This article discusses Mark Massey’s hedge fund AltaRock Partners’ top 4 stock picks at the end of June 2022. If you want to read a detailed report that discusses AltaRock Partners’ recent performance, investment philosophy, and its top 8 stock picks, please check out 8 Best Stocks to Buy According to Mark Massey’s AltaRock Partners.
4. Amazon.com, Inc. (NASDAQ:AMZN)
AltaRock Partners’ Stake Value: $325,472,000
Percentage of AltaRock Partners’ 13F Portfolio: 10.04%
Number of Hedge Fund Holders: 253
AltaRock Partners held 127,246 shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of March, which post the company’s 20-for-1 stock split means 2,544,920 shares. During the second quarter, the fund increased its holding in the company by 20% to 3,064,420 shares. Immediately after the split, Amazon.com, Inc.’s (NASDAQ:AMZN) saw a rapid decline, but it has been on an uptrend over the past month and is now trading down by only 16% year-to-date.
The online retail and cloud giant has been on an acquisition spree over the past few weeks. On July 21, Amazon.com, Inc. (NASDAQ:AMZN) announced through a press release that it would acquire 1Life Healthcare, Inc. (NASDAQ:ONEM) for $18 per share in an all-cash transaction that values the latter at approximately $3.9 billion. This $18 per share was a 76% premium from 1Life Healthcare, Inc.’s (NASDAQ:ONEM) stock’s last closing price before the announcement of the deal. Two weeks later on August 5, Amazon.com, Inc. (NASDAQ:AMZN) again announced that it would acquire iRobot Corporation (NASDAQ:IRBT) for $1.7 billion or $61 per share in an all-cash transaction. iRobot Corporation’s (NASDAQ:IRBT) stock closed at $49.99 on August 4 and opened close to $60 the next day post the deal’s announcement, registering a gain of 20%.
3. Microsoft Corp. (NASDAQ:MSFT)
AltaRock Partners’ Stake Value: $701,662,000
Percentage of AltaRock Partners’ 13F Portfolio: 21.65%
Number of Hedge Fund Holders (Q1): 260
Microsoft Corp. (NASDAQ:MSFT) was the second most popular stock at the end of March among the 912 hedge funds covered by Insider Money, with 260 funds disclosing a stake in the company.
Wedbush Securities analyst, Dan Ives, recently picked Microsoft Corp. (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Palo Alto Networks, Inc. (NASDAQ:PANW) as his top three tech stock picks going into the end of 2022. In his note, Mr. Ives noted:
“FAANG tech stalwarts and Redmond had solid earnings heard around the world (and the Street) as this key barometer of consumer and enterprise spending was a core catalyst for tech stocks in the green over the past month.”
Including Mr. Ives, 31 of the 33 analysts on Wall Street who cover Microsoft Corp. (NASDAQ:MSFT) currently have a ‘Buy’ or ‘Outperform’ rating on it with a consensus price target of $334.31, representing a 14% upside from the stock’s last closing price.
2. Alphabet Inc. (NASDAQ:GOOG)
AltaRock Partners’ Stake Value: $736,873,000
Percentage of AltaRock Partners’ 13F Portfolio: 22.73%
Number of Hedge Fund Holders (Class A stock + Class C stock): 347
Though AltaRock Partners increased its stake in the class A stock of Alphabet Inc. (NASDAQ:GOOG) marginally by 1%, the company still dropped to the second spot in the fund’s 13F portfolio at the end of Q2 from the top spot at the end of March. Funds covered by us that initiated a stake in Alphabet Inc. (NASDAQ:GOOG) during the second quarter included Sander Gerber’s Hudson Bay Capital Management and billionaire Stephen Mandel’s Lone Pine Capital.
On August 12, a press release from Australia’s competition regulator, Australian Competition & Consumer Commission (ACCC), revealed that a Federal Court had fined the search and advertising giant A$60 million or $42.7 million for misleading users over the collection of their personal data. In the press release, ACCC Chair, Gina Cass-Gottlieb, said:
“This significant penalty imposed by the Court today sends a strong message to digital platforms and other businesses, large and small, that they must not mislead consumers about how their data is being collected and used.”
Earlier this week, The Wall Street Journal reported that Alphabet Inc.’s (NASDAQ:GOOG) subsidiary company YouTube is in advance talks with other streaming giants and entertainment companies for a streaming video marketplace. According to the report, the platform, which internally at Alphabet Inc. (NASDAQ:GOOG) is being referred to as ‘Channel Store’, will allow users to buy subscriptions to other services like Hulu, HBO Go, Netflix and others.
1. TransDigm Group Incorporated (NYSE:TDG)
AltaRock Partners’ Stake Value: $782,829,000
Percentage of AltaRock Partners’ 13F Portfolio: 24.15%
Number of Hedge Fund Holders (Q1): 66
TransDigm Group Incorporated (NYSE:TDG) has been in AltaRock Partners’ portfolio since the fourth quarter of 2014 and was the fund’s top stock pick at the end of June, with AltaRock Partners increasing its stake in the company by 3% to 1,458,679 shares during Q2. The Cleveland, Ohio-based company designs, produces and supplies aircraft components around the world and has seen its annual revenue grow to $4.8 billion from $1.7 billion in its last 10 financial years. TransDigm Group Incorporated’s (NYSE:TDG) stock has appreciated by more than 850% in the previous ten years, but most of that gain was recorded prior to the onset of the COVID pandemic in March 2020.
For the quarter of its fiscal year 2022, TransDigm Group Incorporated (NYSE:TDG) reported GAAP earnings per share of $4.10, beating analysts’ estimate by $0.26. However, the $1.4 billion in revenue it reported for that period missed analysts’ projection by a mere $12 million. On August 16, Wells Fargo & Company’s analysts boosted their price target on the stock to $740 from $620 while maintaining their ‘Overweight’ rating.
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