10 Stocks to Buy According to Teresa Barger’s Cartica Management

Published on October 17, 2022 at 9:06 am by Ruchi Gupta in Hedge Funds, News

In this article, we discuss 10 stocks to buy according to Teresa Barger’s Cartica Management. If you want to skip our detailed analysis of Barger’s investment philosophy and performance, go directly to 5 Stocks to Buy According to Teresa Barger’s Cartica Management.

In 2009, Teresa Barger cofounded Cartica Management, an alternative asset manager focused on investing in emerging markets, where she presently holds the position of CEO. Before that, she worked with the International Finance Corporation for 21 years, investing in enterprises in emerging markets on almost every continent. Ms. Barger completed her MBA from Yale School of Management and her Bachelor of Arts from Harvard College. Ms. Barger also pursued postgraduate studies at the American University in Cairo.

Cartica Management is a hedge fund that only invests in emerging countries and is primarily owned and run by women. The hedge fund manages a focused portfolio of high-quality developing market enterprises for several of the world’s top institutional investors. Its guiding principle is to actively interact with the management of every portfolio company to look for ways to increase the value of ESG and related aspects. Cartica Management was awarded the Best ESG Active Investor Emerging Markets 2021 at the Capital Finance International (CFI) awards.

Cartica Management has consistently maintained a heavily concentrated portfolio, often with no more than 20 positions. According to the fund’s most recent 13F filing with the SEC as of the end of June, it only had investments in 16 firms, with an aggregate market value of $257.66 million. Cartica Management’s most notable stock picks included Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), MercadoLibre, Inc. (NASDAQ:MELI), and Alibaba Group Holding Limited (NYSE:BABA).

Image by Sergei Tokmakov Terms.Law from Pixabay

Our Methodology

Here are 10 stocks to buy according to Teresa Barger’s Cartica Management. These equities were chosen from Barger’s Q2 portfolio. Insider Monkey’s Q2 2022 database, which provides information on almost 900 hedge funds, was used to determine the hedge fund sentiment around the holdings.

Stocks to Buy According to Teresa Barger’s Cartica Management

10. DLocal Limited (NASDAQ:DLO.A)

Cartica Management’s Stake Value: $13,952,000

Percentage of Cartica Management’s 13F Portfolio: 5.41%

Number of Hedge Fund Holders: 17

DLocal Limited (NASDAQ:DLO.A) operates a payments platform in the United States, Europe, China, and other countries. The company’s software transforms more than 700 local payment options in emerging economies worldwide into dollars or euros.

On September 26, SMBC Nikko analyst Andrew Bauch lowered his price objective on DLocal Limited (NASDAQ:DLO.A) from $28 to $22 and downgraded the stock from ‘Neutral’ to ‘Underperform.’ Though the analyst believed DLocal Limited (NASDAQ:DLO.A) was still well-positioned to beat its rivals through the end of 2022 and into 2023, he could not foresee a method to increase estimates during that time materially.

DLocal Limited (NASDAQ:DLO.A) has featured on Cartica Management’s portfolio since the fourth quarter of 2021. In the second quarter of 2022, the hedge fund owned 531,500 shares in DLocal Limited (NASDAQ:DLO.A), worth over $13.95 million.

According to our database, the long hedge fund positions in DLocal Limited (NASDAQ:DLO.A) decreased at the end of the second quarter of 2022. 17 hedge funds were bullish on DLocal Limited (NASDAQ:DLO.A), compared to 19 funds in the previous quarter.

In addition to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), MercadoLibre, Inc. (NASDAQ:MELI), and Alibaba Group Holding Limited (NYSE:BABA), DLocal Limited (NASDAQ:DLO.A) is one of the stocks that Teresa Barger’s Cartica Management is monitoring. DLocal Limited (NASDAQ:DLO.A) stands tenth on the list of 10 stocks to buy according to Teresa Barger’s Cartica Management.

Here is what Baron Funds has to say about DLocal Limited (NASDAQ:DLO) in its Q2 2022 investor letter:

“During the quarter, we re-initiated a position in DLocal Limited (NASDAQ:DLO), as part of our fintech disruption theme. DLocal is a Uruguay-based financial technology company that facilitates cross-border and local-to-local e-commerce payments in emerging markets for global enterprise merchants. The company’s proprietary technology platform enables global merchants to connect seamlessly with millions of consumers across various geographies through a single API…. (Click here to read the full text).”

9. Despegar.com, Corp. (NYSE:DESP)

Cartica Management’s Stake Value: $15,329,000

Percentage of Cartica Management’s 13F Portfolio: 5.94%

Number of Hedge Fund Holders: 18

Despegar.com, Corp. (NYSE:DESP) is a Latin American internet travel firm. Despegar, which operates in 20 countries, offers more than 17 million clients a wide range of travel items, including airline tickets, vacation packages, hotel reservations, and other travel-related services.

On August 26, Citi analyst Joao Pedro Soares initiated coverage of Despegar.com, Corp. (NYSE:DESP), assigning a Buy rating to the stock with a $12 price target, down from $15. As local passenger loads were lower than they were in 2019, the expert said there were chances for international travel to resume in Brazil.

Based on its 13F holdings for the second quarter of 2022, Cartica Management owned 1.89 million shares of Despegar.com, Corp. (NYSE:DESP), valued at $15.33 million. Ancient Art (Teton Capital) is the biggest stakeholder of Despegar.com, Corp. (NYSE:DESP), with 3.63 million shares worth $29.41 million.

As of the end of the second quarter, 18 hedge funds in Insider Monkey’s database of 895 funds held stakes in Despegar.com, Corp. (NYSE:DESP). These stakes have a consolidated value of $112.28 million.

8. Cartica Acquisition Corp (NASDAQ:CITE)

Cartica Management’s Stake Value: $19,899,000

Percentage of Cartica Management’s 13F Portfolio: 7.72%

Number of Hedge Fund Holders: N/A

Cartica Acquisition Corp (NASDAQ:CITE) is a SPAC which currently does not have substantial operations. The company’s primary goal is to combine one or more firms through a merger, share exchange, asset acquisition, share purchase, reorganization, or a similar combination. In addition, it plans to locate and conclude a corporate merger in India’s technology industry.

The hedge fund managed by Teresa Barger owned 1.98 million shares in Cartica Acquisition Corp (NASDAQ:CITE), worth over $19.90 million, representing 7.72% of its Q2 portfolio. Cartica Management is the leading shareholder of Cartica Acquisition Corp (NASDAQ:CITE). Next on the list is Saba Capital, which owns 1.98 million shares of Cartica Acquisition Corp (NASDAQ:CITE), worth over $19.85 million.

7. Fabrinet (NYSE:FN)

Cartica Management’s Stake Value: $20,458,000

Percentage of Cartica Management’s 13F Portfolio: 7.94%

Number of Hedge Fund Holders: 19

Fabrinet (NYSE:FN) provides precision optical, electro-mechanical, and electronic manufacturing services throughout North America, the Asia-Pacific, and Europe. The hedge fund chaired by Teresa Barger held 252,254 shares in Fabrinet (NYSE:FN), worth over $20.46 million in Q2 2022. It is the seventh-largest holding of Cartica Management.

DZS Inc. (NASDAQ:DZSI), a tech company located in Plano, established a collaboration with Fabrinet (NYSE:FN) on October 6. DZS will be able to concentrate on innovation across its access and optical edge technologies as well as cloud software solutions because of the partnership. Following the collaboration news, Northland analyst Tim Savageaux increased his price target on Fabrinet (NYSE:FN) to $132.50 from $125 and reiterated an ‘Outperform’ rating on the shares.

Fabrinet (NYSE:FN) was in 19 hedge fund portfolios at the end of the second quarter of 2022. There were 21 hedge funds in our database with Fabrinet (NYSE:FN) holdings at the end of the previous quarter.

Here is what FPA Queens Road has to say about Fabrinet (NYSE:FN) in its Q4 2021 investor letter:

“Fabrinet, a manufacturer of optical communications sensors and equipment, announced better-thanexpected results on increased demand for its telecom and datacom products, despite continuing supply chain disruptions. While supply chain issues had a significant impact on the company’s automotive business, it was less than expected (automotive is a small but growing market for the company). We are impressed by the company’s execution and held a 3.4% position at quarter end.”

6. Sea Limited (NYSE:SE)

Cartica Management’s Stake Value: $20,731,000

Percentage of Cartica Management’s 13F Portfolio: 8.04%

Number of Hedge Fund Holders: 65

Sea Limited (NYSE:SE) operates in Southeast Asia, Latin America, and the rest of Asia, engaged in e-commerce, digital entertainment, and digital financial services. On August 18, Jiong Shao, an analyst at Barclays, cut his price objective on Sea Limited (NYSE:SE) from $125 to $114 while maintaining an ‘Overweight’ rating on the stock. The analyst claimed that given how uncertain several macroeconomic factors such as inflation and currency had grown, management’s decision to revoke Shopee’s fiscal 2022 revenue prediction was “reasonable.”

Hedge fund sentiment reduced for Sea Limited (NYSE:SE) recently. At the close of Q2 2022, Insider Monkey found 65 hedge funds that were long Sea Limited (NYSE:SE), down from 77 funds in the previous quarter. Tiger Global Management is the leading shareholder of Sea Limited (NYSE:SE), with a position worth over $548.08 million.

Along with Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), MercadoLibre, Inc. (NASDAQ:MELI), and Alibaba Group Holding Limited (NYSE:BABA), Sea Limited (NYSE:SE) is one of the stocks on the radar of Teresa Barger’s Cartica Management. Cartica Management bought an additional 70,000 shares of Sea Limited (NYSE:SE) in the second quarter of 2022, increasing its stake by about 30%. At the end of the June quarter, the hedge fund held 310,071 shares of Sea Limited (NYSE:SE), worth about $20.73 million, representing 8.04% of its portfolio.

Here is what Baron Funds had to say about Sea Limited (NYSE:SE) in its Q1 2022 investor letter:

“Sea Limited, a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long- term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”

Click to continue reading and see 5 Stocks to Buy According to Teresa Barger’s Cartica Management.

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Published on October 30, 2024 at by Inan Dogan, PhD

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Published on September 27, 2024 at by Insider Monkey Staff

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