In this article, we discuss 5 stocks to buy now according to Leonard A. Potter’s Wildcat Capital Management. If you want to read our detailed analysis of Potter’s history and hedge fund performance, go directly to 10 Stocks to Buy Now According to Leonard A. Potter’s Wildcat Capital Management.
5. Coupang, Inc. (NYSE:CPNG)
Wildcat Capital Management Stake Value: $35,297,000
Percentage of Wildcat Capital Management’s 13F Portfolio: 5.74%
Number of Hedge Fund Holders: 29
Coupang, Inc. (NYSE:CPNG) is a company that provides an e-commerce platform. Coupang, Inc. (NYSE:CPNG) was raised to ‘Buy’ from ‘Neutral’ by UBS analyst Jennifer Han on March 9. During Q4, Leonard A. Potter’s Wildcat Capital loaded up on Coupang, Inc. (NYSE:CPNG), increasing its holding in the company by 27%. Wildcat Capital Management owns 1.20 million shares of Coupang, Inc. (NYSE:CPNG) as of December 31, worth $35.30 million.
Overall, 29 hedge funds in Insider Monkey’s database were bullish on Coupang, Inc. (NYSE:CPNG) at the end of Q4, down from 45 in the previous quarter. Those stakes are valued at over $8.63 billion as of December 31. Greenoaks Capital was the leading shareholder of Coupang, Inc. (NYSE:CPNG) among those 29 funds, holding over 115.85 million shares.
4. CoStar Group, Inc. (NASDAQ:CSGP)
Wildcat Capital Management Stake Value: $41,778,000
Percentage of Wildcat Capital Management’s 13F Portfolio: 6.8%
Number of Hedge Fund Holders: 49
CoStar Group, Inc. (NASDAQ:CSGP) is a commercial real estate information, analytics, and online markets provider based in the United States. Leonard A. Potter decreased his fund’s stake in CoStar Group, Inc. (NASDAQ:CSGP) by 10% during Q4, lowering the value of his holding to $41.78 million based on a position of 528,640 shares.
According to Insider Monkey’s database, 49 hedge funds had a stake in CoStar Group, Inc. (NASDAQ:CSGP) as of the end of Q4 2021, with the total value of their holdings being $2.56 billion. Akre Capital Management is the leading shareholder in CoStar Group, Inc. (NASDAQ:CSGP) among that group, with a stake worth over $771.68 million.
Citi analyst Peter Christiansen cut his price target on CoStar Group, Inc. (NASDAQ:CSGP) to $65 from $110 on February 24 but maintained a ‘Buy’ recommendation on the stock.
Baron Growth Fund, in its Q4 2021 investor letter, mentioned CoStar Group, Inc. (NASDAQ:CSGP). Here is what the fund said:
“We have seen our businesses exercise their pricing power more aggressively in recent months. CoStar Group, Inc. management indicated that the new rate card for its Apartment.com marketing network included 7% price increases on average, with prices for some products increasing by up to 20%. The company also resumed annual pricing increases in its core Suite information and analytics business after a multi-year hiatus.
Real estate data and marketing platform CoStar Group, Inc. detracted for the quarter. The company experienced a slowdown in its multi-family marketing platform as a result of record-high apartment occupancy. We believe this condition is temporary and that growth will improve through higher prices and better customer segmentation. The company is pushing into the residential market, which meaningfully expands its total addressable market. While this initiative requires short-term investment, it should ultimately yield high returns and bolster growth and margins.”
3. Goosehead Insurance, Inc (NASDAQ:GSHD)
Wildcat Capital Management Stake Value: $46,397,000
Percentage of Wildcat Capital Management’s 13F Portfolio: 7.55%
Number of Hedge Fund Holders: 17
Goosehead Insurance, Inc (NASDAQ:GSHD) provides insurance agency search services in the United States, and serves as a holding company for Goosehead Financial, LLC. As of the end of the fourth quarter, 17 hedge funds in Insider Monkey’s database held stakes in Goosehead Insurance, Inc (NASDAQ:GSHD), an increase compared to 13 funds in the preceding quarter.
Following the company’s Q4 results, Piper Sandler analyst Paul Newsome decreased his price objective on Goosehead Insurance, Inc (NASDAQ:GSHD) to $120 from $140 and reiterated an ‘Overweight’ rating on the stock. Newsome warned investors in a research report that Goosehead Insurance, Inc (NASDAQ:GSHD)’s earnings were lower than anticipated due to higher-than-expected expenditures as it pushes growth initiatives.
Wildcat Capital Management sold 1,950 shares of Goosehead Insurance, Inc (NASDAQ:GSHD) in the fourth quarter, ending the period with 356,683 shares of Goosehead Insurance, Inc (NASDAQ:GSHD), worth about $46.40 million.
Polen Capital, an investment management firm, mentioned Goosehead Insurance, Inc (NASDAQ:GSHD) in its first quarter 2021 investor letter. Here is what the fund said:
“Goosehead Insurance is a revolutionary business model and technology platform for the insurance industry. It operates as a franchise business model, which generates prolific free cash flow that management reinvests in an effort to strengthen its competitive position, customer experience, employee training, and core technology. The company continues to experience among the fastest and most profitable growth in the Portfolio since our purchase in the third quarter 2020. Goosehead grew revenue by 50% in the fourth quarter of 2020. In short, we continue to be excited about the long-term prospects of this flywheel company.”
2. RLX Technology Inc. (NYSE:RLX)
Wildcat Capital Management Stake Value: $92,992,000
Percentage of Wildcat Capital Management’s 13F Portfolio: 15.14%
Number of Hedge Fund Holders: 17
RLX Technology Inc. (NYSE:RLX) is a holding company that manufactures and sells electronic cigarette products. On March 11, RLX Technology Inc. (NYSE:RLX) published its earnings for the fourth quarter, announcing revenue of $298.84 million, up 20.5% year-over-year.
The hedge fund run by Leonard A. Potter entered the fourth quarter of 2021 with 23.84 million shares of RLX Technology Inc. (NYSE:RLX) in its portfolio worth around $92.99 million. The company has been in Potter’s portfolio since the first quarter of 2021. Wildcat Capital Management is the most significant stakeholder of the company among the funds tracked by Insider Monkey.
Overall, hedge funds are loading up on RLX Technology Inc. (NYSE:RLX), as 17 out of the 924 funds in our database held stakes in RLX Technology Inc. (NYSE:RLX) on December 31, up from 11 funds a quarter earlier.
1. Skillz Inc. (NYSE:SKLZ)
Wildcat Capital Management Stake Value: $160,943,000
Percentage of Wildcat Capital Management’s 13F Portfolio: 26.2%
Number of Hedge Fund Holders: 18
Skillz Inc. (NYSE:SKLZ) is a mobile game company that brings people together to compete. Following Skillz’ Q4 results, Citi analyst Jason Bazinet decreased his price objective on Skillz Inc. (NYSE:SKLZ) to $5 from $9 but maintained a ‘Buy’ rating. The analyst was optimistic about the stock, citing the company’s core platform and the possibility of positive EBITDA.
18 out of the 924 hedge funds in our database that filed 13Fs for the December quarter held stakes in Skillz Inc. (NYSE:SKLZ) as of December 31, owning $370.60 million worth of shares. The same number of funds were long SKLZ in the preceding quarter, holding stakes in Skillz Inc. (NYSE:SKLZ) totaling $432.23 million.
Wildcat Capital Management holds over 21.63 million shares of Skillz Inc. (NYSE:SKLZ) amounting to more than $160.94 million in value as of December 31, and representing 26.2% of the fund’s portfolio value.
In its third quarter 2021 investor letter, Bireme Capital mentioned Skillz Inc. (NYSE:SKLZ). Here is what the fund said:
“Another short position we initiated was in Skillz (SKLZ), a mobile game publisher with $230m in 2020 revenue, and $98m of 2020 EBITDA losses. When we shorted it, SKLZ had a ~$6b valuation; it is now down to $4.5b, and we believe it has much more room to fall.
SKLZ is a great example of investors getting hyped up over a quickly-growing company employing misleading industry jargon. In this case, the jargon is “eSports.” eSports is, in fact, a large and growing industry, and the term describes the business of competitive video games. Typically, this involves hosting tournaments, either live or online, where spectators can watch professional gamers compete at high levels. Prize pools are often in the millions. Ticket sales, sponsorships, and advertising revenue from such events totaled over $1b in 2020…” (Click here to see the full text)
Don’t miss out on additional compelling stock picks by checking out 10 Stocks to Buy According to Peter Simmie’s Bristol Gate Capital and 10 Stocks to Buy Now According to Jeffrey Gates’ Gates Capital
