In this article, we discuss the 3 stocks to buy according to Dan Juran’s Rings Capital. If you want to read our detailed analysis of Juran’s history and hedge fund performance, go directly to the 6 Stocks to Buy According to Dan Juran’s Rings Capital.
3. Microsoft Corporation (NASDAQ:MSFT)
Juran’s Stake Value: $23 million
Microsoft Corporation (NASDAQ:MSFT) is a tech corporation that is famed for the production of computers, computer software, consumer electronics, and other services.
As of the end of the third quarter of 2021, Juran’s Rings Capital Management owns a stake worth $23 million in Microsoft Corporation (NASDAQ:MSFT).
Baron Opportunity Fund, in its second-quarter 2021 investor letter, mentioned that Microsoft Corporation (NASDAQ:MSFT) is well-positioned for continued solid growth and profitability. Here is what the fund said:
“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.”
2. Moody’s Corporation (NYSE:MCO)
Juran’s Stake Value: $84.2 million
Moody’s Corporation (NYSE:MCO) is a New Mexico-based business and financial services company that was founded in 1909. The company has a market cap of $66.64 billion.
As of the end of the third quarter, Rings Capital Management owns a stake worth $84.2 million in Moody’s Corporation (NYSE:MCO).
Qualivian Investment Partners, in its second-quarter 2021 investor letter, emphasized that Moody’s Corporation (NYSE:MCO) leveraged strong revenue growth with strong operating profit margin improvement. Here is what the fund said:
“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”
1. S&P Global Inc. (NYSE:SPGI)
Juran’s Stake Value: $100.2 million
S&P Global Inc. (NYSE:SPGI) is a New York-based corporation that offers analytics and financial information to the commodity and capital markets globally.
On September 16, Oppenheimer analyst Owen Lau maintained an Outperform rating on S&P Global Inc. (NYSE:SPGI) stock and raised the price target from $476 to $550.
According to the fund’s latest filings, Rings Capital Management owns a $100 million stake in S&P Global Inc. (NYSE:SPGI) as of the third quarter.
Baron Funds, in its first-quarter 2021 investor letter, projects that S&P Global Inc. (NYSE:SPGI) has a long runway for growth and significant competitive advantages. Here is what the fund said:
“S&P Global Inc. provides credit ratings, indexes, data, and analytics to the financial and commodities markets. Shares increased on strong fourth quarter results and 2021 guidance that exceeded Street expectations. Although bond issuance is expected to moderate after two years of exceptional growth, management still expects revenue to grow mid-single-digits this year. Also, shareholders overwhelmingly voted to approve the merger with IHS Markit. We continue to own the stock as we see a long runway for growth and significant competitive advantages for the company.”
You can also take a peek at Top 10 Stock Picks of Peter Avellone’s Cartenna Capital and 9 Best Clean Energy Stocks To Buy Today.
