In this article, we discuss the 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital based on Q2 holdings of the fund. If you want to skip our detailed analysis of Claugus’ history, investment philosophy, and hedge fund performance, go directly to the 5 Tech Stocks to Invest in Today According to Thomas E. Claugus’ GMT Capital.
Thomas E. Claugus is the President, CEO, Principal, and Portfolio Manager at the GMT Capital. He is an MBA from the Harvard Business School. Claugus worked at Rohm and Haas Company for 17 years.
GMT Capital operates as an investment management hedge fund. It was founded in 1993 and had a 20-year track record of producing significant absolute returns typically uncorrelated with the broader markets.
Thomas E. Claugus likes to diversify his portfolio. As a result, his hedge fund has stakes in small and large companies with strong fundamentals and future growth potential. Some of these companies include Alphabet Inc. (NASDAQ: GOOG), Amazon.com, Inc. (NASDAQ: AMZN), and Alibaba Group Holding Limited (NYSE: BABA).
In Alphabet Inc. (NASDAQ: GOOG), Thomas E. Claugus owns 24,327 shares. The investment covers an impressive 4.55% of the fund’s portfolio. On September 1, Financial Times reported, Alphabet’s YouTube has achieved 50 million paying customers for its music-streaming services.
Based on the latest 13F holdings for the second quarter of 2021, GMT Capital owns 1,668 shares in Amazon.com, Inc. (NASDAQ: AMZN), worth $5.74 million. On September 9, Amazon.com, Inc. (NASDAQ: AMZN) announced the launch of its first-ever Amazon-built television sets, with two product lines aimed at the market it has been nurturing for years with its Fire TV device line. On July 30, Cowen analyst John Blackledge lowered the price target on Amazon.com, Inc. (NASDAQ: AMZN) to $4,400 from $4,600 and maintained an “Outperform” rating on the shares.
Thomas E. Claugus is bullish on the tech giant Alibaba Group Holding Limited (NYSE: BABA). He increased his stake in the company by 14% in the second quarter of 2021, ending the period with 313,000 shares of the company, worth $70.98 million. On September 6, KGI Securities initiated coverage of Alibaba Group Holding Limited (NYSE: BABA) with a “Neutral” rating and gave a price target of HK$205.
Thomas Claugus of GMT Capital
Why should we pay attention to Claugus’ 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 124 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 115 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.
With this context and industry outlook in mind, let’s start our list of the 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital. We picked stocks from the Q2 portfolio of Claugus.
Tech Stocks to Invest in Today According to Thomas E. Claugus’ GMT Capital
10. Castlight Health, Inc. (NYSE: CSLT)
Claugus’ Stake Value: $1,825,000
Percentage of Thomas E. Claugus’ 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 18
Castlight Health, Inc. (NYSE: CSLT) offers health navigation solutions to businesses and clients in the education, manufacturing, retail, government, and technology sectors. It was founded in 2008 and is placed tenth on the list of 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital. Castlight Health, Inc. (NYSE: CSLT) shares have gained about 52.94% over the last 12 months.
On August 3, Castlight Health, Inc. (NYSE: CSLT) announced earnings for the second quarter of 2021. It posted earnings per share of $0.01, beating the market predictions by $0.02. In addition, revenue over the period was $35.6 million, surpassing the estimates by $1.04 million.
The hedge fund managed by Thomas E. Claugus owns 693,867 shares in Castlight Health, Inc. (NYSE: CSLT), worth $1.83 million, representing 0.13% of their portfolio. David Atterbury’s Whetstone Capital Advisors is the leading shareholder of Castlight Health, Inc. (NYSE: CSLT), with 5.29 million shares worth $13.91 million.
In addition to Alphabet Inc. (NASDAQ: GOOG), Amazon.com, Inc. (NASDAQ: AMZN), and Alibaba Group Holding Limited (NYSE: BABA), analysts are paying attention to Castlight Health, Inc. (NYSE: CSLT) amid the company’s long-term growth potential.
9. Gaotu Techedu Inc. (NYSE: GOTU)
Claugus’ Stake Value: $2,628,000
Percentage of Thomas E. Claugus’ 13F Portfolio: 0.19%
Number of Hedge Fund Holders: 11
Gaotu Techedu Inc. (NYSE: GOTU) is a technology-driven education firm that provides online K-12 after-school tutoring services. The company was previously known as GSX Techedu Inc. and switched its name to Gaotu Techedu Inc. in June 2021. The company was founded in 2014, and it stands ninth on the list of 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital. Gaotu Techedu Inc. (NYSE: GOTU) presently has a market capitalization of $674.75 million.
In the second quarter of 2021, Thomas E. Claugus’ GMT Capital owned 177,900 shares in Gaotu Techedu Inc. (NYSE: GOTU), worth $2.63 million. The investment covers 0.19% of the fund’s portfolio. Gaotu Techedu Inc. (NYSE: GOTU) saw a decrease in hedge fund sentiment recently. The number of long hedge fund positions reduced to 11 in the second quarter of 2021 compared to 30 positions in the previous quarter.
8. Electronic Arts Inc. (NASDAQ: EA)
Claugus’ Stake Value: $3,354,000
Percentage of Thomas E. Claugus’ 13F Portfolio: 0.25%
Number of Hedge Fund Holders: 56
Electronic Arts Inc. (NASDAQ: EA) is placed eighth on the list of 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital. Shares of Electronic Arts Inc. (NASDAQ: EA) surged 15.02% in the past 12 months.
On August 20, Electronic Arts Inc. (NASDAQ: EA) launched Madden NFL 22, the newest installment in its cash-cow NFL videogame series. On August 5, Wedbush analyst Michael Pachter raised the price target on Electronic Arts Inc. (NASDAQ: EA) to $194 from $175 and kept an “Outperform” rating on the shares.
GMT Capital holds 23,320 shares in Electronic Arts Inc. (NASDAQ: EA), worth $3.35 million, representing 0.25% of their portfolio. Electronic Arts Inc. (NASDAQ: EA) saw an increase in hedge fund sentiment recently. The number of hedge fund positions increased to 56 in the second quarter of 2021 compared to 44 positions in the previous quarter.
In addition to Alphabet Inc. (NASDAQ: GOOG), Amazon.com, Inc. (NASDAQ: AMZN), and Alibaba Group Holding Limited (NYSE: BABA), Electronic Arts Inc. (NASDAQ: EA) is a notable stock in GMT’s portfolio.
Artisan Partners, in its first-quarter 2021 investor letter, mentioned Electronic Arts Inc. (NASDAQ: EA). Here is what the fund said:
“Video game publisher Electronic Arts (EA) has recently experienced muted performance relative to peers. The company is expanding its moat as COVID-19 pulled forward gamer engagement in 2020 and early 2021. While we expect current growth rates will slow, the long-term value of the company’s user community has increased. EA’s net cash balance sheet and industry leadership fit well with our philosophy and process, and while the recently acquired Codemasters and GLUU Mobile will draw down cash, the balance sheet remains strong and the deals further EA’s mobile growth strategy. We believe our stake in EA represents how we can think opportunistically to build an eclectic, idiosyncratic portfolio to deliver value over the long term.”
7. Canaan Inc. (NASDAQ: CAN)
Claugus’ Stake Value: $4,845,000
Percentage of Thomas E. Claugus’ 13F Portfolio: 0.36%
Number of Hedge Fund Holders: 11
Canaan Inc. (NASDAQ: CAN) develops, designs, and sells integrated circuit (IC) final system products, principally in the People’s Republic of China, by combining IC devices for bitcoin mining and associated components. It was founded in 2013 and stands seventh on the list of 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital. His bet on Canaan Inc. (NASDAQ: CAN) is also paying off. Shares of the company surged 327.41% over the last 12 months.
On August 31, Canaan Inc. (NASDAQ: CAN) received a purchase order for 20,000 Bitcoin mining equipment from Genesis Digital Assets Limited. On August 12, Canaan Inc.’s (NASDAQ: CAN) latest generation ASIC bitcoin miners were bought by Mawson Infrastructure Group, Inc. (OTC: MIGID), adding over 1.5EH to Mawson’s current operations.
The hedge fund chaired by Thomas E. Claugus owns 594,484 shares in Canaan Inc. (NASDAQ: CAN), worth over $4.85 million, representing 0.36% of their investment portfolio. Canaan Inc. (NASDAQ: CAN) is the latest addition to Thomas E. Claugus’ hedge fund portfolio. According to our database, the number of Canaan Inc. (NASDAQ: CAN) long hedge funds positions increased in the second quarter of 2021. There were 11 hedge funds that hold a position in Canaan Inc. (NASDAQ: CAN) compared to 9 funds in the first quarter of 2021.
In addition to Alphabet Inc. (NASDAQ: GOOG), Amazon.com, Inc. (NASDAQ: AMZN), and Alibaba Group Holding Limited (NYSE: BABA), analysts are paying attention to Canaan Inc. (NASDAQ: CAN) amid the company’s long-term growth potential.
6. Eastman Kodak Company (NYSE: KODK)
Claugus’ Stake Value: $6,648,000
Percentage of Thomas E. Claugus’ 13F Portfolio: 0.49%
Number of Hedge Fund Holders: 13
Eastman Kodak Company (NYSE: KODK) is a worldwide technology firm that specializes in commercial printing, packaging, publishing, manufacturing, and entertainment. It was founded in 1880 and is placed sixth on the list of 10 tech stocks to invest in today according to Thomas E. Claugus’ GMT Capital. Shares of Eastman Kodak Company (NYSE: KODK) are up 7.69% in the past 12 months.
On August 10, Eastman Kodak Company (NYSE: KODK) declared earnings for the second quarter of 2021. It posted a net income of $16 million compared to the net income of $6 million for the first quarter of 2021. Revenue over the period was $291 million, versus the revenue of $265 million for the first quarter of 2021.
GMT Capital holds 799,000 shares in Eastman Kodak Company (NYSE: KODK), worth $6.65 million, representing 0.49% of their portfolio. The hedge fund has increased its stake in Eastman Kodak Company (NYSE: KODK) by 238% in the second quarter of 2021. Southeastern Asset Management is a leading stakeholder in Eastman Kodak Company (NYSE: KODK), with 2.53 million shares worth $21.09 million.
Longleaf Partners, in their fourth-quarter 2020 investor letter, mentioned Eastman Kodak Company (NYSE: KODK). Here is what the fund said:
“Eastman Kodak (79%, 11.21%; 3%, 0.37%), the global technology company focused on chemicals and print, was by far the largest contributor for the year. Despite the damage from COVID disruptions to its sales pipeline, the company maintained breakeven EBITDA (earnings before interest, tax, depreciation and amortization) and positive FCF in the last quarter with excellent cost control. Revenues improved sequentially with a gradual rebound. CEO Jim Continenza has done incredible work this year to improve the product offerings and return the business towards sustainable profitability. The stock price was extremely volatile this summer in the wake of July’s announcement of a potential $765 million US government loan to produce ingredients for a variety of generic drugs. While this government deal may have subsequently gone away, the physical assets, chemistry know-how, history of making ingredients and national need are still in place. Kodak’s Licensing business continues to quietly hum along, producing huge margins. As discussed in more detail in our 3Q letter here, we exited our small common stock position the day the deal was announced and then worked with the company to convert our convertible bonds to common shares over the course of the next several days, which we subsequently sold to take advantage of the price appreciation and reduce an outsized position. The conversion price on the bonds was $3.10, and the average realized exit price of those common shares was (roughly) $11. Today the company has very little net debt and untapped revolver capacity. The Fund’s remaining exposure is from preferred shares, which represented 10% of the portfolio as of year-end, and Kodak possesses the balance sheet strength to pay them off immediately.”
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Disclosure: None. 10 Tech Stocks to Invest in Today According to Thomas E. Claugus’ GMT Capital is originally published on Insider Monkey.
