In this article, we discuss the top 5 stocks to buy based on Michael Pausic’s Foxhaven Asset Management portfolio. If you want our detailed analysis of these stocks, go directly to the 10 Stocks to Buy Based on Michael Pausic’s Foxhaven Asset Management Portfolio.
5. Twilio Inc. (NYSE:TWLO)
Foxhaven Asset Management’s Stake Value: $272.4 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 7.85%
Number of Hedge Fund Holders: 96
Twilio Inc. (NYSE:TWLO) is a communications company that provides cloud communication services to its customers. Some of the major clients of the company are eBay Inc. (NASDAQ:EBAY), Uber Technologies, Inc. (NYSE:UBER), and Airbnb, Inc. (NASDAQ:ABNB).
As per Insider Monkey’s database, 96 hedge funds held stakes in Twilio Inc. (NYSE:TWLO) worth $6.37 billion in the third quarter of 2021, with the most significant stake by Cathie Wood’s ARK Investment Management. Wood’s firm owns 3.2 million shares of the company worth more than $1 billion.
The investment management firm Lakehouse Capital mentioned Twilio Inc. (NYSE:TWLO) in their second-quarter 2021 investor letter. Here are the contents of the letter:
“The Fund held 20 positions as of the end of June and exited four during the year (including) Twilio. The companies we exited were sold almost entirely on the basis of their valuations getting stretched well past their norms and to levels where the return profile no longer offered the asymmetric upside that led us to invest in the first place. We dislike selling on valuation as great growth companies are hard to find and letting winners run is an important facet of a winning growth strategy, however, we’re not gluttons for punishment either and in each of those cases we redeployed capital towards other high-quality growth companies with less demanding valuations.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Foxhaven Asset Management’s Stake Value: $278.4 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 8.02%
Number of Hedge Fund Holders: 242
Amazon.com, Inc. (NASDAQ:AMZN) accounts for 8.02% of Foxhaven’s 13F portfolio. The fund owns 84,752 shares of the company worth $278.4 million.
On November 22, Guggenheim analyst Seth Sigman gave Amazon.com, Inc. (NASDAQ:AMZN) a Buy rating with a price target of $4300.
The investment management firm Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in their third-quarter 2021 investor letter. Here is what the firm said:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
3. MercadoLibre, Inc. (NASDAQ:MELI)
Foxhaven Asset Management’s Stake Value: $279.5 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 8.05%
Number of Hedge Fund Holders: 68
MercadoLibre, Inc. (NASDAQ:MELI) is an Argentinian company that operates online marketplaces and primarily focuses on e-commerce and online auctions. The company is Latin America’s most popular e-commerce site and operates across 16 countries of the region. The company also plans to allow cryptocurrency investments to its customers using digital wallets quite soon.
Barclays analyst Trevor Young has raised the price target of MercadoLibre, Inc. (NASDAQ:MELI) to $2200 up from $2100 and kept an Overweight rating after its third-quarter results. The analyst mentioned that the company is “executing on all fronts.”
Polen Capital mentioned MercadoLibre, Inc. (NASDAQ:MELI) in their second-quarter 2021 investor letter. Here is what the firm said:
“Argentina-based MercadoLibre operates Latin America’s leading e-commerce website and digital wallet. Both e-commerce and consumer finance are underpenetrated among the nearly 400 million citizens living in the company’s three largest markets: Brazil, Argentina, and Mexico.
MercadoLibre’s digitally native solution gives more than 70 million users an easy access point for both online shopping and a digital wallet.
From humble beginnings as a third-party marketplace, MercadoLibre’s management built the business over the last twenty years by steadily expanding the platform’s reach with new services to suit both merchants and consumers. Today’s offerings include financing capabilities for buyers and sellers, logistics, loyalty programs, classifieds listings, and grocery items. We think MercadoLibre can compound earnings at a 25% rate for the next five years.”
2. Atlassian Corporation Plc (NASDAQ:TEAM)
Foxhaven Asset Management’s Stake Value: $349.08 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 10.05%
Number of Hedge Fund Holders: 60
Atlassian Corporation Plc (NASDAQ:TEAM) is an Australian software company. The company was founded in 2002, and in the third quarter of 2021, it was one of the top picks of Foxhaven Asset Management. The fund owns 891,828 shares of Atlassian Corporation Plc (NASDAQ:TEAM) worth $349.08 million, accounting for 10.05% of the fund’s third-quarter portfolio.
Atlassian Corporation Plc (NASDAQ:TEAM) recently posted its first-quarter 2022 results, in which the company posted an EPS of $0.46 compared to the $0.40 estimates.
Atlassian Corporation Plc (NASDAQ:TEAM) was mentioned by the investment management firm Tao Value in their third-quarter 2021 investor letter. Here is what they said:
“Atlassian (TEAM) delivered a “ripper”(quoting management from earnings call) quarter, adding a record 23K new customers last quarter, which is more than the total new customers of full year 2020. The cloud revenue also shows growth acceleration. This is surprisingly impressive, give that TEAM is believed to pull future demand forward to last quarter (i.e. the market expects de-acceleration after such effect) by ending their on-premise offerings in February 2021. As a result, the stock price jumped up 20+% on the earnings day. TEAM has increased 20-fold from our initial purchase and is now growing into our 3rd largest position.”
1. Meta Platforms, Inc. (NASDAQ:FB)
Foxhaven Asset Management’s Stake Value: $436.38 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 12.57%
Number of Hedge Fund Holders: 248
The parent company of Instagram, Facebook, WhatsApp, and other major social media platforms and the tech giant Meta Platforms, Inc. (NASDAQ:FB) takes the top spot in our top ten picks according to Michael Pausic’s Foxhaven Asset Management.
According to Foxhaven Asset Management’s third-quarter filings, the fund owns close to 1.29 million shares of Meta Platforms, Inc. (NASDAQ:FB) worth $436.38 million, which constitutes about 12.57% of the fund’s portfolio.
On October 26, Monness Crespi analyst Brian White cut the price target on Meta Platforms, Inc. (NASDAQ:FB) from $500 to $460 and kept a Buy rating. In a research note, the analyst said that the third quarter 2021 results of the company were “lackluster” and noted that the orchestration towards the fourth quarter lacked enthusiasm.
Jefferies Group posted their third-quarter 2021 investor letter and mentioned Meta Platforms, Inc. (NASDAQ:FB) in it. Here is what the letter said:
“While still early, FB is in the process of building the platforms that will ultimately support the development the Metaverse. We look at FB’s position through the lens of 4 current investment initiatives: 1) Oculus VR hardware, 2) Smart glasses, 3) Augmented Reality lenses, and 4) “Horizon Workrooms”
Oculus Virtual Reality hardware: Since acquiring Oculus in 2014 ($2B deal), FB has been focused on developing best-in-class hardware and complementary software & services to support VR experiences. The Oculus Quest 2 is FB’s newest VR headset; it retails at $299 and allows users to play games, try fitness classes, play sports, and watch concerts in virtual environments. Most importantly, Quest 2 is linked to users’ Facebook accounts, which means users can seamlessly connect with friends in virtual environments to play games or spend time together. We believe one of FB’s biggest differentiators in VR is its large array of non-gaming experiences that were designed for Oculus. For instance, users can explore extreme terrain in National Geographic Explore VR, join virtual fitness classes, or simulate being a chef. As FB’s hardware continues to improve and becomes less cumbersome, we would expect a flywheel of greater developer and user adoption of VR…” (Click here to see full text)
You can also take a look at George Soros Stock Portfolio: Top 10 Large-Cap Stock Picks and Top 10 Stocks to Invest in According to Alan Fournier’s Pennant Capital.
