In this article, we will discuss 5 stocks to buy according to Brazilian billionaire Jorge Paulo Lemann’s 3G Capital. If you want to read our detailed analysis of Lemann’s history, investment philosophy, and hedge fund performance, go directly to 10 Stocks to Buy According to Brazilian Billionaire Jorge Paulo Lemann’s 3G Capital.
5. Snowflake Inc. (NYSE: SNOW)
Lemann’s Stake Value: $21,762,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 5.62%
Number of Hedge Fund Holders: 63
Snowflake Inc. (NYSE: SNOW) delivers a cloud-based data platform internationally. It was founded in 2012 and is placed fifth on the list of 10 stocks to buy according to Brazilian billionaire Jorge Paulo Lemann’s 3G Capital. Snowflake Inc. (NYSE: SNOW) shares have gained about 19.60% in value over the last 3 months.
On August 23, Rosenblatt analyst Blair Abernethy raised the price target on Snowflake Inc. (NYSE: SNOW) to $295 from $265 and maintained a “Buy” rating on the shares.
On August 25, Snowflake Inc. (NYSE: SNOW) posted earnings for the second quarter of 2021. The revenue over the period was $272.2 million, that doubled YoY, surpassing the predictions by $15.5 million. The loss per share was $0.64 as compared to $0.70 per share loss reported last year. For the quarter the product revenue increased 103% YoY to $254.6 million.
The hedge fund chaired by Jorge Paulo Lemann holds 90,000 shares in Snowflake Inc. (NYSE: SNOW) worth over $21.76 million. In addition, 3G Capital stake in Snowflake Inc. (NYSE: SNOW) shares increased by 125% in the second quarter of 2021. Out of the hedge funds being tracked by Insider Monkey, Altimeter Capital Management is a leading shareholder in Snowflake Inc. (NYSE: SNOW) with 24.95 million shares worth more than $6.03 billion.
RiverPark Funds, in its first-quarter 2021 investor letter, mentioned Snowflake Inc. (NYSE: SNOW). Here is what the fund said:
“We also established a position in Snowflake during the quarter. Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a-service.” The data warehousing market—created by the massive, growing amount of user, customer, and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.…” (Click here to see the full text)
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.”
3. Bill.com Holdings, Inc. (NYSE: BILL)
Lemann’s Stake Value: $65,029,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 16.8%
Number of Hedge Fund Holders: 53
Bill.com Holdings, Inc. (NYSE: BILL) supplies small and medium businesses with cloud-based software that automates back-office financial activities. It was founded in 2006 and is ranked third on the list of 10 stocks to buy according to Brazilian billionaire Jorge Paulo Lemann’s 3G Capital. Bill.com Holdings, Inc. (NYSE: BILL) currently has a $20.47 billion market capitalization and was able to deliver a 110.84% return in the past 12 months.
On August 19, Jefferies analyst Samad Samana upgraded Bill.com Holdings, Inc. (NYSE: BILL) to “Buy” from “Hold” and gave a price target of $250, up from $155. On August 9, Bill.com Holdings, Inc. (NYSE: BILL) was selected by KPMG Spark, a managed accounting solution inside KPMG, to provide automated bill payment services.
Jorge Paulo Lemann’s 3G Capital holds 355,000 shares in Bill.com Holdings, Inc. (NYSE: BILL), worth over $65.03 million. This represents 16.8% of their portfolio. 3G Capital’s stake in Bill.com Holdings, Inc. (NYSE: BILL) increased by 3% in the second quarter of 2021, the latest data reveals. Bill.com Holdings, Inc. (NYSE: BILL) is also getting the attention of the smart money, as 53 hedge funds tracked by Insider Monkey reported owning stakes in the company in the second quarter of 2021, up from 51 funds a quarter earlier.
2. Sea Limited (NYSE: SE)
Lemann’s Stake Value: $79,634,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 20.57%
Number of Hedge Fund Holders: 104
Through its subsidiaries, Sea Limited (NYSE: SE) operates in the digital entertainment, e-commerce, and financial services industries. It was incorporated in 2009 and is ranked second on the list of 10 stocks to buy according to Brazilian billionaire Jorge Paulo Lemann’s 3G Capital. Sea Limited (NYSE: SE) shares have gained about 96.23% over the last 12 months.
On August 18, Cowen analyst John Blackledge raised the price target on Sea Limited (NYSE: SE) to $355 from $345 and maintained an “Outperform” rating on the shares. On August 17, Sea Limited (NYSE: SE) posted earnings for the second quarter of 2021. It declared earnings per share of -$0.61, beating the estimates by $0.07. The revenue over the period was $2.28 billion, up 158.5% YoY, surpassing the predictions by $260 million.
3G Capital holds 290,000 shares in Sea Limited (NYSE: SE) worth $79.63 million, representing 20.57% of their portfolio. Hedge funds are loading up on Sea Limited (NYSE: SE), as Insider Monkey’s data shows that 104 hedge funds held stakes in the company as of the second quarter of 2021, compared to 98 funds at the end of the first quarter of 2021.
In its second-quarter, 2021 investor letter Tao Value, mentioned Sea Limited (NYSE: SE). Here is what the fund said:
“Sea continued to execute above expectation. The gaming business continued strong momentum, recording bookings of $1.1 billion, growing 117% y-o-y. The major franchise Free Fire showed no sign of slowing down in established ASEAN & LatAm market and received positive reception from new markets
like US. On e-commerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now top downloaded e-commerce app in Brazil, almost 2x of the second-place local leader Mercado Libre (MELI). I also see the most promising development is in its FinTech business – SeaMoney, which more than doubled its revenue in Q1 2021 from the previous quarter! With online lending products rolling out, SeaMoney is poised to grow rapidly, becoming the 3rd growth curve for Sea.”
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
