In this article, we discuss the 5 best growth stocks to buy right now based on billionaire growth investor Philippe Laffont’s Q1 portfolio. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Growth Stocks to Buy Right Now.
5. Sunrun Inc. (NASDAQ: RUN)
Number of Hedge Fund Holders: 41
Sunrun Inc. (NASDAQ: RUN) is a clean energy company that primarily deals in solar panels. It is ranked fifth on our list of 10 best growth stocks to buy right now. On June 16, investment bank Morgan Stanley gave the stock an Overweight rating with a price target of $91. The share price of the clean energy company jumped more than 12% after the ratings upgrade. The stock has offered investors returns exceeding 162% over the course of the past twelve months. It has a market cap of close to $10 billion and posted close to $1 billion in revenue last year.
Sunrun Inc. (NASDAQ: RUN) represents 5.64% of the investment portfolio of Coatue Management which holds 17 million shares in the company worth over $1 billion. The hedge fund has trimmed stake in the firm by 9% since December 2020.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in Sunrun Inc. (NASDAQ: RUN) with 7 million shares worth more than $427 million.
4. Tesla, Inc. (NASDAQ: TSLA)
Number of Hedge Fund Holders: 62
Tesla, Inc. (NASDAQ: TSLA) is an electric vehicle maker that also has stakes in the clean energy business. The company’s chief Elon Musk, who has stirred up a storm around crypto stocks over his criticism of the energy intensive crypto mining methods, is still questioning the environmental impact of mining. In response to a tweet by Kraken’s CEO Jesse Powell that Bitcoin was greener than critics said, Musk responded by asking what data Powell had to support his argument.
Coatue Management owns more than 1.6 million shares in Tesla, Inc. (NASDAQ: TSLA) that are worth around $1.08 billion. This represents 5.95% of its investment portfolio. Coatue has trimmed its position in the EV maker by 25% since the fourth quarter of 2020.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Tesla, Inc. (NASDAQ: TSLA) with 24.4 million shares worth more than $16.3 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ: TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
3. The Walt Disney Company (NYSE: DIS)
Number of Hedge Fund Holders: 134
The Walt Disney Company (NYSE: DIS) is an entertainment and mass media company. It is placed third on our list of 10 best growth stocks to buy right now. The company’s shares have returned more than 52% to investors over the past year. The company has been on a comeback trail in the market as the vaccine rollout allows for the reopening of theme parks and large gatherings. On May 26, the stock was given a Buy rating with a $215 price target by investment advisory UBS, implying 21% upside potential.
The Walt Disney Company (NYSE: DIS) represents more than 6.1% of the investment portfolio of Coatue Management. The hedge fund owns more than 6 million shares in the firm worth over $1.1 billion. The fund has trimmed stake in the media company by 45% since last year.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in the firm with 10.3 million shares worth more than $1.9 billion.
Here is what Harding Loevner has to say about The Walt Disney Company (NYSE: DIS) in its Q4 2020 investor letter:
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of usto our couches. Disney, however, wasready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.
A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”
2. Snowflake Inc. (NYSE: SNOW)
Number of Hedge Fund Holders: 71
Snowflake Inc. (NYSE: SNOW) is ranked second on our list of 10 best growth stocks to buy right now. It is a software company that markets cloud-based data warehousing. On June 14, investment advisory Deutsche Bank raised the price target on the stock to $265 from $248 and maintained a Buy rating. The share price of the firm jumped close to 1.5% after the ratings update. The stock has returned more than 11% to investors over the past three months.
Coatue Management owns 5.2 million shares in Snowflake Inc. (NYSE: SNOW) that are worth over $1.2 billion and represent 6.59% of their portfolio. The hedge fund has increased its stake in the firm by 29% in the first three months of 2021 compared to the fourth quarter of 2020.
At the end of the first quarter of 2021, 71 hedge funds in the database of Insider Monkey held stakes worth $12.9 billion in Snowflake Inc. (NYSE: SNOW), up from 54 in the preceding quarter worth $7.7 billion.
Here is what RiverPark Funds has to say about Snowflake Inc. (NYSE: SNOW) in its Q1 2021 investor letter:
“We also established a position in Snowflake during the quarter. Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a-service.” The data warehousing market—created by the massive, growing amount of user, customer, and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.
Snowflake requires absolutely no infrastructure management from its users, is fully scalable for each customer, runs on Amazon, Microsoft, or Google cloud platforms, and most critically, Snowflake helps companies analyze their data. The company also has a unique, customer-aligned billing model based on usage. All of which has led to Snowflake being among the leaders of this highly fragmented market, posting 124% revenue growth last year. SNOW’s growth comes from the combination of more customers—which grew 73% last year—and customers buying more services—the company boasts an amazing 150%+ net customer retention. The company’s growing scale has also led to increasing gross margin and operating leverage, up 1,100 basis points and 8,200 basis points, respectively, over the past two years. The company has guided to FCF break-even this year, and with the company’s capital expenditure-light model—Snowflake uses the public cloud for hosting—we expect FCF to grow much faster than revenue growth, which we forecast to grow comfortably more than 50% per year for the next several years. Additionally, we have great confidence in the SNOW management team, which previously had an enormously successful run guiding one of our other core Cloud software holdings ServiceNow.”
1. DoorDash, Inc. (NYSE: DASH)
Number of Hedge Fund Holders: 38
DoorDash, Inc. (NYSE: DASH) is a food delivery service that controls the largest share of the market in the United States. It is placed first on our list of 10 best growth stocks to buy right now. The company enjoyed a stellar 2020 as the coronavirus lockdowns helped the firm grow because people preferred ordering deliveries as restaurants were closed. In 2021, even as the pandemic subsides, food delivery is still a thriving business. On June 14, the firm announced that it would start offering on-demand delivery of pet essentials to users soon.
DoorDash, Inc. (NYSE: DASH) represents the largest holding of Coatue Management, comprising 6.65% of their portfolio. The fund owns more than 9.2 million shares in the firm worth over $1.2 billion.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Lone Pine Capital is a leading shareholder in DoorDash, Inc. (NYSE: DASH) with 6.7 million shares worth more than $881 million.
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
