In this article, we will discuss 10 technology stock picks of John Kim’s Night Owl Capital. If you want to skip our detailed analysis of Kim’s history, investment philosophy performance, you can go directly to 5 Technology Stock Picks of John Kim’s Night Owl Capital.
John Sang-Hyun Kim is the Managing Director and Chief Compliance Officer of Night Owl Capital. John Kim joined Night Owl Capital Management in 2005 and has more than 20 years of experience in the financial advisory industry. He received his undergraduate degree from Yale University in 1995 and also received a graduate law degree from Yale five years later.
John Kim started his career as an analyst at J. Bush & Co, Inc. and later on joined Morgan Stanley Investment Management Inc. as an Investment Banking Associate in 1999.
Night Owl Capital Management was founded in 1993 as Southfield Investment Management. It is based in Connecticut and primarily focuses on large-cap and mid-cap companies across the United States and a few other countries. The fund mainly makes long-term, public equity investments in growing companies.
As of the third quarter of 2021, Night Owl Capital Management has around $707 million in assets under management and holdings of $569.84 million in 13F securities.
Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN) and Meta Platforms, Inc. (NASDAQ:FB) are some of the most notable names in Night Owl Capital Management’s portfolio.
Our Methodology
With this context in mind, here are 10 technology stock picks of John Kim’s Night Owl Capital. The companies have been picked from Night Owl Capital’s 13F portfolio.
The hedge fund sentiment of each stock has been taken from Insider Monkey’s database of 867 hedge funds.
10 Technology Stock Picks of John Kim’s Night Owl Capital
10. Meta Platforms, Inc. (NASDAQ:FB)
Night Owl Capital’s Stake Value: $25.69 million
Percentage of Night Owl Capital’s 13F Portfolio: 4.5%
Number of Hedge Fund Holders: 248
According to the filings of the third quarter of 2021, Night Owl Capital Management owned 75,698 shares of Meta Platforms, Inc. (NASDAQ:FB) worth $25.69 million, comprising 4.5% of the fund’s portfolio.
Meta Platforms, Inc. (NASDAQ:FB) saw a decline in hedge fund sentiment in the third quarter of 2021, with 248 hedge funds having a stake in the company worth $38.57 billion compared to 266 worth $42.35 billion in the previous quarter.
Meta Platforms, Inc. (NASDAQ:FB) was mentioned by Jefferies Group in its third-quarter 2021 investor letter. Here is what the firm said:
“While still early, FB is in the process of building the platforms that will ultimately support the development the Metaverse. We look at FB’s position through the lens of 4 current investment initiatives: 1) Oculus VR hardware, 2) Smart glasses, 3) Augmented Reality lenses, and 4) “Horizon Workrooms”
Oculus Virtual Reality hardware: Since acquiring Oculus in 2014 ($2B deal), FB has been focused on developing best-in-class hardware and complementary software & services to support VR experiences. The Oculus Quest 2 is FB’s newest VR headset; it retails at $299 and allows users to play games, try fitness classes, play sports, and watch concerts in virtual environments. Most importantly, Quest 2 is linked to users’ Facebook accounts, which means users can seamlessly connect with friends in virtual environments to play games or spend time together. We believe one of FB’s biggest differentiators in VR is its large array of non-gaming experiences that were designed for Oculus. For instance, users can explore extreme terrain in National Geographic Explore VR, join virtual fitness classes, or simulate being a chef. As FB’s hardware continues to improve and becomes less cumbersome, we would expect a flywheel of greater developer and user adoption of VR…” (Click here to see the full text)
9. Sprout Social, Inc. (NASDAQ:SPT)
Night Owl Capital’s Stake Value: $30.84 million
Percentage of Night Owl Capital’s 13F Portfolio: 5.41%
Number of Hedge Fund Holders: 29
Sprout Social, Inc. (NASDAQ:SPT) is a software company that unifies the social media system of record, action and intelligence. The company operates across several countries in the Americas, Europe, Asia and the Middle East, and Africa.
Nancy Zevenbergen’s Zevenbergen Capital Investments holds the largest stake in Sprout Social, Inc. (NASDAQ:SPT) with 1.26 million shares worth $153.49 million, representing 2.91% of the fund’s portfolio.
ClearBridge Investments mentioned Sprout Social, Inc. (NASDAQ:SPT) in its second-quarter 2021 investor letter. Here is what it said:
“Sprout Social (is one of the) companies that have become go-to platforms for small and medium size businesses (SMBs) engaged in e-commerce and social media marketing, rebounded strongly in the quarter after being caught in the selloff among high-multiple growth names since Vaccine Monday. These and the portfolio’s other disruptors had thrived through the first part of the pandemic, leading us to trim positions into strength and reallocate cash into more attractively priced evolving opportunities and steady compounders that had been overly punished by lockdowns and a drop in economic activity.”
8. Visa Inc. (NYSE:V)
Night Owl Capital’s Stake Value: $33.02 million
Percentage of Night Owl Capital’s 13F Portfolio: 5.79%
Number of Hedge Fund Holders: 143
Visa Inc. (NYSE:V) is a California-based company founded in 1958 that provides financial services in the form of electronic funds transfer. The main products of the company include credit cards, debit cards, and prepaid cards.
Despite Amazon.com, Inc.’s (NASDAQ:AMZN) decision to stop accepting payments through Visa cards issued through the UK over high processing fees, Visa Inc. (NYSE:V) remains bullish in the eyes of analysts. Morgan Stanley analyst James Faucette reports that this weakness in the company’s shares creates a buying opportunity.
On November 17, UBS analyst Rayna Kumar assumed coverage of Visa Inc. (NYSE:V) with a Buy rating and set a price target of $275 on its shares.
The investment management firm L1 Capital mentioned Visa Inc. (NYSE:V) in its third-quarter 2021 investor letter. Here is what the firm said:
“In our view, the payment network company, Visa, remain very well positioned to participate in an ever-expanding market for electronic payments. In time, ‘Buy now, Pay Later’ may have a modest impact on Visa’s transaction volumes, however in aggregate, we believe it will have the greater effect of supporting growth in electronic payments more broadly. Nearer term, we believe the recovery in international travel as the world gradually normalises and learns to live with COVID-19 will be materially positive for Visa’s financial performance. eCommerce will also remain a positive key driver for Visa growth.”
7. Alphabet Inc. (NASDAQ:GOOGL)
Night Owl Capital’s Stake Value: $33.55 million
Percentage of Night Owl Capital’s 13F Portfolio: 5.88%
Number of Hedge Fund Holders: 195
Among the hedge funds being tracked by Insider Monkey, London-based TCI Fund Management is the leading stakeholder in Alphabet Inc. (NASDAQ:GOOGL) with 2.95 million shares worth $7.86 billion, representing 18.89% of the fund’s portfolio.
Out of the 867 hedge funds in Insider Monkey’s database, 143 funds held stakes in the company worth $26.16 billion, down from 162 funds holding stakes worth $27.60 billion in the preceding quarter.
According to the third quarter’s filings, Night Owl Capital Management owned 12,590 shares in Alphabet Inc. (NASDAQ:GOOGL) worth $33.55 million, representing 5.88% of the portfolio. The fund also increased its activity in the company by 20% in the third quarter.
Alphabet Inc. (NASDAQ:GOOGL) was mentioned by Saturna Capital, an investment management firm, in its third-quarter 2021 investor letter. Here is what it said:
“Alphabet was a new addition to the Fund this year, as we believed it important to have exposure to the top online media and advertising company in the world. Some have raised concerns surrounding Alphabet’s exposure to political interference, but we take comfort from the belief that were the company to be broken up, it would quite likely be worth even more than as a single entity.”
6. Mastercard Incorporated (NYSE:MA)
Night Owl Capital’s Stake Value: $33.83 million
Percentage of Night Owl Capital’s 13F Portfolio: 5.93%
Number of Hedge Fund Holders: 146
Mastercard Incorporated (NYSE:MA) is an American multinational tech company that offers financial services worldwide through MasterCard, Maestro, and Cirrus. The company’s clientele includes the public, sellers, financial institutions, and governments.
On November 11, UBS analyst Rayna Kumar initiated coverage of Mastercard Incorporated (NYSE:MA) with a Buy rating and set a price target of $448.
On November 30, Mastercard Incorporated (NYSE:MA) announced that the quarterly dividend would be raised to 49c from 44c and the cash dividend will be paid out on February 9, 2022.
Mastercard Incorporated (NYSE:MA), along with Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN) and Meta Platforms, Inc. (NASDAQ:FB), is a significant name in Night Owl Capital Management’s portfolio.
L1 Capital mentioned Mastercard Incorporated (NYSE:MA) in its third-quarter 2021 investor letter. Here is what the letter said:
“Mastercard returned to top 10. We have held Mastercard since inception of the Fund. Over the 6 weeks to 30 September 2021, Mastercard’s share price retreated 10% and we took advantage of what we believe will be a short-term pullback in the share price to add to our investment. Recent weakness in Mastercard’s share price is most likely due to concerns about disintermediation and other pressures caused by growth in ‘Buy now, Pay later’ and other new payment offerings, as well a general market rotation away from higher growth companies in favour of more cyclical businesses.”
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Disclosure: None. 10 Technology Stock Picks of John Kim’s Night Owl Capital is originally published on Insider Monkey.
