5 Stocks to Buy According to Brazilian Billionaire Jorge Paulo Lemann’s 3G Capital

1. Carvana Co. (NYSE: CVNA)

Lemann’s Stake Value: $86,019,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 22.22%
Number of Hedge Fund Holders: 63

Carvana Co. (NYSE: CVNA) and its subsidiaries offer an e-commerce platform in the United States for purchasing and selling used vehicles. The company was founded in 2012 and is placed first on the list of 10 stocks to buy according to Brazilian billionaire Jorge Paulo Lemann’s 3G Capital. Carvana Co. (NYSE: CVNA) shares have returned 74.14% to investors over the course of the past 12 months.

On August 18, Citi analyst Nicholas Jones raised the price target on Carvana Co. (NYSE: CVNA) to $405 from $375 and maintained a “Buy” rating on the shares. On August 13, Carvana Co. (NYSE: CVNA) announced that it issued 4.875% senior notes due 2029, whose principal amount is $750 million. The notes will begin paying interest on March 1, 2022, at a rate of 4.875% per year, payable semi-annually on March 1 and September 1 of each year. The money will be used for the general corporate purposes.

3G Capital holds 285,000 shares in Carvana Co. (NYSE: CVNA) worth over $86.02 million, representing 22.22% of their portfolio. The hedge fund has increased stake in the firm by 23% in the second quarter of 2021. In the second quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $8.90 billion in Carvana Co. (NYSE: CVNA), down from 64 the preceding quarter worth $7.54 billion.

Steel City Capital, in its first-quarter 2021 investor letter, mentioned Carvana Co. (NYSE: CVNA). Here is what Steel City Capital has to say about Carvana Co. in its investor letter:

“Carvana’s (CVNA) 4Q’20 results weren’t particularly great. EBITDA was negative ($70) million, a stark turnaround on a sequential basis from a first-ever EBITDA profit of $21 million in 3Q’20. The culprit was a steep drop off in retail unit GPU ($1,265 vs. $1,857) and wholesale unit GPU ($358 vs. $1,113) as some of the COVID-driven aberrations in the used car market began to abate.

The company’s presentation of EBITDA (calculated “bottom up”) is dubious, as it commingles non-operating items including mark-to-market changes in its retained securitization portfolio. With the exception of 1Q’20, when ABS markets were going haywire, this line item provided a tailwind throughout 2020, including a gain of $5 million in 4Q’20. Also on the non-operating self-help front, management released a reserve for vehicle service contract cancellations in 4Q’20, adding another $7 million to EBITDA, and boosting “Other” GPU by $96.…” (Click here to see the full text)

You can also take a peek at 10 Best Stocks to Buy According to Warren Buffett and 10 Best Stocks to Buy According to Steven Baughman’s Divisar Capital