In this article, we discuss 5 software stocks to buy now according to Jim Davidson’s Silver Lake Partners. If you want to read our detailed analysis of Davidson’s history and hedge fund performance, go directly to 10 Software Stocks to Buy Now According to Jim Davidson’s Silver Lake Partners.
5. Qualtrics International Inc. (NASDAQ:XM)
Silver Lake Partners’ Stake Value: $840,343,000
Percentage of Silver Lake Partners’ 13F Portfolio: 3.95%
Number of Hedge Fund Holders: 38
Qualtrics International Inc. (NASDAQ:XM) manages customer, employee, product, and brand experiences as a management platform. BofA analyst Adam Bergere resumed coverage of Qualtrics International Inc. (NASDAQ:XM) on March 31, maintaining a Buy recommendation on the stock with a price target of $40. According to the analyst in a research note, Qualtrics International Inc. (NASDAQ:XM)’s superiority was shown by more than 17K clients, which included 89% of the Fortune 100 companies.
Qualtrics International Inc. (NASDAQ:XM) is getting the attention of the smart money, as 38 hedge funds tracked by Insider Monkey reported owning stakes in Qualtrics International Inc. (NASDAQ:XM) at the end of the fourth quarter, up from 26 funds a quarter earlier.
According to the 13F filings for the fourth quarter of 2021, Silver Lake Partners held over 23.74 million shares of Qualtrics International Inc. (NASDAQ:XM), amounting to more than $840.34 million and representing 3.95% of the fund’s portfolio.
ClearBridge Investments, in its Q2 2021 investor letter, mentioned Qualtrics International Inc. (NASDAQ:XM). Here is what the firm has to say:
“On the sell side, we closed out of Qualtrics, an experience management software company, where we were unable to build a sufficient position following its successful IPO.”
4. SolarWinds Corporation (NYSE:SWI)
Silver Lake Partners’ Stake Value: $872,314,000
Percentage of Silver Lake Partners’ 13F Portfolio: 4.1%
Number of Hedge Fund Holders: 22
SolarWinds Corporation (NYSE:SWI) is a software firm based in the United States that helps organizations manage their networks, systems, and IT infrastructure. SolarWinds Corporation (NYSE:SWI) was in 22 hedge funds’ portfolios at the end of the fourth quarter of 2021. Comparatively, there were 15 hedge funds in our database with SolarWinds Corporation (NYSE:SWI) holdings at the end of the previous quarter.
SolarWinds Corporation (NYSE:SWI)’s price objective was decreased to $15 from $18 on February 22 by Truist analyst Terry Tillman, who maintained a Hold rating on the stock. His lower price estimate indicated a wide-ranging software value decline that has been happening for several months across all software growth sectors.
Silver Lake Partners bought 61.47 million shares of SolarWinds Corporation (NYSE:SWI) in the fourth quarter, making it the most significant stakeholder of the company.
3. EverCommerce Inc. (NASDAQ:EVCM)
Silver Lake Partners’ Stake Value: $1,056,591,000
Percentage of Silver Lake Partners’ 13F Portfolio: 4.97%
Number of Hedge Fund Holders: 11
EverCommerce Inc. (NASDAQ:EVCM) delivers small and medium-sized enterprises with integrated software-as-a-service solutions. Elite hedge funds hold significant stakes in EverCommerce Inc. (NASDAQ:EVCM). Among the hedge funds tracked by Insider Monkey, Silver Lake Partners is a leading shareholder in EverCommerce Inc. (NASDAQ:EVCM), with 67.09 million shares worth more than $1.06 billion.
On March 15, Deutsche Bank analyst Brad Zelnick maintained a Buy recommendation on EverCommerce Inc. (NASDAQ:EVCM) but lowered his price objective to $16 from $18. According to the analyst, the speed with which EverCommerce Inc. (NASDAQ:EVCM) invests, especially given the present market climate, would likely temper with some sales growth euphoria.
Hedge fund sentiment has lately declined for EverCommerce Inc. (NASDAQ:EVCM). Long hedge fund positions fell to 11 at the end of the fourth quarter, from 12 at the end of the previous quarter.
2. VMware, Inc. (NYSE:VMW)
Silver Lake Partners’ Stake Value: $4,872,849,000
Percentage of Silver Lake Partners’ 13F Portfolio: 22.94%
Number of Hedge Fund Holders: 50
VMware, Inc. (NYSE:VMW) is a software firm providing solutions that assist businesses to upgrade their technology and manage cloud-based IT resources. VMware, Inc. (NYSE:VMW) and Alphabet Inc. (NASDAQ:GOOG) announced an extended relationship on March 16 to help clients with app modernization and cloud transition.
50 hedge funds in our database held stakes in VMware, Inc. (NYSE:VMW) at the end of the fourth quarter, compared to 31 funds in the third quarter.
Silver Lake Partners added VMware, Inc. (NYSE:VMW) to its portfolio in the fourth quarter by buying 42.05 million shares. With a $4.87 billion investment, Silver Lake Partners is the company’s largest shareholder.
On February 25, Mizuho analyst Gregg Moskowitz cut his price objective on VMware, Inc. (NYSE:VMW) from $135 to $125 and maintained a Neutral rating on the shares. In a research note to investors, Moskowitz stated that the firm posted a moderate revenue increase in Q4, despite billings growth being lower than projected.
ClearBridge Investments, in its third quarter 2021 investor letter, mentioned VMware, Inc. (NYSE:VMW). Here is what the fund said:
“To make room for Netflix and better concentrate the Strategy in our highest-conviction names, we exited positions in software makers VMware. VMware, best known for its system visualization software, is in the earlier stages of an on-premise to cloud transition that could add volatility to growth and cash flow in coming years. At the same time, the company also recently announced several key leadership changes and will have higher financial leverage following the upcoming spinoff from Dell — expected in the fourth quarter.”
1. Unity Software Inc. (NYSE:U)
Silver Lake Partners’ Stake Value: $5,002,422,000
Percentage of Silver Lake Partners’ 13F Portfolio: 23.55%
Number of Hedge Fund Holders: 36
Unity Software Inc. (NYSE:U) is a company that develops video game software. It creates, runs, and monetizes interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices using software solutions.
36 out of the 924 hedge funds held stakes in Unity Software Inc. (NYSE:U) in the fourth quarter of 2021, worth $7.43 billion, compared to the same number of funds in the preceding quarter, holding stakes in Unity Software Inc. (NYSE:U) valued at $7.90 billion.
Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners is the leading stakeholder of Unity Software Inc. (NYSE:U), with shares worth $5 billion. It is followed by ARK Investment Management, holding a position valued at $1.11 billion.
You can also take a peek at 10 Dividend Stocks to Buy According to Stuart Zimmer’s Zimmer Partners and 10 Technology Stocks to Buy According to Kevin Mccarthy’s Breakline Capital.
