In this article, we discuss 5 stocks to buy according to Kevin McCarthy’s Breakline Capital. If you want to read our detailed analysis of McCarthy’s history, investment philosophy, and hedge fund performance, go directly to 10 Stocks to Buy According to Kevin McCarthy’s Breakline Capital.
5. Jabil Inc. (NYSE:JBL)
Breakline Capital’s Stake Value: $4,395,000
Percentage of Breakline Capital’s Portfolio: 6.74%
Number of Hedge Fund Holders: 45
Jabil Inc. (NYSE:JBL) is a global provider of electronic manufacturing services and solutions. Overall, 45 hedge funds tracked by Insider Monkey were bullish on Jabil Inc. (NYSE:JBL) in Q1 2022, up from 26 in the previous quarter. These stakes hold a consolidated value of over $766.29 million.
Goldman Sachs analyst Mark Delaney maintained his Buy rating on Jabil Inc. (NYSE:JBL) but decreased his price objective to $69 from $78 on June 1. Due to heightened supply chain limitations in the short term and weaker demand in the longer term, Delaney cut his automobile and industrial technology predictions and price targets.
Kevin McCarthy bought an additional 22,745 shares in Jabil Inc. (NYSE:JBL) to raise Breakline Capital’s total position to nearly 71,205 shares. Steve Cohen’s Point72 Asset Management is Jabil Inc. (NYSE:JBL)’s most significant stakeholder, with 3.02 million shares worth $186.47 million.
4. Applied Materials, Inc. (NASDAQ:AMAT)
Breakline Capital’s Stake Value: $4,625,000
Percentage of Breakline Capital’s Portfolio: 7.09%
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) serves the semiconductor, display, and related sectors with production equipment, services, and software. On June 9, Applied Materials, Inc. (NASDAQ:AMAT) issued a quarterly dividend of $0.26 per share, in line with the previous.
Breakline Capital upped its Applied Materials, Inc. (NASDAQ:AMAT) stake by 185% in the first quarter, adding 22,749 shares. Kevin McCarthy held a total of 35,092 shares in the company, worth $4.63 million.
Following the April quarter results, Citi analyst Atif Malik maintained a Buy rating on Applied Materials, Inc. (NASDAQ:AMAT) but decreased his price objective to $160 from $175. The analyst cut the target to reflect lower market figures.
In Q1 2022, the number of hedge funds tracked by Insider Monkey holding stakes in Applied Materials, Inc. (NASDAQ:AMAT) reduced to 74 from 78 in the previous quarter. The total value of these stakes is over $4.30 billion, down from $5.44 billion in Q4 2021.
3. Microsoft Corporation (NASDAQ:MSFT)
Breakline Capital’s Stake Value: $5,149,000
Percentage of Breakline Capital’s Portfolio: 7.9%
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) is a technology business that provides personal computers, cloud computing platforms, and software. DocuSign, Inc. (NASDAQ:DOCU) and Microsoft Corporation (NASDAQ:MSFT) announced an expansion of their global strategic relationship on June 7. New DocuSign Agreement Cloud connectors and capabilities will be available across Microsoft’s business platforms as part of the extended cooperation.
Microsoft Corporation (NASDAQ:MSFT) was assigned an Overweight rating by Barclays analyst Raimo Lenschow on June 10, although he reduced his price target from $363 to $335. According to the analyst, investors are overly focused on Azure for Microsoft Corporation (NASDAQ:MSFT)’s investment thesis.
At the end of the first quarter of 2022, 259 hedge funds in the database of Insider Monkey held stakes worth $65.64 billion in Microsoft Corporation (NASDAQ:MSFT), down from 262 the preceding quarter worth $75.67 billion.
Breakline Capital first bought a stake in Microsoft Corporation (NASDAQ:MSFT) in the fourth quarter of 2017. However, the hedge fund lightened its exposure in the first quarter of 2022, reducing its stake by 26% to 16,700 shares valued at $5.15 million.
In its Q1 2022 investor letter, Polen Capital mentioned Microsoft Corporation (NASDAQ:MSFT). Here is what the fund said:
“Microsoft’s business is firing on all cylinders and continue to enjoy an acceleration in their respective fundamentals because of the increase in digitization around the world. Nearly every company today is searching for ways to become more digital, and both Microsoft and Accenture are positioned to provide many of the solutions these companies seek. This inflection in fundamentals was not lost on the market, and each business’s stock performed exceptionally well in 2021. In fact, they represented two of the three top absolute performers for the Global Growth Portfolio last year. As a result, their respective stocks are currently more fully priced. As such, we lowered Microsoft from our largest position within the Portfolio. We maintain high conviction in Microsoft and plan to own it for many years, but recognize the increase in its prices.”
2. Broadcom Inc. (NASDAQ:AVGO)
Breakline Capital’s Stake Value: $5,450,000
Percentage of Breakline Capital’s Portfolio: 8.36%
Number of Hedge Fund Holders: 71
Broadcom Inc. (NASDAQ:AVGO) is a multinational technology firm that develops, manufactures, and sells semiconductors and infrastructure software. Mizuho analyst Vijay Rakesh boosted his price objective on Broadcom Inc. (NASDAQ:AVGO) to $725 from $700 on May 27 and reiterated a Buy recommendation on the stock.
Breakline Capital bought 8,655 shares of Broadcom Inc. (NASDAQ:AVGO), worth $5.45 million as of the first quarter of 2022 at an estimated average price of $593.96 per share. Ken Fisher’s Fisher Asset Management is Broadcom Inc. (NASDAQ:AVGO)’s largest investor. It owns 1.42 million shares worth $894.78 million.
Hedge funds have recently become more interested in Broadcom Inc. (NASDAQ:AVGO). The company was in 71 hedge funds’ portfolios at the end of the first quarter of 2022. There were 62 hedge funds in our database with long Broadcom Inc. (NASDAQ:AVGO) positions at the end of the preceding quarter.
1. Dell Technologies Inc. (NYSE:DELL)
Breakline Capital’s Stake Value: $8,829,000
Percentage of Breakline Capital’s Portfolio: 13.55%
Number of Hedge Fund Holders: 59
Dell Technologies Inc. (NYSE:DELL) is a holding company that provides information technology hardware, software, and service solutions. On June 7, Dell Technologies Inc. (NYSE:DELL) announced a quarterly dividend of $0.33 per share. The stock’s dividend yield, as of June 11, came in at 2.58%.
On May 31, Barclays analyst Tim Long maintained an Equal Weight rating on Dell Technologies Inc. (NYSE:DELL), raising his price objective to $54 from $53. In a research note to investors, Long stated that Dell Technologies Inc. (NYSE:DELL) exceeded expectations in the first quarter due to greater ISG performance and higher margins.
59 hedge funds in our database held stakes in Dell Technologies Inc. (NYSE:DELL) at the end of the first quarter, compared to 62 funds in the previous quarter. At the end of Q1 2022, Breakline Capital held 175,908 shares in Dell Technologies Inc. (NYSE:DELL), valued at over $8.83 million. The company represented 13.55% of Kevin McCarthy’s portfolio. The hedge fund upped its position in Dell Technologies Inc. (NYSE:DELL) by 1% or 1,288 shares.
Third Point Management, in its Q3 2021 investor letter, mentioned Dell Technologies Inc. (NYSE:DELL) and discussed its stance on the firm. Here is what the fund said:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
You can also take a peek at 10 Stocks to Buy According to Matthew Hulsizer’s PEAK6 Capital Management and 10 Stocks to Buy According to John Rogers’ Ariel Investments.
