In this article, we discuss the 10 tech stock picks of Seth Wunder’s Black-And-White Capital based on Q2 holdings of the fund. If you want to skip our detailed analysis of Wunder’s history, investment philosophy, and hedge fund performance, go directly to the 5 Tech Stock Picks of Seth Wunder’s Black-And-White Capital.
Seth Wunder is the portfolio manager of Black-And-White Capital, which he started in May 2016. He was also a founding partner at Contour Asset Management LLC and Tracer Capital Management LLC. Mr. Wunder was a member of the investing team of Brummer & Partners. He also worked as an analyst at Morgan Stanley Investment Management and Oppenheimer Funds. Mr. Wunder graduated from Cornell University with a B.S. degree in Applied Economics and Business Management.
Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), and Zoom Video Communications, Inc. (NASDAQ:ZM) were among the top holdings in Black-And-White Capital’s investment portfolio at the end of the second quarter of 2021.
The hedge fund, however, reduced its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 9% from the first quarter of 2021, and currently owns 16,790 shares worth $57.76 million. Cowen analyst John Blackledge lowered his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $4300 from $4400 and kept an “Outperform” rating on the shares.
Seth Wunder’s Black-And-White Capital began building its stake in Facebook, Inc. (NASDAQ:FB) in the first quarter of 2021. Though the hedge fund sold 150,200 shares of Facebook, Inc. (NASDAQ:FB) in the second quarter, it still owns 83,100 shares of the company.
Black-And-White Capital also has an $18.66 million stake in Zoom Video Communications, Inc. (NASDAQ:ZM), a cloud-based video conferencing platform.
Source: Pexels
Why is it important to keep an eye on hedge funds’ stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Keeping all these points in mind, let’s start our list of the 10 tech stock picks of Seth Wunder’s Black-And-White Capital. We used Wunder’s 13F portfolio for Q2 2021 for this analysis.
Tech Stock Picks of Seth Wunder’s Black-And-White Capital
10. International Game Technology PLC (NYSE:IGT)
Black-And-White Capital’s Stake Value: $24,207,000
Percentage of Black-And-White Capital’s 13F Portfolio: 2.5%
Number of Hedge Fund Holders: 32
The hedge fund holds more than 1.01 million shares in International Game Technology PLC (NYSE:IGT) worth $24.21 million, representing 2.5% of their portfolio. In addition, the hedge fund has increased its stake in the firm by 16% in the second quarter of 2021.
International Game Technology PLC (NYSE:IGT) recently saw a decrease in hedge fund sentiment. The number of long hedge fund positions declined to 32 at the end of the second quarter compared to 37 positions in the previous quarter.
9. Elastic N.V. (NYSE:ESTC)
Black-And-White Capital’s Stake Value: $26,018,000
Percentage of Black-And-White Capital’s 13F Portfolio: 2.68%
Number of Hedge Fund Holders: 55
Elastic N.V. (NYSE:ESTC) is a search firm that specializes in self-managed and SaaS solutions for search, logging, security, observability, and analytics.
In October, Elastic N.V. (NYSE:ESTC) purchased Optimyze, a continuous profiling platform for infrastructure, applications, and services.
In its second-quarter 2021 investor letter, Greenhaven Road Capital mentioned Elastic N.V. (NYSE:ESTC). Here is what the fund said:
“Our top five holdings represent more than half of our total long exposure and therefore five greatly influence overall returns. Elastic Software (ESTC) – Management continues to innovate and execute, rolling out new products and converting existing users from free to paid versions. They made adjustments to their licensing agreements, making it more difficult for Amazon to rip them off, and provided forward guidance that convinced investors that the growth train will continue to run for at least a few more years.”
8. Avalara, Inc. (NYSE:AVLR)
Black-And-White Capital’s Stake Value: $28,477,000
Percentage of Black-And-White Capital’s 13F Portfolio: 2.94%
Number of Hedge Fund Holders: 29
Avalara, Inc. (NYSE:AVLR) and its subsidiaries provide cloud-based transaction tax compliance solutions worldwide. Seth Wunder’s hedge fund owns 176,000 shares of the company, worth over $28.48 million.
Berenberg analyst Andrew DeGasperi initiated coverage of Avalara with a “Buy” rating and gave a price target of $200.
Robert W. Koehn’s Ivy Lane Capital is Avalara, Inc.’s (NYSE:AVLR) most significant stakeholder, with 121,000 shares worth $19.58 billion.
Along with Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), and Zoom Video Communications, Inc. (NASDAQ:ZM), Avalara, Inc. (NYSE:AVLR) is one of the tech stock picks of Seth Wunder’s Black-And-White Capital.
In its second-quarter 2021 investor letter, ClearBridge Investments mentioned Avalara, Inc. (NYSE:AVLR). Here is what the fund said:
“Also within IT, we purchased shares of Avalara, a software maker providing cloud-based solutions for transaction tax compliance across global markets. Avalara supports the growth of ecommerce by addressing the complexities of tax calculations and return processing across different tax jurisdictions. Growth drivers include partnerships with Shopify and integration of its software into Adobe and Salesforce platforms.”
7. Facebook, Inc. (NASDAQ:FB)
Black-And-White Capital’s Stake Value: $28,895,000
Percentage of Black-And-White Capital’s 13F Portfolio: 2.98%
Number of Hedge Fund Holders: 266
In the second quarter, Seth Wunder’s Black-And-White Capital reduced its position in Facebook, Inc. (NASDAQ:FB) by 65% to 83,100 shares, accounting for just over 2.98% of the overall portfolio. Overall, hedge funds are loading up on Facebook, Inc. (NASDAQ:FB), as 266 out of 873 funds tracked by Insider Monkey held stakes in the company, compared to 257 funds a quarter earlier.
First Eagle Investment Management, in its second-quarter 2021 investor letter, mentioned Facebook, Inc. (NASDAQ:FB). Here is what the fund said:
“Leading contributors in the First Eagle Global Fund this quarter included Facebook, Inc. Class A. Facebook has continued to post impressive results for both revenue and active users of its traditional platforms. In the meantime, the social media giant continues to make progress on new initiatives—like Facebook Horizon (virtual reality) and Facebook Shops (e-commerce)—and maintains attractive monetization optionality around services like Messenger and WhatsApp.”
6. Western Digital Corporation (NASDAQ:WDC)
Black-And-White Capital’s Stake Value: $40,709,000
Percentage of Black-And-White Capital’s 13F Portfolio: 4.2%
Number of Hedge Fund Holders: 57
In the second quarter, Black-And-White Capital sold 327,500 shares of Western Digital Corporation (NASDAQ:WDC) stock; the hedge fund still holds 572,000 shares worth about $40.71 million.
Western Digital Corporation (NASDAQ:WDC) shares have offered investors returns of 36.02% in the past 12 months. Still, Goldman Sachs analyst Toshiya Hari reiterated a bearish outlook on the company. As a result, he downgraded Western Digital to “Neutral” from “Buy” and lowered his price target to $62, down from $91. According to the analyst, the company’s better competitive position in nearline HDD and enterprise SSD will be more than offset by cyclical issues in the NAND sector.
Out of the hedge funds being tracked by Insider Monkey, Stamford-based investment firm Point72 Asset Management is a leading shareholder in Western Digital Corporation (NASDAQ:WDC) with 5.81 million shares worth more than $413.64 million.
ClearBridge Investments, in its first-quarter 2021 investor letter, mentioned Western Digital Corporation (NASDAQ:WDC). Here is what the fund said:
“Our high active share approach made the most difference in IT, where the portfolio’s holdings gained 4.5% compared to a loss for the benchmark. Results were led by our more cyclical positions in digital storage provider Western Digital.”
Click to continue reading and see 5 Tech Stock Picks of Seth Wunder’s Black-And-White Capital.
Suggested articles:
- Billionaire Daniel Sundheim is Buying These 10 Tech Stocks
- 10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors
- 15 Biotech Stocks to Buy Now According to Srini Akkaraju and Michael Dybbs’ Samsara BioCapital
Disclosure: None. 10 Tech Stock Picks of Seth Wunder’s Black-And-White Capital is originally published on Insider Monkey.
