14 Stocks to Buy According to Daniel Kim’s Blackcrane Capital

Published on November 9, 2021 at 12:14 pm by Omer Farooq in Hedge Funds, News

In this article, we take a look at 14 stocks to buy according to Daniel Kim’s Blackcrane Capital. If you want to skip our detailed analysis of Blackcrane Capital’s performance over the years, go directly to the 5 Stocks to Buy According to Daniel Kim’s Blackcrane Capital.

Daniel Kim received a Bachelor’s of Science in Operations Research & Industrial from Cornell University in 2001. He then went for an advanced degree and got his Master’s of Engineering/Financial Engineering from Cornell University in 2002. Daniel Kim formed his hedge fund Blackcrane Capital in 2012, and as of the second quarter of 2021 he manages over $81.9 million in 13F securities.

Daniel Kim oversees management, portfolio construction, and investment strategy at Blackcrane Capital, LLC. Prior to forming Blackcrane, Mr. Kim was the former portfolio manager, director of research, and partner of Mastholm Asset Management, LLC. Prior to Mastholm, he worked in the corporate finance division of Samsung Electronics at the headquarters in Seoul, Korea.

The top five holdings, which include Wix.Com Ltd (NASDAQ:WIX), Profound Medical Corp. (NASDAQ:PROF), and Avita Medical Limited (NASDAQ:RCEL) account for more than 67% of Blackcrane Capital’s investment portfolio. Mr. Kim also invested generously in Alibaba Group Holding Limited (NYSE:BABA) and Microsoft Corporation (NASDAQ:MSFT).

Photo by Nicholas Cappello on Unsplash

Our Methodology

With this context in mind, here is our list of 14 stocks to buy according to Daniel Kim’s Blackcrane Capital. These were ranked according to the investment portfolio of Daniel Kim’s Blackcrane Capital at the end of the second quarter of 2021.

Why should we take a look at Blackcrane Capital’s 13F portfolio? 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 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.

Stocks to Buy According to Daniel Kim’s Blackcrane Capital

14. ClearPoint Neuro Inc. (NASDAQ:CLPT)

Stake Value of Blackcrane Capital: $528,000

Percentage of Blackcrane Capital’s 13F Portfolio: 0.64%

Number of Hedge Fund Holders: 8

ClearPoint Neuro, Inc. (NASDAQ:CLPT) operates as a medical device company primarily in the United States. The company develops and commercializes platforms for performing minimally invasive surgical procedures in the brain under direct, and intra-procedural magnetic resonance imaging (MRI) guidance. ClearPoint Neuro, Inc. (NASDAQ:CLPT) was incorporated in 1998 and is headquartered in Irvine, California.

By the end of the second quarter of 2021, 8 hedge funds out of the 873 tracked by Insider Monkey held stakes in ClearPoint Neuro, Inc. (NASDAQ:CLPT). This is compared to 6 positions in the first quarter.

13. Microsoft Corporation (NASDAQ:MSFT)

Stake Value of Blackcrane Capital: $1,307,000

Percentage of Blackcrane Capital’s 13F Portfolio: 1.59%

Number of Hedge Fund Holders: 238

As of the second quarter of 2021, Daniel Kim has stakes worth $1.3 million in Microsoft Corporation (NASDAQ:MSFT). The investment covers 1.59% of Blackcrane Capital’s 13F portfolio.

Of the 873 elite funds tracked by Insider Monkey, 238 were bullish on Microsoft Corporation (NASDAQ:MSFT) at the end of June. The total stake value of these 238 positions amounted to a little above $62.4 billion. This is compared to 251 hedge funds in the first quarter of 2021, with a total stake of $58.9 billion.

Last month, Barclays analyst Raimo Lenschow raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $345 from $330 and reiterated an Overweight rating on the shares.

Baron Opportunity Fund recently published its second-quarter commentary, in which the fund mentioned Microsoft Corporation (NASDAQ:MSFT). Here’s what the experts at Baron Opportunity had to say about the tech giant:

“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constantcurrency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”

12. HDFC Bank Limited (NYSE:HDB)

Stake Value of Blackcrane Capital: $2,484,000

Percentage of Blackcrane Capital’s 13F Portfolio: 3.03%

Number of Hedge Fund Holders: 39

HDFC Bank Limited (NYSE:HDB) provides various banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. It operates in Treasury, Retail Banking, Wholesale Banking, Other Banking Business, and Unallocated segments. HDFC Bank Limited (NYSE:HDB) was incorporated in 1994 and is based in Mumbai, India.

According to Q2 13F filings, Mr. Kim has stakes worth $2.48 million in HDFC Bank Limited (NYSE:HDB), which accounts for 3.03% of his investment portfolio. By the end of the second quarter of 2021, 39 funds were bullish on HDFC Bank Limited (NYSE:HDB) with stakes worth $1.73 billion. This is compared to 27 in the previous quarter, with stakes of $1.96 billion.

Baillie Gifford, a large-scale investment management firm in the UK, published its “Long Term Global Growth Fund” second quarter 2021 investor letter. The firm shared their insights on HDFC Bank Limited (NYSE:HDB):

“HDFC is India’s leading residential mortgage provider. It is the low-cost provider of mortgages, a significant advantage and competitive strength in a commodity industry. The company has been a beneficiary of rising Indian income levels and improving housing affordability for the expanding middle class. Greater financial inclusion has allowed mortgage provision to extend to a larger portion of India’s population and HDFC is well positioned to benefit from this growth. The company also has an excellent long-term credit record with a focus on profitable growth and has shown good capital allocation over many years. We think the company can grow profitably for many years to come and have invested following the opening of the Indian market.”

11. Takeda Pharmaceutical Company Limited (NYSE:TAK)

Stake Value of Blackcrane Capital: $2,580,000

Percentage of Blackcrane Capital’s 13F Portfolio: 3.14%

Number of Hedge Fund Holders: 19

Takeda Pharmaceutical Company Limited (NYSE:TAK) engages in the research, development, manufacturing, marketing, and out-licensing of pharmaceutical products worldwide. Takeda Pharmaceutical Company (NYSE:TAK) Limited was founded in 1781 and is headquartered in Tokyo, Japan.

As of June 2021, Daniel Kim of Blackcrane Capital owns about 21,000 shares of Takeda Pharmaceutical Company Limited (NYSE:TAK), which are worth $2.58 million. Apart from Blackcrane Capital, 18 more hedge funds tracked by Insider Monkey reported owning stakes in Takeda Pharmaceutical Company Limited (NYSE:TAK).

10. Myovant Sciences Ltd. (NYSE:MYOV)

Stake Value of Blackcrane Capital: $2,907,000

Percentage of Blackcrane Capital’s 13F Portfolio: 3.54%

Number of Hedge Fund Holders: 18

Myovant Sciences Ltd. (NYSE:MYOV) operates as a clinical-stage biopharmaceutical company that is focused on developing and commercializing therapies for women’s health and endocrine diseases. Myovant Sciences Ltd. (NYSE:MYOV) was incorporated in 2016 and is based in London, the United Kingdom.

Last month, SVB Leerink analyst Roanna Ruiz initiated coverage of Myovant Sciences Ltd. (NYSE:MYOV) with a Market Perform rating and a $24 price target.

According to Q2 13F filings, Blackcrane Capital holds more than 127,000 shares of Myovant Sciences Ltd. (NYSE:MYOV), worth $2.9 million. The investment covers an impressive 3.54% of Daniel Kim’s 13F portfolio.

As of the end of the second quarter, 18 hedge funds out of the elite 873 funds tracked by Insider Monkey reported owning stakes in Myovant Sciences Ltd. (NYSE:MYOV).

9. Alibaba Group Holding Limited (NYSE:BABA)

Stake Value of Blackcrane Capital: $3,497,000

Percentage of Blackcrane Capital’s 13F Portfolio: 4.26

Number of Hedge Fund Holders: 146

By the end of the second quarter of 2021, 146 out of the elite 873 hedge funds tracked by Insider Monkey reported owning stakes in Alibaba Group Holding Limited (NYSE:BABA). The total worth of these stakes is $16.79 billion. This shows the hedge fund sentiment is positive for Alibaba Group Holding Limited (NYSE:BABA), as 135 funds had stakes in the company in the previous quarter, having a total worth of $15.49 billion.

As the first week of October ended, Alibaba Group Holding Limited (NYSE:BABA) became the second most mentioned stock on the WallStreetBets Reddit forum, according to data from Swaggy Stocks. Shares of Alibaba Group were up $13.54, or 9.4% to $157.64.

Polen Capital Management, an investment management firm, published its “Polen Global Emerging Markets Growth Fund” second-quarter 2021 investor letter, in which the firm mentioned Alibaba Group Holding Limited (NYSE:BABA). Here’s their take on the company:

“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”

8. Axonics Modulation Technologies, Inc. (NASDAQ:AXNX)

Stake Value of Blackcrane Capital: $3,539,000

Percentage of Blackcrane Capital’s 13F Portfolio: 4.32%

Number of Hedge Fund Holders: 22

Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) is a medical technology company that engages in the development and commercialization of sacral neuromodulation (SNM) systems. Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) was incorporated in 2012 and is headquartered in Irvine, California.

This August, Barclays analyst Travis Steed raised his price target on Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) to $79 from $74 and reiterated an Overweight rating on the shares following the “solid” second-quarter results.

By the end of the second quarter of 2021, 22 hedge funds out of the 873 tracked by Insider Monkey held stakes in Axonics Modulation Technologies, Inc. (NASDAQ:AXNX). The total value of these stakes was in excess of $319 million.

Stocks like Wix.Com Ltd (NASDAQ:WIX), Profound Medical Corp. (NASDAQ:PROF), and Avita Medical Limited (NASDAQ:RCEL), are joined by Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) to contribute to Mr. Kim’s Blackcrane Capital’s investment portfolio.

7. Open Text Corporation (NASDAQ:OTEX)

Stake Value of Blackcrane Capital: $4,235,000

Percentage of Blackcrane Capital’s 13F Portfolio: 5.17%

Number of Hedge Fund Holders: 14

Open Text Corporation (NASDAQ:OTEX) designs, develops, markets, and sells information management software and solutions.

According to Q2 13F filings, Mr. Kim’s Blackcrane Capital had $4.23 million invested in Open Text Corporation (NASDAQ:OTEX) as of the second quarter of 2021. The investment accounts for 5.17% of Daniel Kim’s 13F portfolio.

By the end of the second quarter, 14 hedge funds out of the elite 873 funds tracked by Insider Monkey held stakes in Open Text Corporation (NASDAQ:OTEX) worth more than $300 million.

6. Aurinia Pharmaceuticals Inc (NASDAQ:AUPH)

Stake Value of Blackcrane Capital: $5,444,000

Percentage of Blackcrane Capital’s 13F Portfolio: 6.64%

Number of Hedge Fund Holders: 18

Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) is a biopharmaceutical company that develops and commercializes therapies to treat various diseases with unmet medical needs in Japan and China. The company is headquartered in Victoria, Canada.

By the end of the second quarter of 2021, Daniel Kim’s hedge fund was one of the 18 hedge funds tracked by Insider Monkey to have stakes in Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH). Mr. Kim’s stake in the company is $5.44 million, while the total stake of the 18 hedge funds is approximately $173.5 million. This is compared to 27 hedge funds in the previous quarter, with a total stake of $224.5 million.

As of the second quarter of 2021, Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) reported revenues of $6.62 million, beating revenue estimates by $1.66 million. The share price for Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) has gained 66.40% over the past six months, and 54.73% year to date.

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