4. Cloudflare, Inc. (NYSE: NET)
Frohlich’s Stake Value: $8,280,000
Percentage of Phil Frohlich’s 13F Portfolio: 2.34%
Number of Hedge Fund Holders: 43
Cloudflare, Inc. (NYSE: NET) is a cloud platform that provides a variety of network services to companies worldwide. It was incorporated in 2009 and stands fourth on the list of 10 stocks to buy today according to Phil Frohlich’s Prescott Group Capital Management.
On August 11, Cloudflare, Inc. (NYSE: NET) announced that it issued 0% senior unsecured notes due August 15, 2026, whose principal amount is $1.125 billion. In addition, initial bidders were allowed to buy up to an additional $168.75 million worth of notes. Cloudflare, Inc. (NYSE: NET) intends to use around $75 million of the net proceeds to cover the cost of capped call transactions, with the remainder going to general corporate purposes. On August 6, RBC Capital analyst Matthew Hedberg raised the price target on Cloudflare, Inc. (NYSE: NET) to $130 from $100 and kept an “Outperform” rating on the shares.
The hedge fund managed by Phil Frohlich owns 78,228 shares in Cloudflare, Inc. (NYSE: NET), worth over $8.28 million, representing 2.34% of their portfolio. Prescott Group Capital Management has decreased its stake in the firm by 41% in the second quarter of 2021. Cloudflare, Inc. (NYSE: NET) saw a decrease in hedge fund sentiment recently. The number of long hedge fund positions reduced to 43 in the second quarter of 2021, compared to 45 positions in the previous quarter.
Alger, in its second-quarter 2021 investor letter mentioned Cloudflare, Inc. (NYSE: NET). Here is what the fund said:
“Cloudflare provides a broad range of network services to businesses of all sizes across the world. Cloudflare’s intelligent global network spans more than 200 cities in over 100 countries. It offers network security, performance and reliability to a growing portion of global web traffic with over 17% of global internet requests going through Cloudflare. The company’s serverless network design allows this global network to be a key component layer as new developments for edge computing, 5G and the Internet of Things increase the importance of secure, reliable edge networks.
Cloudflare stock outperformed in the second quarter following a strong earnings report for the first three months of this year during which the company reaccelerated revenue growth. This revenue reacceleration was driven by momentum in Cloudflare’s large customer segment. Cloudflare added a record number of large customers who now account for more than half of Cloudflare’s total revenue. We think that Cloudflare is currently still in the early stages of market penetration, which means it has potential to maintain high levels of growth within its large customer segment as the company continues to innovate within its product offerings to better serve these large, complex customers. Cloudflare’s leadership in product innovation was further validated by the company’s second quarter announcement of a new partnership with NVIDIA Corporation to develop Al-based applications on Cloudflare’s edge network.”
