In this piece, we’ll gloss over 5 growth stocks to buy according to Alex Sacerdote’s Whale Rock Capital. If you want a more detailed analysis then head right on to 10 Growth Stocks to Buy According to Alex Sacerdote’s Whale Rock Capital.
5. MongoDB, Inc. (NASDAQ:MDB)
Mr. Sacerdote’s Stake Value: $457 million
Percentage of Mr. Sacerdote’s 13F Portfolio: 2.98%
Number of Hedge Fund Holders: 44
MongoDB, Inc. (NASDAQ:MDB) is an American database provider headquartered in New York and it features several products in its portfolio. These cover several segments of the database market such as single and multiple cloud based databases, alongside which it also provides other services such as consulting and training.
MongoDB, Inc. (NASDAQ:MDB) posted $198 million in revenue and -$0.24 in non-GAAP EPS at the end of its second fiscal quarter this year, beating analyst estimates on both counts. During the same time period, Mr. Sacerdote’s hedge fund held 1.2 million shares of the company which represented 2.98% of his portfolio and were worth $457 million. In an analyst note released in September, Barclays raised its price target for MongoDB, Inc. (NASDAQ:MDB) to $590, sharing that a new base valuation year will improve the company’s outlook.
Additionally, by the second quarter, 44 of the 873 hedge funds polled by Insider Monkey held a stake in MongoDB, Inc. (NASDAQ:MDB). Over the past year, the company’s share price has grown by a staggering 110%.
The company’s largest shareholder after Whale Rock is Eashwar Krishnan’s Tybourne Capital Management who owns 624,639 shares worth $225 million.
4. Facebook, Inc. (NASDAQ:FB)
Mr. Sacerdote’s Stake Value: $507 million
Percentage of Mr. Sacerdote’s 13F Portfolio: 3.3%
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is perhaps the world’s most famous social media firm, which is headquartered in the American state of California. Initially starting out as a simple platform that lets its users connect with each other and share their life updates, Facebook, Inc. (NASDAQ:FB) now owns several services and operates its own marketplace in addition to its other venues.
Mr. Sacerdote’s Whale Rock Capital Management held 1.4 million Facebook, Inc. (NASDAQ:FB) shares that were $507 million and represented 3.3% of his total portfolio value by the end of the second quarter. During the same time period, 266 of the 873 hedge funds polled by Insider Monkey held stakes in the company.
Facebook, Inc. (NASDAQ:FB)’s largest shareholder is Alexander Becker’s Codex Capital who owns 27,950 shares worth $9.6 billion.
In its third quarter investor letter, Wedgewood Partners had the following to say about Facebook, Inc. (NASDAQ:FB):
“Facebook detracted from performance despite posting a staggering +56% growth in advertising revenues. Much of the stock’s underperformance was driven by nonoperating concerns that we view as mostly political in nature. The Company’s digital properties command a massive audience of over 2.7 billion daily users, so any government or state actor would be able to wield tremendous power by controlling that audience and it should not be a surprise when those actors attempt to do that. However, Facebook has invested aggressively in its content curation capabilities that address many of the concerns raised by media and political critics. We continue to carry Facebook at our maximum weighting as the stock is trading in line with a market multiple despite unrivaled competitive positioning and rapid growth, representing one of the best risk-rewards available in the market.”
3. Roku, Inc. (NASDAQ:ROKU)
Mr. Sacerdote’s Stake Value: $580 million
Percentage of Mr. Sacerdote’s 13F Portfolio: 3.78%
Number of Hedge Fund Holders: 61
Roku, Inc. (NASDAQ:ROKU) is an American television streaming company that provides connections and sells smart televisions under its brand name. The company operates in several countries such as the United States, Canada and the United Kingdom, and it reaches its customers directly and through retailers and distributors.
Roku, Inc. (NASDAQ:ROKU)’s share price has grown by an eye popping 47% over the last year, and Mr. Sacerdote added the company to his portfolio in the second quarter of this year. He owns 1.2 million shares that are worth $580 million and make up for 3.78% of his hedge fund’s portfolio. Additionally, during the second quarter 61 out of 873 hedge funds polled by Insider Monkey also had a stake in Roku, Inc. (NASDAQ:ROKU).
The company posted revenue of $645 million and GAAP EPS of $0.52 by the end of its second quarter this year, as it beat analyst estimates on both counts. Indicating positive sentiment, Cleveland Research initiated coverage of Roku, Inc. (NASDAQ:ROKU) shares in September with a Buy rating and set a $389 price target for the company.
In a second quarter 2021 investor letter, LRT Capital Management had the following to say about Roku, Inc. (NASDAQ:ROKU):
“Historically, investors viewed Roku as a provider of commoditized hardware. However, we see the business as a provider of a platform for streaming services with ongoing recurring revenues as the company reduces its reliance on hardware sales for profits. In fact, over the past 5 years, the share of revenue coming from hardware sales has shrunk to just 45%, while its contribution to gross profit declined to 19%.1 We believe that the company’s strong competitive advantage is rooted in its high switching cost and scale-based cost advantages. In addition, we believe Roku is only in the beginning stages of its growth both domestically in the United States and internationally where the cord-cutting phenomenon is at least five years behind the U.S. Lastly, Roku’s capital allocation strategy has been exemplary and focused primarily on acquisitions that improve the customer experience and value of its platform. The moat, growth opportunities, and the company’s track record of capital allocation makes us believe that Roku can deliver strong investment returns to shareholders in the upcoming years…”
Catherine D. Wood’s Ark Investment Management was Roku, Inc. (NASDAQ:ROKU) largest shareholder by the end of the second quarter through owning 4.7 million shares worth $2.1 billion.
2. Tesla, Inc. (NASDAQ:TSLA)
Mr. Sacerdote’s Stake Value: $593 million
Percentage of Mr. Sacerdote’s 13F Portfolio: 3.87%
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) is thought of pioneering the mass production of electric vehicles inside and outside the United States. Led by Mr. Elon Musk, who has become one of the world’s richest men due to his company ownership, Tesla, Inc. (NASDAQ:TSLA) primarily focuses on electric vehicles but it also provides other products such as batteries and home systems.
The company earned revenue of $13.76 billion and non-GAAP EPS of $1.86 in its third quarter of this year, beating analyst estimates on both counts. Mr. Sacerdote held 873,195 Tesla, Inc. (NASDAQ:TSLA) shares worth $593 million at the end of the second quarter of this year. At the same time, 60 out of the 873 hedge funds surveyed by Insider Monkey held a stake in the company.
Tesla, Inc. (NASDAQ:TSLA)’s largest shareholder by the second quarter was Catherine D. Wood’s Ark Investment Management who held 5.4 million shares worth $3.7 billion.
In a third quarter investor letter, Worm Capital LLC had the following to say about Tesla, Inc. (NASDAQ:TSLA):
“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…”
Tesla, Inc. (NASDAQ:TSLA)’s have grown by a remarkable 116% over the past year and in an October analyst note, RBC Capital raised the company’s price target to $800, citing healthy margins and potential gross margin improvement due to software products.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Mr. Sacerdote’s Stake Value: $836 million
Percentage of Mr. Sacerdote’s 13F Portfolio: 5.46%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is one of the world’s largest companies whose primary line of business is online retailing. Over the years, it has expanded its product portfolio to target other areas such as cloud computing and home entertainment. Amazon.com, Inc. (NASDAQ:AMZN) is based out of the United States and it is also known for its founder Mr. Jeffery P. Bezos, who is also one of the world’s richest men.
Amazon.com, Inc. (NASDAQ:AMZN) shares have grown by 6% over the past year, and Mr. Sacerdote’s holdings in the company come in the form of 243,244 shares that are worth $836 million and represent 5.46% of his portfolio. At the end of the second quarter of this year, 271 out of the 873 hedge funds polled by Insider Monkey held a stake in the company whose price target was lowered to $4,200 by Credit Suisse in October due to an expected increase in expenses.
Amazon.com, Inc. (NASDAQ:AMZN) largest shareholder is Alexander Becker’s Codex Capital who owns 2,850 shares worth $9.8 billion.
In its third-quarter investor letter, Madison Funds had the following to say about Amazon.com, Inc. (NASDAQ:AMZN):
“We did add a modest new position weight to the portfolio in the quarter in Amazon.com, Inc. stock (AMZN). We acknowledge that many aspects of Amazon’s merit as an investment are well appreciated. However, our work leads us to conclude that shares are attractive. Leadership positions in both e-commerce and cloud computing provide the company with significant durable competitive advantages in industries that we think can produce above average growth over the next decade. Over the past year, AMZN shares have trailed the market as investors debate near-term growth prospects following the pandemic-induced e-commerce demand. Additionally, margins have been depressed due to Amazon’s unprecedented increases in spending to build out fulfillment and in-house logistics capabilities – Amazon will build out more square footage this year and last than it did cumulatively over the previous 10 years, more than doubling its in-house delivery capacity. We like the investments Amazon is making and believe they will further advantage the company relative to other retailers, making it nearly impossible for competitors to match the same level of delivery speed and convenience. With its large and frequently engaged customer base, Amazon has multiple mechanisms to make money, including selling advertising and enhanced subscription services. Within the cloud business, we forecast Amazon Web Services (AWS) leveraging its strengths in Infrastructure-as-a-service (IaaS) to move into higher value segments of cloud computing (such as platform-as-a-service: PaaS), allowing the company to continue outgrowing the overall IT sector with strong profitability. While Amazon shares have performed extremely well over the long-term, we think near-term concerns about whether Amazon will earn a return on its accelerated investments provide an opportunity now for investors willing to look through the investment period. Our view is that the investments likely earn strong returns and extend Amazon’s competitive advantages and above average growth.”
Disclosure: None. You can also take a peek at the Top 10 SPACs to Buy According to Richard Gerson’s Falcon Edge Capital and 10 Best Stocks Under $10 According to Billionaire Daniel Och’s OZ Management.
