4. Futu Holdings Limited (NASDAQ: FUTU)
Lemann’s Stake Value: $25,520,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 6.59%
Number of Hedge Fund Holders: 31
Futu Holdings Limited (NASDAQ: FUTU) runs an online brokerage and wealth management platform globally. It was incorporated in 2007 and is ranked fourth on the list of 10 stocks to buy according to Brazilian billionaire Jorge Paulo Lemann’s 3G Capital. Futu Holdings Limited (NASDAQ: FUTU) shares have offered investors returns exceeding 221.61% over the course of the past 12 months.
On August 2, Bocom analyst Jingyi Zhang upgraded Futu Holdings to “Buy” from “Neutral” and gave a price target of $142.
3G Capital holds 142,500 shares in Futu Holdings Limited (NASDAQ: FUTU) worth over $25.52 million, representing 6.59% of their investment portfolio. The hedge fund has increased its stake in Futu Holdings Limited (NASDAQ: FUTU) by 90% in the second quarter of 2021. As of the second quarter of 2021, 31 hedge funds in Insider Monkey’s database of 873 funds held stakes in Futu Holdings Limited (NASDAQ: FUTU) compared to 26 funds in the first quarter.
Tao Value, in its first-quarter 2021 investor letter, mentioned Futu Holdings Limited (NASDAQ: FUTU). Here is what the fund said:
“Futu is a new “Opportunistic” position. It is an HK based online brokerage & wealth management platform with deep root in technology. Futu sits in the confluence of 3 strong favorable forces of Meteorology, Topography & Commander, yet was underpriced at the time of our entry. In terms of Meteorology, there is a huge addressable market of Chinese domestic middle to upper classes’ wealth being deployed to overseas assets allocation in the next decade. Additionally, the incumbents being disrupted are extremely weak in their digital transformation. On Topography, Futu’s user-centric product design built an intuitive front end and great user experience, while the digital native development framework built solid & reliable back end (including a self-developed order routing & execution system for HK market). This is a rare combination compared to both offline incumbents (who lack flashy front end & UX) & other new online disrupters (who lack solid infrastructure). On Commander factor, founder CEO Li Hua was a Tencent engineer in its early days with deep knowledge in product design and development. Li is said to be a fanatic product manager, to this day still at the front-line, alpha testing any new features. Based on analyses of these factors, I think Futu could compound its revenue at a very high rate with very high certainty and with strong operating leverage, putting our entry price very attractive compared to earning power in 3-5 years. Yet just as we finished building a small position, the price started to take off and more than tripled in a month. When such price action happens, it is obvious that Mr. Market has turned very euphoric to this name. I decided to trim but kept a reasonable position given its growth certainty.”
