory Lane Capital Management’s 13F Portfolio: 3.19%
Number of Hedge Fund Holders: 26
Marriott Vacations Worldwide Corporation (NYSE:VAC) is a global vacation corporation that offers vacation ownership, exchange, rental, and resort and property management services, as well as other connected companies, goods, and services.
Marriott Vacations (NYSE:VAC) declared a quarterly dividend of $0.62 per share on February 22, up 14.8% from the previous payout of $0.54. Out of the hedge funds being tracked by Insider Monkey, Rima Senvest Management is the most significant stakeholder of Marriott Vacations Worldwide Corporation (NYSE:VAC), with 1.37 million shares worth $230.67 million.
By the end of the fourth quarter of the previous, Joshua Pearl’s Hickory Lane Capital Management owned 35,500 shares of the company. These shares are worth $6 million, representing 3.19% of the investment firm’s overall portfolio. Furthermore, out of the 924 hedge funds polled by Insider Monkey by the end of the fourth quarter of 2021, 26 held a stake in Marriott Vacations (NYSE:VAC), up from 23 funds in the preceding quarter.
Baron Funds, in its second quarter 2021 investor letter, mentioned Marriott Vacations (NYSE:VAC). Here is what the fund said:
“Marriott Vacations Worldwide Corp.: Marriott Vacations is a leading owner, operator, and developer of real estate timeshare resorts. With the company’s 100% focus on leisure travelers, we believe Marriott Vacations is ideally positioned for a robust travel recovery as more and more people are vaccinated. We believe the long-term growth prospects for Marriott Vacations are compelling and the shares remain attractively valued.”
7. Charter Communications, Inc. (NASDAQ:CHTR)
Hickory Lane Capital Management’s Stake Value: $6,520,000
Percentage of Hickory Lane Capital Management’s 13F Portfolio: 3.46%
Number of Hedge Fund Holders: 73
On April 19, Barton Crockett, a Rosenblatt analyst, initiated coverage of Charter Communications, Inc. (NASDAQ:CHTR), maintaining a Buy rating and a $732 price target. Charter Communications, Inc. (NASDAQ:CHTR), on April 29, posted earnings for the first quarter. The reported EPS came in at $6.90, beating estimates by $0.24. Revenue over the period gained 5.4% compared to the previous year’s quarter, reaching $13.2 billion.
Under the Spectrum brand, Charter Communications, Inc. (NASDAQ:CHTR) delivers broadband cable TV, internet, and telephony services to more than 26 million home and corporate customers in the United States. Joshua Pearl owned approximately 10,000 Charter Communications, Inc. (NASDAQ:CHTR) shares in Q4 2021, worth $6.52 million.
Chris Hohn’s TCI Fund Management is the leading Charter Communications, Inc. (NASDAQ:CHTR) stakeholder as of Q4 2021, with approximately 9.80 million shares worth $6.39 billion. Overall, Charter Communications, Inc. (NASDAQ:CHTR) was found in the stock portfolios of 73 elite hedge funds tracked by Insider Monkey. These stakes were worth a total of $16.59 billion.
ClearBridge Investments, an investment management firm, in its first quarter 2021 investor letter, mentioned Charter Communications, Inc. (NASDAQ:CHTR). Here is what the fund said:
“We also added to Charter Communications (NASDAQ:CHTR), a historically strong performer that has faced headwinds recently due to a deceleration in broadband subscriber growth following a period of robust results during the pandemic.”
6. Amazon.com, Inc. (NASDAQ:AMZN)
Hickory Lane Capital Management’s Stake Value: $6,669,000
Percentage of Hickory Lane Capital Management’s 13F Portfolio: 3.54%
Number of Hedge Fund Holders: 279
Amazon.com, Inc. (NASDAQ:AMZN) is a company that sells consumer goods and subscriptions online in North America and across the world. Truist analyst Youssef Squali cut his price target on Amazon.com, Inc. (NASDAQ:AMZN) from $4,000 to $3,500 on April 29, but maintained a Buy recommendation on the stock. According to the analyst, Amazon will have a “difficult phase” in Q2 as eCommerce demand normalizes and cost limits become obvious.
By the end of the fourth quarter of 2021, 279 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), having stakes worth more than $49.16 billion. Of these, Fisher Asset Management was the leading hedge fund, owning 2.1 million shares of Amazon.com, Inc. (NASDAQ:AMZN), which amounted to $7.22 billion.
Joshua Pearl trimmed his Amazon.com, Inc. (NASDAQ:AMZN) stake by 20% in Q4 2021, holding shares worth $6.67 million, representing 3.54% of his fund’s total 13F portfolio. The fund first bought a stake in Amazon.com, Inc. (NASDAQ:AMZN) in the fourth quarter of 2020.
Like Microsoft Corporation (NASDAQ:MSFT) and NVIDIA Corporation (NASDAQ:NVDA), Amazon.com, Inc. (NASDAQ:AMZN) is a notable stock in Joshua Pearl’s Hickory Lane Capital Management Q4 portfolio.
Here is what Farrer Wealth Advisors has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon: We had a medium-sized position in Amazon which we exited after the company released its earnings. We thought earnings on aggregate were just fine and were especially impressed to see AWS (Amazon Web Services) start to reaccelerate its growth, up nearly 40% yoy. However, looking beneath the hood a little bit, we noticed a significant slowdown in the 1P and 3P ecommerce businesses that enjoyed a nice covid-bump in previous quarters. The international business also saw negative yoy growth as the covid bump deflated and competition heat up in markets such as Southeast Asia, Latin America, and India. None of these issues individually were a huge cause for concern, but they did force us to lower our internal projections. Given this, we felt the internal rate of return (“IRR”) baked into the price post-earnings was not particularly attractive given other opportunities available, and so, we exited the position. None of this is to say that Amazon is in any trouble, and we believe current investors will do just fine over time. We remain big fans of the companies and think Prime and AWS may be some of the best businesses ever created, so we reserve the right to buy back the position at cheaper valuations (or at a higher potential IRR).”
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Disclosure: None. 10 Stocks to Buy According to Joshua Pearl’s Hickory Lane Capital Management is originally published on Insider Monkey.
