In this article, we will discuss 5 large-cap stocks hedge funds are talking about. If you want our detailed background of these and other large-cap stocks, you can go directly to 10 Large-Cap Stocks Hedge Funds Are Talking About.
5. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Market Capitalization Since Feb. 25, 2022: $ 27.2B
Number of Hedge Fund Holders: 66
Vltava Fund, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. In its Q4 2021 investor letter, Vltava Fund described 2021 as a year of very strong growth in profitability among the companies they own in their portfolio, as those profits grew even faster than did the Fund’s NAV.
Vltava Fund mentioned Willis Towers Watson Public Limited Company (NASDAQ: WTW) and discussed its stance on the firm in that investor letter. Willis Towers Watson Public Limited Company is a London, United Kingdom-based multinational risk management, insurance brokerage, and advisory company with a $27.2 billion market capitalization. WLTW shares are down by 5.66% since the beginning of the year, while their 12-month losses are just over 1%.
Here is what Vltava Fund had to say about Willis Towers Watson Public Limited Company (NASDAQ: WTW) in its Q4 2021 investor letter:
“There were two new additions to the portfolio last year – (including) shares of the insurance broker Willis Towers Watson. I mentioned both purchases already in the previous newsletter to shareholders. At first sight, these were only minor changes. There were many more transactions in the portfolio over the past year, however. Most purchases were directed to shares we have already held in the portfolio. We have been purchasing virtually all the stocks we hold, many of them repeatedly. While we are by no means opposed to anything new and always are looking for new investment opportunities, we generally tend to gravitate to what we already have in the portfolio, to what we know well, and moreover what we see is working out well.”
4. Caesars Entertainment Inc. (NASDAQ:CZR)
Market Capitalization Since Feb. 25, 2022: $18.1 B
Number of Hedge Fund Holders: 72
Carillon Tower Advisers, an investment management firm, published its “Carillon Eagle Mid Cap Growth Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Mid-cap stocks overall posted solid gains in the final quarter of 2021. As was the case for the majority of the year, the Russell Midcap® Growth Index (up 2.85%) lagged behind its Russell Midcap® Value Index (up 8.54%) counterpart. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Carillon Eagle Mid Cap Growth Fund, in its Q4 2021 investor letter, mentioned Caesars Entertainment, Inc. (NASDAQ: CZR) and discussed its stance on the firm. Caesars Entertainment, Inc. is a Reno, Nevada-based hotel and casino entertainment company with an $18.1 billion market capitalization. CZR shares have lost 15.69% since the beginning of the year, are by nearly 16% over the past year.
Here is what Carillon Eagle Mid Cap Growth Fund had to say about Caesars Entertainment, Inc. (NASDAQ: CZR) in its Q4 2021 investor letter:
“Caesars Entertainment, a diversified casino-entertainment and resort company, underperformed in the period as its quarterly earnings update was viewed as disappointing by investors. The firm highlighted a number of one-time headwinds that ultimately weighed on margins, as well as some negative impacts brought on by the surge in COVID cases. Despite this, we believe that the sizeable overall margin improvements Caesars has realized coming out of the pandemic will ultimately prove sustainable in the long run.”
3. Twilio Inc. (NYSE:TWLO)
Market Capitalization Since Feb. 25, 2022: $30.3 B
Number of Hedge Fund Holders: 80
RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) lost 3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, and the Morningstar Large Growth Category lost 0.07%.
RiverPark Large Growth Fund mentioned Twilio Inc. (NYSE: TWLO) in its latest investor letter and discussed its stance on the firm. Twilio Inc. is a San Francisco, California-based cloud communications platform with a $30.3 billion market capitalization. TWLO shares have been hammered in 2022 thus far, losing 43.26%, dragging their 12-month losses down to 54.42%.
Here is what RiverPark Large Growth Fund had to say about Twilio Inc. (NYSE: TWLO) in its Q4 2021 investor letter:
“Twilio: TWLO shares were also down sharply to end the year. Just like after 1Q and 2Q, despite another quarterly beat in 3Q, management guidance–which we believe to be conservative– disappointed some investors. Third quarter revenue of $740 million was up 65% year over year, significantly exceeding management’s guidance of 50%-52% revenue growth. Management guided 4Q21 revenue to +40% revenue growth, which was ahead of sell side expectations, but likely below buy side expectations. Investors were also troubled by the departure of COO George Hu, who has been credited with rebuilding Twilio’s sales and marketing teams after arriving from SaleForce.com shortly after the company’s IPO in 2016.
The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”
2. Expedia Group, Inc. (NASDAQ:EXPE)
Market Capitalization Since Feb. 25, 2022: $31.1 B
Number of Hedge Fund Holders: 82
Heartland Advisors, an investment management firm, published its “Heartland Mid Cap Value Fund” fourth-quarter 2021 investor letter – a copy of which can be seen here. Security selection was mixed, with holdings in Materials and Consumer Discretionary bolstering returns; however, the portfolio couldn’t overcome weakness in Financials and Information Technology, and the Strategy lagged the Russell Mid Cap® Value Index for the quarter. The portfolio finished the year up more than 20% and kept pace with its benchmark.
In its Q4 2021 investor letter, Heartland Mid Cap Value Fund mentioned Expedia Group, Inc. (NASDAQ: EXPE) and discussed its stance on the firm. Expedia Group, Inc. is a Seattle, Washington-based online travel shopping company with a $31.1 billion market capitalization. EXPE shares are off by 4.73% return since the beginning of the year, but remain up by 6.31% over the past 12 months.
Here is what Heartland Mid Cap Value Fund had to say about Expedia Group, Inc. (NASDAQ: EXPE) in its Q4 2021 investor letter:
“The run-up in equity prices over the past year and a half has narrowed the pool of attractively valued businesses. Economically sensitive areas of the market, in particular, have seen valuations stretched—but the impact of investor exuberance is evident in share prices of companies throughout the broader market. In our view, the elevated valuations commanded by many stocks have heightened risks and dampened upside potential.
In response to this backdrop, we continue to focus on finding and owning companies that are poised to succeed against a variety of backdrops or those that are priced at significant discounts to peers regardless of the sector or industry. Recent addition Expedia Group, Inc. (EXPE) is an example of the type of business we’ve found attractive.”
1. Twitter, Inc. (NYSE:TWTR)
Market Capitalization Since Feb. 25, 2022: $28.2B
Number of Hedge Fund Holders: 83
RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) lost 3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, and the Morningstar Large Growth Category lost 0.07%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
RiverPark Large Growth Fund mentioned Twitter, Inc. (NYSE: TWTR) in its Q4 2021 investor letter and discussed its stance on the firm. Twitter, Inc. is a San Francisco, California-based social network company with a $28.2 billion market capitalization. TWTR shares have dipped by 21.73% since the beginning of the year, and by 50.55% over the past 12 months.
Here is what RiverPark Large Growth Fund had to say about Twitter, Inc. (NYSE: TWTR) in its Q4 2021 investor letter:
“Twitter: Despite reporting in-line third quarter results, TWTR shares struggled at the end of 2021. For TWTR, the declines could be attributed to a fear of continued headwinds from Apple’s iOS tracking changes, as well as the stock continuing to be a show-me story after posting two disappointing quarters since its investor day in February (prior to this in-line quarter), as well as its recent CEO change (founder Jack Dorsey stepped down and is being succeeded by long-time CTO Parag Agrawal). Investors continue to be concerned with the platform’s user engagement, as total monetizable daily active users (mDAU) grew 13% year over year to 211 million, in-line with expectations, but still below management’s long-term target of 20% growth. Management expects mDAU growth to accelerate, driven by continued economic reopening and new features such as Spaces and Communities and an increase in the number and penetration of Twitter Topics. For the quarter, revenue increased 37% year over year to $1.3 billion and 4Q guidance was strong at about 20% growth, as Twitter has less exposure to Apple’s ATT headwinds.
With $4.8 billion of TTM revenue (only 4% of Facebook’s revenue), the company has a large opportunity to take share in the $200 billion global digital advertising market that continues to flow to mobile, Twitter’s focus. As the company continues to launch and improve its products (including stories, audio chat, podcasting, video and subscriptions), its platform should become more compelling to both users and advertisers, allowing it to take advertising dollar share through increased user engagement and ad pricing. As Twitter showed this year, we believe that the company can generate 20%+ revenue growth while also driving operating leverage in its already highly profitable business model, generating expanding excess free cash flow growth over time (3Q OCF grew 81% year over year).”
You can also take a look at 10 Construction Stocks to Buy Now and 10 Stocks to Buy Now According to Wayne Yu’s BCK Capital.
