In this article, we discuss 5 new stock picks of Suraj Parkash Chopra’s Force Hill Capital Management. If you want our detailed analysis of these stocks, go directly to 10 New Stock Picks of Suraj Parkash Chopra’s Force Hill Capital Management.
5. Lumentum Holdings Inc. (NASDAQ:LITE)
Force Hill Capital Management’s Stake Value: $15,580,000
Percentage of Force Hill Capital Management’s 13F Portfolio: 3.84%
Number of Hedge Fund Holders: 33
Lumentum Holdings Inc. (NASDAQ:LITE), an American telecommunications company, is one of the newest arrivals in Suraj Chopra’s third quarter portfolio, with his hedge fund acquiring a $15.5 million position in the company. The stock accounts for 3.84% of Force Hill Capital Management’s Q3 investments.
Lumentum Holdings Inc. (NASDAQ:LITE) reported earnings for Q3 on November 4, posting an EPS of $1.79, exceeding estimates by $0.24. The quarterly revenue totaled $448.40 million, surpassing estimated revenue by $8.88 million.
Craig-Hallum analyst Richard Shannon raised the price target on Lumentum Holdings Inc. (NASDAQ:LITE) to $130 from $110 and kept a Buy rating on the shares on January 4. The analyst observed that Lumentum Holdings Inc. (NASDAQ:LITE) has gained over $20/share since early December and is back to levels it achieved since January 2021, owing to a stronger telecom environment in 2022, coupled with a better supply situation for ROADMs.
ValueAct Capital is one of the largest Lumentum Holdings Inc. (NASDAQ:LITE) stakeholders from the third quarter, holding 1 million shares worth $83.5 million. Overall, 33 hedge funds in the Q3 database of Insider Monkey reported owning stakes totaling $408.7 million in Lumentum Holdings Inc. (NASDAQ:LITE).
4. QUALCOMM Incorporated (NASDAQ:QCOM)
Force Hill Capital Management’s Stake Value: $17,837,000
Percentage of Force Hill Capital Management’s 13F Portfolio: 4.40%
Number of Hedge Fund Holders: 70
Suraj Parkash Chopra’s Force Hill Capital Management acquired 138,150 QUALCOMM Incorporated (NASDAQ:QCOM) shares during the third quarter of 2021, valued at $17.8 million, representing 4.40% of the fund’s total 13F securities for the period. QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based semiconductor company, offering expertise in wireless technology and software as well.
QUALCOMM Incorporated (NASDAQ:QCOM) announced on January 4 that it is partnering with Microsoft Corporation (NASDAQ:MSFT) to integrate mixed reality software and phone-based AR platforms to create customized Snapdragon augmented reality chips. These chips will power AR glasses in Microsoft Corporation (MSFT)’s ecosystem in the future.
In its third quarter earnings report, published on November 4, QUALCOMM Incorporated (NASDAQ:QCOM) posted an EPS of $2.55, exceeding estimates by $0.29. The Q3 revenue came in at $9.32 billion, gaining 43.36% from the prior-year quarter, outperforming estimates by $476.91 million.
Barclays analyst Blayne Curtis raised the price target on QUALCOMM Incorporated (NASDAQ:QCOM) to $185 from $180 and kept an Equal Weight rating on the shares on January 12. The analyst sees “positive outlooks providing some relief” for the semiconductor group but still struggles with “just how much upside is left as cyclicality still looms for many names.
70 hedge funds were bullish on QUALCOMM Incorporated (NASDAQ:QCOM) in the third quarter of 2021, with stakes amounting to $3.5 billion. Renaissance Technologies is one of the biggest QUALCOMM Incorporated (NASDAQ:QCOM) stakeholders, with 3.58 million shares worth $462 million.
Here is what ClearBridge Investments has to say about QUALCOMM Incorporated (NASDAQ:QCOM) in its Q1 2021 investor letter:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurts wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
3. KLA Corporation (NASDAQ:KLAC)
Force Hill Capital Management’s Stake Value: $19,238,000
Percentage of Force Hill Capital Management’s 13F Portfolio: 4.75%
Number of Hedge Fund Holders: 44
KLA Corporation (NASDAQ:KLAC) is a company providing process control and yield management systems to the semiconductor and nanoelectronics industries. Force Hill Capital Management purchased a $19.2 million stake in KLA Corporation (NASDAQ:KLAC) during the third quarter of 2021, which represents 4.75% of the fund’s Q3 investments.
On November 4, KLA Corporation (NASDAQ:KLAC) announced a per share quarterly dividend of $1.05, in line with previous. The dividend was paid on December 1 to shareholders of record on November 15.
KLA Corporation (NASDAQ:KLAC) reported its Q3 financial results on October 27. The company posted earnings per share of $4.64, beating estimates by $0.12. The quarterly revenue came in at $2.08 billion, up 35.44% from the prior-year quarter, outperforming estimates by $40.84 million.
Barclays analyst Blayne Curtis raised the price target on KLA Corporation (NASDAQ:KLAC) to $425 from $350 and kept an Equal Weight rating on the shares on January 12.
A total of 44 hedge funds reported owning stakes in KLA Corporation (NASDAQ:KLAC), valued at $1.84 billion. Alkeon Capital Management is the largest stakeholder of the company, with 1.6 million shares worth $551.5 million.
Here is what Palm Capital has to say about KLA Corporation (NASDAQ:KLAC) in its Q2 2021 investor letter:
“A final example of our thinking is in the semiconductor industry. Because of the extreme complexity and significant costs in the manufacturing process, the industry has become highly specialized. It has fragmented into three types of companies – the designers of chips, the manufacturers, and those that make equipment for the manufacturers.
Revenue for designers is somewhat stable because of patents. And even when patents expire, designs are not easily copied, and customers don’t easily switch because this would typically involve a redesign of their product and the risk that the new design does not work as well. However, revenue is still dependent on the length of the lifecycle of end products they are used for, how long it takes for those products to be replaced with new technology and the success of designers’ R&D into new designs. So, while near term revenue and profit margins are typically stable, medium to long term revenue and profits are uncertain. And the large customers in this industry such as Apple, Google and Amazon are all beginning to design their own chips, raising this uncertainty…
…On the other hand, revenue and profits for the companies that design and manufacture equipment for the manufacturers are steadier. An example of a company we like in this space is KLA. KLA provides tools and solutions to help manufacturers monitor and improve their highly complex manufacturing process and reduce costs. These are critical services to the manufacturers. Their tools are found in every major manufacturer globally. And the uniqueness of these tools is evidenced by KLA’s market share which is more than four times its nearest competitor. Regardless of which design is successful in the future or which manufacturer manages to take the lead, KLA’s tools will almost certainly still be needed. Its revenues and profits are less affected by technological change and therefore less uncertain that that of the designers and manufacturers.”
2. Analog Devices, Inc. (NASDAQ:ADI)
Force Hill Capital Management’s Stake Value: $21,516,000
Percentage of Force Hill Capital Management’s 13F Portfolio: 5.31%
Number of Hedge Fund Holders: 74
Suraj Chopra’s Force Hill Capital Management owns a $21.5 million stake in Analog Devices, Inc. (NASDAQ:ADI), buying 128,470 shares of the company during the third quarter. The stock accounts for 5.31% of the fund’s Q3 portfolio. Analog Devices, Inc. (NASDAQ:ADI) is a Massachusetts-based semiconductor company, with expertise in data conversion, signal processing, and power management technology.
Analog Devices, Inc. (NASDAQ:ADI), on November 23, declared a per share quarterly dividend of $0.69, which was paid on December 14 to shareholders of record on December 3.
Announcing its Q3 results on November 23, Analog Devices, Inc. (NASDAQ:ADI) published earnings per share of $1.73, beating estimates by $0.03. Revenue over the period increased 53.28% year-over-year, reaching $2.34 billion, surpassing estimates by $30.81 million.
Barclays analyst Blayne Curtis on January 12 lowered the price target on Analog Devices, Inc. (NASDAQ:ADI) to $180 from $195 and kept an Overweight rating on the shares.
David Blood and Al Gore’s Generation Investment Management is the leading Analog Devices, Inc. (NASDAQ:ADI) stakeholder from the third quarter of 2021, with 3.8 million shares worth $641.8 million. Overall, 74 hedge funds were long Analog Devices, Inc. (NASDAQ:ADI) as of Q3, up from 62 funds in the prior quarter.
Here is what Madison Funds has to say about Analog Devices, Inc. (NASDAQ:ADI) in its Q3 2021 investor letter:
“At its 2017 investor day, Analog Device’s VP of Automotive, Mark Gill, described how the company’s content on well-equipped electric vehicles was $600 per car compared to $250 per car for the traditional 2017 internal combustion engine car. Since then, Analog has highlighted the success of its EV battery management systems (BMS) product nearly every quarter. The BMS product is hardware and software that manages the power into and out of the battery systems. It’s the brains of the operation. Analog says it’s on its fifth generation BMS product, that it has the no. 1 market share in high voltage products, and that it is on 5 of the top 10 selling EVs. While we think that the BMS product is just 1 to 1.5% of Analog’s product mix, we think that it could add nearly a point of revenue growth per year to the company’s top-line given the expected ramp in EV production. This is a material amount of growth atop an already nicely growing company revenue line.”
1. Microchip Technology Incorporated (NASDAQ:MCHP)
Force Hill Capital Management’s Stake Value: $25,291,000
Percentage of Force Hill Capital Management’s 13F Portfolio: 6.24%
Number of Hedge Fund Holders: 41
Microchip Technology Incorporated (NASDAQ:MCHP) is a new arrival in Force Hill Capital Management’s third quarter portfolio, with the hedge fund buying 164,775 shares of the company, worth $25.2 million, representing 6.24% of the total 13F securities for the period. Microchip Technology Incorporated (NASDAQ:MCHP) is an American company manufacturing microcontrollers, embedded security devices, radio frequency devices, battery management analog devices, and wireless products.
Microchip Technology Incorporated (NASDAQ:MCHP) declared a $0.232 quarterly dividend per share on November 4, which reflects a 6.2% increase from the prior dividend. The dividend was paid on December 3 to shareholders of record on November 17. On November 8, Microchip Technology Incorporated (NASDAQ:MCHP) also announced a $4 billion stock repurchase plan.
Publishing its third quarter results on November 4, Microchip Technology Incorporated (NASDAQ:MCHP) posted earnings per share of $1.07, beating estimates by $0.01. The $1.65 billion revenue gained almost 26% from the prior-year quarter, exceeding estimates by $138,550.
Jefferies analyst Mark Lipacis on December 1 raised the price target on Microchip Technology Incorporated (NASDAQ:MCHP) to $109 from $98 and kept a Buy rating on the shares after the company committed to 7% per quarter dividend increases and the immediate launch of share buybacks based on receiving investment grade ratings from Moody’s and Fitch, which it did in mid-November. Microchip Technology Incorporated (NASDAQ:MCHP) is the analyst’s top stock pick in terms of risk/reward.
Kerr Neilson’s Platinum Asset Management is the largest stakeholder of Microchip Technology Incorporated (NASDAQ:MCHP), with a $301.75 million position in the company. Overall, 41 hedge funds were bullish on the stock in the third quarter.
You can also take a look at 10 New Stock Picks of Brian Higgins’ King Street Capital and 10 Small-Cap Stocks to Buy According to Billionaire Steve Cohen.
