In this article, we discuss 5 new stock stock picks of billionaire Rob Citrone. If you want our detailed analysis of these stocks, go directly to 10 New Stock Picks of Billionaire Rob Citrone.
5. Palo Alto Networks, Inc. (NASDAQ:PANW)
Discovery Capital Management’s Stake Value: $7,622,000
Percentage of Discovery Capital Management’s 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 73
Palo Alto Networks, Inc. (NASDAQ:PANW) is a California-based multinational cybersecurity company, specializing in network security, cloud computing, and firewalls. Rob Citrone acquired 15,912 Palo Alto Networks, Inc. (NASDAQ:PANW) shares in the third quarter of 2021, worth $7.6 million, representing 0.57% of the billionaire’s total 13F holdings for the period.
Palo Alto Networks, Inc. (NASDAQ:PANW) announced on January 25 that the Department of Veterans Affairs selected the company to secure its expanded remote workforce, its network of internet of medical things, and the new electronic health record modernization program. The VA will adopt the products of Palo Alto Networks, Inc. (NASDAQ:PANW) in this multi year agreement, supporting the VA’s efforts to offer secure services to the U.S. veterans.
On January 24, Citi analyst Fatima Boolani initiated coverage of Palo Alto Networks, Inc. (NASDAQ:PANW) with a Buy rating and a $585 price target. The analyst is positive on the company’s valuation and growth potential and said that the stock “offers defensive exposure as software investors continue to rotate out of high multiple software assets”.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 73 hedge funds were long Palo Alto Networks, Inc. (NASDAQ:PANW), up from 69 funds in the quarter prior. David Blood and Al Gore’s Generation Investment Management held the leading stake in Palo Alto Networks, Inc. (NASDAQ:PANW) in the third quarter, with 1.6 million shares worth $773.3 million.
4. Visa Inc. (NYSE:V)
Discovery Capital Management’s Stake Value: $7,841,000
Percentage of Discovery Capital Management’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 143
Visa Inc. (NYSE:V) is a California-based multinational financial services company that offers credit cards and payment systems to customers worldwide. In Q3 2021, Discovery Capital Management acquired 35,200 shares of Visa Inc. (NYSE:V), worth $7.8 million, accounting for 0.58% of the fund’s 13F portfolio.
On January 27, Visa Inc. (NYSE:V) reported earnings for the fourth quarter, posting an EPS of $1.81, topping estimates by $0.11. The company’s revenue came in at $7.06 billion, up 24.13% year-over-year, outperforming estimates by $265 million.
Mizuho analyst Dan Dolev raised the price target on Visa Inc. (NYSE:V) on February 2 to $235 from $220 and kept a Neutral rating on the shares to account for the Q4 results and guidance.
Visa Inc. (NYSE:V) declared on January 27 a $0.375 per share quarterly dividend, in line with previous. The dividend is payable on March 1, to shareholders of record on February 11.
Among the hedge funds monitored by Insider Monkey in Q3 2021, 143 funds were bullish on Visa Inc. (NYSE:V), down from 162 funds in the quarter earlier. TCI Fund Management owned the leading stake in Visa Inc. (NYSE:V) in the third quarter of 2021, with roughly 20 million shares worth $4.4 billion.
Here is what Weitz Investment Management, Inc. has to say about Visa Inc. (NYSE:V) in its Q4 2021 investor letter:
“Reports to investors usually focus on the winners that prove the worthiness of the managers. It’s possible that we’ve been guilty of that on occasion, despite our best efforts to accurately convey what has worked and what hasn’t. This time, though, we are going to celebrate the great businesses we own that “went nowhere” in 2021. In a generally expensive market facing potentially strong headwinds in 2022, we find it very encouraging to own a number of proven winners whose stocks have been “resting” for the last year or so. They will not necessarily save us from markdowns during broad-based corrections, but they are companies that we believe can survive and grow business value through almost anything. They are the kinds of businesses that allow us to sleep well at night and not be tempted to sell at the wrong time. Here are some examples:
Established payments companies have been out of favor recently. Cross-border payments have been depressed with COVID disrupting international travel. These types of payments are particularly lucrative for Visa and their absence has impacted earnings. Further, we believe investors have overestimated the negative competitive impact of new fintech companies that have emerged over the past few years. Many of these “disrupters” depend on the Visa “rails” over which electronic payments travel, and these wily incumbents have a way of acquiring, copying or otherwise competing with upstarts.”
3. State Street Corporation (NYSE:STT)
Discovery Capital Management’s Stake Value: $8,472,000
Percentage of Discovery Capital Management’s 13F Portfolio: 0.63%
Number of Hedge Fund Holders: 42
State Street Corporation (NYSE:STT) is a Boston-based financial services and bank holding company that provides expertise in securities, investment management, stock trading, and the foreign exchange market. Rob Citrone’s Discovery Capital Management bought 100,000 State Street Corporation (NYSE:STT) shares in Q3 2021, worth $8.4 million, representing 0.63% of the fund’s Q3 investments.
Publishing its Q4 results on January 19, State Street Corporation (NYSE:STT) posted earnings per share of $2.00, beating estimates by $0.11. The $3.05 billion outperformed estimates by approximately $52 million.
Barclays analyst Jason Goldberg raised the price target on State Street Corporation (NYSE:STT) on January 3 to $130 from $110 and kept an Overweight rating on the shares. The analyst expects bank stocks to continue to outperform the market in 2022. He expects loan growth to accelerate and net interest margins to benefit from higher interest rates, despite some near-term uncertainty owing to the COVID-19 omicron variant.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 42 funds were bullish on State Street Corporation (NYSE:STT), up from 37 funds in the quarter earlier. Harris Associates, the largest State Street Corporation (NYSE:STT) stakeholder, held 4.8 million shares worth $412.2 million in the third quarter of 2021.
2. Couchbase, Inc. (NASDAQ:BASE)
Discovery Capital Management’s Stake Value: $17,095,000
Percentage of Discovery Capital Management’s 13F Portfolio: 1.27%
Number of Hedge Fund Holders: 13
Couchbase, Inc. (NASDAQ:BASE), a California-based software company, was added to Rob Citrone’s portfolio in the third quarter, with the billionaire buying 549,492 shares worth over $17 million, representing 1.27% of his total 13F securities.
On January 12, Barclays analyst Raimo Lenschow lowered the price target on Couchbase, Inc. (NASDAQ:BASE) to $30 from $41 and kept an Overweight rating on the shares. The analyst says the main question for software investors in 2022 is not around end demand, as there are “no issues there”, but valuation for the sector remains a concern.
Adams Street Partners is the biggest stakeholder of Couchbase, Inc. (NASDAQ:BASE) as of Q3 2021, with 1.78 million shares worth roughly $50 million. Overall, 13 hedge funds were bullish on Couchbase, Inc. (NASDAQ:BASE) in the third quarter of 2021, with stakes totaling approximately $107 million.
Here is what Baron Discovery Fund has to say about Couchbase, Inc. (NASDAQ:BASE) in its Q4 2021 investor letter:
“In the fourth quarter, the Fund was down 3.13% versus the Russell 2000 Growth Index, which was roughly unchanged. For the full-year 2021, the Fund was up 4.89% and beat the 2.83% return of the Russell 2000 Growth Index by 2.06%. The lion’s share of the underperformance in the fourth quarter was due to stock selection in the Information Technology (IT) and Health Care sectors. In IT, there was a fairly even spread of winners and losers for the quarter, though IPO profit taking affected Couchbase, Inc. after big third quarter gains.
Couchbase, Inc. provides modern database software that collects and stores data and powers enterprise applications, for which there is no tolerance for disruption, inaccuracy, or downtime. We wrote about our initial investment in this exciting company in our last quarterly letter. Its solution is fast (it utilizes caching, or retrieval from memory versus hard drives), scales to large amounts of records (which is expensive for old-style relational databases, and not even possible with some of the other NoSQL solutions), and works in all settings (on-premise, in the cloud, or in mixed hybrid environments). Couchbase, with revenues of $150 million, is addressing a large total market of $62 billion, which is slowly migrating to the cloud and using less rigid database structures. We added to our investment in the quarter when shares sold off due to multiple compression in the software sector. We believe that the selling was significantly overdone, and Couchbase now sells at a multiple that is about 25% of its main competitor. We believe that on an absolute and relative basis this 25%-plus grower is meaningfully undervalued.”
1. Five9, Inc. (NASDAQ:FIVN)
Discovery Capital Management’s Stake Value: $34,316,000
Percentage of Discovery Capital Management’s 13F Portfolio: 2.56%
Number of Hedge Fund Holders: 76
Headquartered in San Ramon, California, Five9, Inc. (NASDAQ:FIVN) is a provider of cloud software for contact centers in the United States and internationally. Heading into Q3 2021, Rob Citrone purchased 214,827 Five9, Inc. (NASDAQ:FIVN) shares, worth $34.3 million, accounting for 2.56% of the billionaire’s 13F securities.
On February 1, William Blair analyst Matt Stotler initiated coverage of Five9, Inc. (NASDAQ:FIVN) with an Outperform rating and no price target. According to the analyst, Five9, Inc. (NASDAQ:FIVN) is a leader in the cloud contact center market and has a strong ability to retain and expand its customer relationships, illustrated by its 123% dollar-based retention rate as of September 30, 2021. He believes that the opportunity for Five9, Inc. (NASDAQ:FIVN) is “substantial and could continue to grow” as it executes on its strategic growth initiatives and explores new products.
According to the Q3 database of Insider Monkey, 76 hedge funds were long Five9, Inc. (NASDAQ:FIVN), up from 45 funds in the quarter earlier. Alkeon Capital Management held the biggest stake in Five9, Inc. (NASDAQ:FIVN) in Q3 2021, with more than 3 million shares worth $480.6 million.
Here is what ClearBridge Investments has to say about Five9, Inc. (NASDAQ:FIVN) in its Q1 2021 investor letter:
“Five9 is a cloud-based contact center as a service software provider that is replacing aging on-premise legacy solutions that dominate the installed base. Companies are being forced to modernize and cloud penetration is still low; Five9 is positioned to benefit and should see further growth driven by its cross-selling add-on modules and an AI product that generates high revenue.”
You can also take a look at 10 Best Dividend Stocks According to Thomas Steyer’s Farallon Capital and 10 Stocks to Sell According to Billionaire Daniel Sundheim.
