In this article, we discuss the 10 best tech stocks to buy according to billionaire James Dinan. You can skip our detailed analysis of the billionaire’s hedge fund, and go directly to read the 5 Tech Stocks to Buy According to Billionaire James Dinan.
James Dinan is an American investor, philanthropist, and hedge fund manager. He founded York Capital Management in 1991 with $3.6 million and is currently working as the chairman and the managing partner of the firm. Dinan started his career as an investor at Donaldson, Lufkin & Jenrette, where he used to work as an investment banker till 1983. According to Forbes, the billionaire’s net worth stands at $1.4 billion as of October 2021. Last year, Dinan announced to shut down York Capital’s European hedge funds as his U.S. hedge fund plans to focus on internal money, while focusing on better-performing units.
York Capital Management had $16 billion in assets before the financial crisis of 2008 hit the stock market. The hedge fund suffered a loss during the financial clampdown in 2008 but bounced back with better returns in the coming years. The fund’s assets reached $26 billion in 2015. According to a report by Wall Street Journal, the management firm lost over $700 million in energy bets and has declined by 50% since 2018.
Dinan uses a multi-strategy and event-driven investment approach. According to James Dinan, activism is one of the best ways to generate profitable returns, as activists tend to invest in underperforming companies while reshaping the operations of the companies.
As of Q2 2021, York Capital invests heavily in the technology sector, representing 31.4% of the hedge fund’s 13F portfolio. Some of the famous stocks in James Dinan’s 13F portfolio include Baidu, Inc. (NASDAQ:BIDU), JOYY Inc. (NASDAQ:YY), Sea Limited (NYSE:SE), Intel Corporation (NASDAQ:INTC), and Amazon.com, Inc. (NASDAQ:AMZN).
Our Methodology:
Let’s analyze our list of the best tech stocks to buy according to billionaire James Dinan. The list is devised by taking into account York Capital’s 13F portfolio of Q2 2021.
James Dinan of York Capital Management
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10 Tech Stocks to Buy According to Billionaire James Dinan
10. StoneCo Ltd. (NASDAQ:STNE)
York Capital Management’s Stake Value: $3,452,000
Percent of York Capital Management’s 13F Portfolio: 0.38%
Number of Hedge Fund Holders: 44
StoneCo Ltd. (NASDAQ:STNE) ranks tenth on our list of the best tech stocks to buy according to billionaire James Dinan. It is a technology company that mainly provides financial technology solutions to its consumers. The company provides an end-to-end, cloud-based technology platform to conduct electronic commerce.
StoneCo Ltd. (NASDAQ:STNE) is one of the recent acquisitions of York Capital as the hedge fund bought 51,479 shares in the company in Q2 2021, worth over $3.4 million. The company accounts for 0.38% of the hedge fund’s 13F portfolio. In August, Evercore ISI rated StoneCo Ltd. (NASDAQ:STNE) as an ‘Outperform’ with an $84 price target. In Q2 2021, StoneCo Ltd. (NASDAQ:STNE) reported revenue of R$613.4 million while the company’s total payment volume reached R$60.4 billion, showcasing a 58.6% growth from the prior-year quarter.
As of Q2 2021, 44 hedge funds tracked by Insider Monkey have positions in StoneCo Ltd. (NASDAQ:STNE), up from 39 in the previous quarter. These stakes are valued at $2.73 billion.
Like Intel Corporation (NASDAQ:INTC), Amazon.com, Inc. (NASDAQ:AMZN), Baidu, Inc. (NASDAQ:BIDU), Sea Limited (NYSE:SE), and JOYY Inc. (NASDAQ:YY), StoneCo Ltd. (NASDAQ:STNE) is also famous among investors in 2021.
JDP Capital Management mentioned StoneCo Ltd. (NASDAQ:STNE) in its second-quarter 2021 investor letter. Here is what the firm has to say:
“StoneCo (NYSE: STNE) has been in our portfolio since early 2019 and has appreciated 225% since. In the first half of 2021 the stock was down nearly 20% and was a drag on the fund’s performance.
Stone is a leading fintec company in Brazil that provides back-office software, loans and other financial services to small and medium sized businesses (SMBs). We have discussed Stone in past letters and the company’s “ladder up” from a card processor to a supplier of enterprise software used to sell financial products on top of such as working capital loans.
The company generates a lot of cash that it reinvests to acquire or build new financial products for its customer base. Since we invested, the company has grown the number of SMB clients by 3x, revenue by 2.3x, and net income by 2.2×11.
The pandemic’s impact on SMBs in Brazil has been severe, especially for the many retailers who are only now adopting an e-commerce strategy. In the first half of 2021 Stone increased loss provisions on its lending product, and overall growth has slowed somewhat. The stock’s decline earlier this year was not surprising, but investors are now ignoring progress that has enhanced Stone’s position for coming out much stronger when the recovery begins.
StoneCo Q1 2021 Earnings Call: “Based on (i) our learnings with lockdowns last year, (ii) recent client transactional data and (iii) learnings from the dynamics of countries where vaccines are widespread, we expect that once vaccination scale (which we think will happen in the second half of 2021), the economic recovery will be fast and – although delayed – Brazil is moving in the right direction. For these reasons, we have made an informed decision to be ready for recovery by investing in growth…”
“…In the first quarter, we decided to increase our salesforce headcount by 24%, marketing investments by 33%, customer service and logistics headcount by 32% and technology headcount by 20% in order to be the fastest player when our economy comes back to normal levels.”
“I want to start our presentation by highlighting that Brazil went through a second wave of COVID in the first quarter of ’21, which imposed commerce restrictions in several cities throughout the country. Those restrictions were felt by our clients with average TVP reaching a low in the end of March…
…But similar to the behavior we saw in the comeback from the first lockdown in 2020, we already observed significant and quick recovery with average TPV in May achieving levels above January 2021. As Thiago mentioned, we expect that once vaccinations are scaled, the economy recovery of the country will be fast.”
In terms of COVID recovery opportunities within our portfolio, Stone might be the most “coiled” because the impact on Brazilian small businesses has been so traumatic. In addition, Stone is part of a much larger and fast-moving transition happening in Brazil around the digitalization of financial services. The speed of this transition is unique to Brazil because the Central Bank is actively trying to reduce the country’s previous dependency on a small handful of large banks. Important progress in the first half of 2021 included closing on the long-awaited acquisition of Linx, a mature provider of enterprise software with a large footprint across Brazil. The acquisition will provide Stone meaningful cross-selling opportunities and a more diversified customer base.”
9. Amazon.com, Inc. (NASDAQ:AMZN)
York Capital Management’s Stake Value: $3,753,000
Percent of York Capital Management’s 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is an American multinational technology company that focuses on cloud computing, e-commerce, and AI. The company ranks ninth on our list of the best tech stocks to buy according to billionaire James Dinan.
As of Q2 2021, York Capital Management owns 1,091 shares in Amazon.com, Inc. (NASDAQ:AMZN), valued at over $3.7 million. The company accounts for 0.42% of the hedge fund’s 13F portfolio. This September RBC Capital initiated its coverage on Amazon.com, Inc. (NASDAQ:AMZN) with an ‘Outperform’ rating and a $4,150 price target. In Q2 2021, the company reported revenue of $113.1 billion, showcasing a 27.2% year-over-year growth. In 2021, Amazon.com, Inc. (NASDAQ:AMZN) delivered a 3.09% return to shareholders.
Of the 873 hedge funds tracked by Insider Monkey, 271 hedge funds have positions in Amazon.com, Inc. (NASDAQ:AMZN) in Q2 2021, worth over $60.4 billion. The number of hedge funds having stakes in the company stood at 243 in the previous quarter.
Like Intel Corporation (NASDAQ:INTC), Baidu, Inc. (NASDAQ:BIDU), Sea Limited (NYSE:SE), and JOYY Inc. (NASDAQ:YY), Amazon.com, Inc. (NASDAQ:AMZN) is one the best stocks in James Dinan’s 13F portfolio.
8. Intel Corporation (NASDAQ:INTC)
York Capital Management’s Stake Value: $12,693,000
Percent of York Capital Management’s 13F Portfolio: 1.42%
Number of Hedge Fund Holders: 78
Intel Corporation (NASDAQ:INTC) is an American multinational technology company that specializes in the development of microprocessors for computer system companies such as HP, Dell, and Lenovo. The company stands eighth on our list of the best tech stocks to buy according to billionaire James Dinan.
As of Q2 2021, York Capital holds 226,087 shares in Intel Corporation (NASDAQ:INTC), worth over $12.6 million. The company represents 1.42% of the hedge fund’s 13F portfolio. In August, JPMorgan initiated its coverage on Intel Corporation (NASDAQ:INTC) with a ‘Buy’ rating and a $78 price target. In Q2 2021, the company posted an EPS of $1.28, beating the estimates by $0.21. For Q3, Intel Corporation (NASDAQ:INTC) expects revenue of $18.2 billion versus the estimates of $18.12 billion. In 2021, the stock gained 7.71%.
As of Q2 2021, 78 hedge funds tracked by Insider Monkey have positions in Intel Corporation (NASDAQ:INTC), compared with 83 in the previous quarter. These stakes are valued at over $6.7 billion. Fisher Asset Management is the company’s leading shareholder with shares worth $1.7 billion.
Like Amazon.com, Inc. (NASDAQ:AMZN), Baidu, Inc. (NASDAQ:BIDU), Sea Limited (NYSE:SE), and JOYY Inc. (NASDAQ:YY), investors and analysts are also paying attention to Intel Corporation (NASDAQ:INTC) in 2021.
Alger mentioned Intel Corporation (NASDAQ:INTC) in its first-quarter 2021 investor letter. Here is what the firm has to say:
“Short exposure to Intel also detracted from performance. Intel designs and manufactures semiconductors for the computing and communications industries. Intel’s proprietary intellectual strength and manufacturing prowess versus the competition is deteriorating, which is causing the company to lose market share and profit opportunities. The short position detracted from portfolio returns as the share price reacted positively to the announcement of Pat Gelsinger being hired as chief executive officer, a stronger-than-anticipated quarterly earnings report driven by unusually robust PC sales that we believe are unsustainable and the unveiling of “Intel Unleashed,” a new long-term program to help improve manufacturing and spur innovation. This program involves opening two fabrication plants in Arizona, which confirms Intel’s commitment to continue as an integrated design manufacturer. Importantly, Intel continues to experience issues with its next generation server chips which are disadvantaging Intel versus the competition.”
7. Sea Limited (NYSE:SE)
York Capital Management’s Stake Value: $21,993,000
Percent of York Capital Management’s 13F Portfolio: 2.46%
Number of Hedge Fund Holders: 104
Sea Limited (NYSE:SE) is a Singapore-based technology company that offers information technology services to its consumers. The company also provides a digital payment platform. It ranks seventh on our list of the best tech stocks to buy according to billionaire James Dinan.
As of Q2 2021, York Capital holds 80,088 shares in Sea Limited (NYSE:SE), valued at over $21.9 million. The company accounts for 2.46% of the hedge fund’s 13F portfolio. In Q2 2021, Sea Limited (NYSE:SE) reported revenue of $2.28 billion, showcasing a 158.5% growth from the prior-year quarter. Recently, DZ Bank initiated its coverage on Sea Limited (NYSE:SE) with a ‘Buy’ rating and a $400 price target. Since the beginning of the year, Sea Limited (NYSE:SE) delivered a 62.1% return to shareholders, while its 12-month returns came in at 101.7%.
Of the 873 hedge funds tracked by Insider Monkey, 104 hedge funds have positions in Sea Limited (NYSE:SE) in Q2 2021, up from 98 in the previous quarter. These stakes are valued at over $12.2 billion.
Like Intel Corporation (NASDAQ:INTC), Amazon.com, Inc. (NASDAQ:AMZN), Baidu, Inc. (NASDAQ:BIDU), and JOYY Inc. (NASDAQ:YY), Sea Limited (NYSE:SE) is also on investors’ radar in 2021.
Tao Value mentioned Sea Limited (NYSE:SE) in its second-quarter 2021 investor letter. Here is what the firm has to say:
“Sea continued to execute above expectation. The gaming business continued strong momentum, recording bookings of $1.1 billion, growing 117% y-o-y. The major franchise Free Fire showed no sign of slowing down in established ASEAN & LatAm market and received positive reception from new markets like US. On e-commerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now top downloaded e-commerce app in Brazil, almost 2x of the second-place local leader Mercado Libre (MELI). I also see the most promising development is in its FinTech business – SeaMoney, which more than doubled its revenue in Q1 2021 from the previous quarter! With online lending products rolling out, SeaMoney is poised to grow rapidly, becoming the 3rd growth curve for Sea.”
6. Kingsoft Cloud Holdings Limited (NASDAQ:KC)
York Capital Management’s Stake Value: $24,362,000
Percent of York Capital Management’s 13F Portfolio: 2.73%
Number of Hedge Fund Holders: 12
Kingsoft Cloud Holdings Limited (NASDAQ:KC) is a Chinese holding company that provides cloud computing solutions to its consumers. The company offers services in gaming, video streaming, and financial management. It ranks sixth on our list of the best tech stocks to buy according to billionaire James Dinan.
As of Q2 2021, York Capital owns 718,016 shares in Kingsoft Cloud Holdings Limited (NASDAQ:KC), valued at $24.3 million. The company represents 2.73% of the hedge fund’s 13F portfolio. In Q2 2021, Kingsoft Cloud Holdings Limited (NASDAQ:KC) posted a GAAP EPS of -$0.01, beating the consensus by $0.22. The company’s revenue showcased a 41.6% year-over-year growth at $336.6 million. In June, Macquarie set a $65 price target on Kingsoft Cloud Holdings Limited (NASDAQ:KC), while keeping an ‘Outperform’ rating on the shares.
As of Q2 2021, 12 hedge funds tracked by Insider Monkey have positions in Kingsoft Cloud Holdings Limited (NASDAQ:KC), compared with 16 in the previous quarter. These stakes are valued at $67.2 million.
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Disclosure. None. 10 Tech Stocks to Buy According to Billionaire James Dinan is originally published on Insider Monkey.
