10 Stocks to Invest in According to Thomas Bancroft’s Makaira Partners

Published November 29, 2021 at 11:27 am EST Updated August 19, 2026 at 5:43 am EDT

In this piece, we will take a look at 10 stocks to invest in according to Thomas Bancroft’s Makaira Partners.

Makaira Partners LLC is an investment firm located in La Jolla, California. It was founded by Mr. Thomas Bancroft in 2007. The firm is named after the Makaira Indica, also known as the Black Marlin, which is one of the largest fish in the world and often weighs over 1,000 pounds.

Mr. Bancroft has decades of experience in the financial sector. He started his journey at GEICO in 1994. The executive is a graduate of the University of Colorado in Boulder, from where he completed his bachelor’s in political science in 1988. He spent 12 years at GEICO, which is a division of the famed investment firm Berkshire Hathaway. He has also had the honor of working with the Oracle of Omaha, the legendary Warren Buffett.

Makaira Partners mirrors Mr. Buffet’s investment approach, which generally espouses to always go long. In layman’s terms, it means patiently identifying companies that the investor believes have the greatest long term potential and then holding on to the investment for years. The firm often holds its investments for at least five years and believes that the underlying business and competitive advantage of a company are closely tied to its share price performance.

Makaira Partners’ portfolio was worth $473 million as of the third quarter of this year. The firm’s largest investments are in Liberty Broadband Corporation (NASDAQ:LBRDA) and Bath & Body Works, Inc. (NYSE:BBWI). Alongside, it also holds a stake in the well known fashion brand Victoria’s Secret & Co..

Thomas Bancroft of Makaira Partners

Our Methodology

To determine Mr. Bancroft’s top ten stocks, we looked through Makaira Partners’ 13-F filings for the third quarter of this year.

10. HEICO Corporation (NYSE:HEI)

Makaira Partners’ Holdings: $4 million

Makaira Partners’ Portfolio: 0.85%

Number of Hedge Fund Holders: 35

HEICO Corporation (NYSE:HEI) is an aerospace and defense component provider. Its products cover jet engine components and electronic systems such as suppression filters. It is headquartered in Hollywood, Florida, United States.

Mr. Bancroft’s Makaira partners held 34,191 HEICO Corporation shares as the third quarter of 2021 came to an end. These were worth $4 million and represented 0.85% of its investment portfolio. During the same time period, 35 of the 867 hedge funds polled by Insider Monkey had holdings in the aerospace firm.

HEICO Corporation earned $471 million in revenue and $0.56 in GAAP EPS during its third fiscal quarter, beating analyst estimates for EPS only. RBC Capital set a $145 price target for the aerospace firm in an October 2021 analyst note, highlighting that mergers and good margins are positives for the company.

Bo Shan’s Gobi Capital is HEICO Corporation’s largest investor as it owns 928,879 shares worth $110 million.

HEICO Corporation joins Victoria’s Secret & Co., Liberty Broadband Corporation and Bath & Body Works, Inc. in Mr. Bancroft’s list of hot stocks.

9. Cactus, Inc. (NYSE:WHD)

Makaira Partners’ Holdings: $5 million

Makaira Partners’ Portfolio: 1.07%

Number of Hedge Fund Holders: 10

Cactus, Inc. (NYSE:WHD) is a drilling equipment provider based in the United States. Its products cover both oil and gas exploration wells and it also providers services such as installation, maintenance, and repair.

For its third fiscal quarter, Cactus, Inc. brought in $115 million in revenue and $0.21 for GAAP EPS, beating analyst estimates for EPS only. Citi raised its price target on the stock to $50 in a November 2021 note.

As Q3 2021 ended, Makaira Partners held 135,000 Cactus, Inc. shares worth $5 million and making up 1% of its portfolio. 10 of the 867 hedge funds surveyed by Insider Monkey for Q3 2021 had invested in the firm.

Cactus, Inc.’s biggest investor is Todd J. Kantor’s Encompass Capital Advisors who owns one million shares worth $38 million.

8. The Progressive Corporation (NYSE:PGR)

Makaira Partners’ Holdings: $6.8 million

Makaira Partners’ Portfolio: 1.44%

Number of Hedge Fund Holders: 47

The Progressive Corporation (NYSE:PGR) is an insurance provider that covers several different markets in the United States. These markets include residential, automotive, and personal liability among others.

Mr. Bancroft’s investment firm held 75,600 The Progressive Corporation shares by the end of Q3 2021. These were worth $6.8 million and represented 1.44% of its portfolio. Similarly, as Q3 2021 ended, 47 of the 867 hedge funds held stakes in the company according to Insider Monkey’s research.

The Progressive Corporation brought in $12 billion through net premiums and $0.19 in EPS for its Q3, beating analyst estimates for net premium. Goldman Sachs set a price target of $104 for the company in a November 2021 note, highlighting that investors might look at a brighter future for the company.

William B. Gray’s Orbis Investment Management is The Progressive Corporation’s largest investor by owning 4.5 million shares worth $408 million.

The Progressive Corporation was mentioned by Madison Funds in its Q3 2021 investor letter. The firm outlined that:

“Regarding business activity, we have had companies report disruptions to current economic results from the aforementioned logistical challenges. Progressive Corporation continues to see higher accident frequencies and severities as people are driving more this year than last, and more recklessly. We expect Progressive to utilize its superior data capabilities to reprice its policies for improved profitability going forward.”

7. Victoria’s Secret & Co. (NYSE:VSCO)

Makaira Partners’ Holdings: $18.7 million

Makaira Partners’ Portfolio: 3.96%

Number of Hedge Fund Holders: 37

Victoria’s Secret & Co. is an American retailer of female specialty garments and beauty products. Some of the products that it offers include nightwear, undergarments, and perfumes.

Victoria’s Secret & Co. earned $1.4 billion in revenue and a GAAP EPS of $0.81 during its Q3, beating analyst estimates for revenue only. Its price target was lowered to $69 by Morgan Stanley in a November 2021 analyst note which shared supply chain concerns as hampering visibility into the company’s future.

By Q3 2021 end, Mr. Bancroft’s investment firm’s stake in Victoria’s Secret & Co. was worth $18.7 million. This was through owning 339,738 shares and it made up for 3.96% of Makaira Partners’ portfolio. 37 of the 867 hedge funds had invested in the company during the same time period according to Insider Monkey’s survey.

6. Qurate Retail, Inc. (NASDAQ:QRTEA)

Makaira Partners’ Holdings: $30 million

Makaira Partners’ Portfolio: 6.4%

Number of Hedge Fund Holders: 34

Qurate Retail, Inc. (NASDAQ:QRTEA) is a digital commerce provider in the United States. It operates an electronic commerce platform and also sells its products through televised events.

Makaira Capital held 2.9 million Qurate Retail, Inc. shares during Q3 2021, which were worth $30 million and represented 6.4% of its portfolio. Out of the 867 hedge funds polled by Insider Monkey for Q3 2021, 34 had held a stake in Qurate Retail, Inc..

During its third fiscal quarter, Qurate Retail, Inc. earned $3.14 billion in revenue and $0.30 in GAAP EPS, missing analyst estimates on both counts. Bank of America set a $26 price target for the company in April this year.

Qurate Retail, Inc.’s largest investor is Bob Peck and Andy Raab’s FPR Partners which owns 14.8 million shares worth $151 million.

Weitz Investment Management mentioned Qurate Retail, Inc. in its Q3 2021 investor letter, stating that:

“Another quarterly detractor, Qurate Retail, was a “stay-at-home” winner through much of the pandemic thanks to its video and eCommerce shopping model. As economies reopen, competition from brick-and-mortar stores will increase, but we continue to like Qurate’s unique retail model and unassuming valuation.”

Qurate Retail, Inc. is a part of Mr. Bancroft’s favorite stocks, alongside Liberty Broadband Corporation, Victoria’s Secret & Co., and Bath & Body Works, Inc..

5. CDW Corporation (NASDAQ:CDW)

Makaira Partners’ Holdings: $52 million

Makaira Partners’ Portfolio: 11.11%

Number of Hedge Fund Holders: 37

CDW Corporation (NASDAQ:CDW) provides hardware and software products to businesses, governments, and other non-consumer entities in North America and the U.K. It is headquartered in Lincolnshire, Illinois.

Mr. Bancroft’s investment firm held 288,982 CDW Corporation shares as of Q3 2021, which were worth $52 million and represented 11% of its portfolio. During the same time period, 37 of the 867 hedge funds polled by Insider Monkey had held stakes in the firm.

CDW Corporation brought in $5.3 billion in revenue and $2.13 in non-GAAP EPS for its third quarter, pleasing Wall Street by beating estimates on both counts. Morgan Stanley reduced the company’s price target to $196 in an October 2021 analyst note, highlighting that the IT hardware segment is facing several headwinds such as supply chain constraints.

CDW Corporation’s largest investor is Robert Joseph Caruso’s Select Equity Group which owns 6.8 million shares worth $1.2 billion.

CDW Corporation was mentioned by Wedgewood Partners in its Q2 2021 investor letter. The firm believes that:

“We have owned CDW stock for nearly two years now, and we have been quite pleased to see our thesis playing out as expected – even with the completely unexpected trauma of the pandemic fireworks during our holding period. These are the key components of our investment thesis, in simplistic form: First, the IT distribution and consulting industry is an attractive place to invest, with secular growth above that of the broad economy. Second, we expect the Company to continue to take share within the IT distribution and consulting industry, growing faster than the industry while continuing to improve margins and returns. The pandemic emerged shortly after our purchase, but even that did not alter the favorable dynamics underlying our thesis, as you can see below.

So, even in a negative year for total economic growth, IT spending in the U.S. came in better than the broad economy. The Company outperformed the industry and with improved profitability – which always be stills our hearts. Additionally, consulting the chart below, you can see that the gap between its growth and the industry’s growth continues to widen over time, and that spread continued to expand during the abnormal conditions in 2020 as well. All of this gives us even greater comfort in our initial thesis.

More important, it is clear to us that the pandemic has created even greater long-term opportunities for the company (and as it did for PayPal) and has accelerated several secular trends that already had been beneficial for the Company. Growth areas prior to the pandemic, such as network design and cloud-related services including security, storage, and software-as-a-service, will now accelerate meaningfully, driven by the necessary duplication of resources and the increasing complexity of technology resources deployed in use-cases such as employees working remotely, healthcare delivered virtually, or education delivered flexibly. We see several persistent secular drivers emerging:

• Upgrades to the highest tier of devices outside of the primary/traditional location – if you suddenly are conducting many of your client meetings via Zoom, for example, or if you’re a physician providing video appointments to your clients, you now need to have the same high-caliber device with you at all times that you perhaps used to have only in your primary location.

• This requires not only a duplication in areas such as network design and security, of course, but upgrades to the highest tiers of each. If a company’s technology resources, patients’ health data, or students’ personal information are always present in all locations with all users, the highest tiers of devices, network, software, security, and storage must also be always present in all locations. Previously, this highest tier of all components was limited to the primary office or clinic or school building.

• We note that security has been a key growth area for both revenue and profit over the last several years, with revenue growth and margins better than the corporate average. This proliferation of devices and locations, with all the network complexity that goes with it, is particularly beneficial for the Company.

• Additionally, while a customer’s primary physical location might have been able to handle all these technology resources using on premise servers prior to the pandemic, when most ofthe resources were not being used remotely, the Company’s customers now have little choice but to use the cloud for this sudden proliferation of devices and their related network, storage and security needs.

• With greater demand emerging across the industry for the foreseeable future, distributor scale and the resulting reliability of a distributor’s supply chain will be vitally important, so we believe the larger players will continue to win share from smaller distributors. In its most recent quarterly earnings call, management highlighted that lead times from its technology vendors were extending in many areas, although it has been able to procure all products needed by its customers. If a company of CDW’s scale is seeing some impact, there are many, many smaller vendors that are struggling to get their hands on product
at all, or that can only do so with lengthy delays.

It is worth remembering that CDW tends to focus on smaller and less sophisticated clients than many of its public company peers in the industry. Its corporate focus is on smaller companies with important client bases in education, government, and healthcare. The majority of these clients do not have large internal technology departments that can handle massive, sophisticated projects, such as trying to figure out – basically overnight when a pandemic struck – the best way to design their device, network, software, storage, and security needs so that their entire workforce can work remotely.

When the pandemic first hit, there really was no planning at all. The mad scramble was on 24/7/365 for basic needs: laptops for corporate employees working from home, or Chromebooks for virtual education. As time has passed, and as IT managers across all areas of the economy start to adjust to post-pandemic realities, CDW is starting to see its customers turn to longer-term planning, contemplating all of the duplication of resources and complexities we laid out above. In our client letter in the 3rd quarter of 2019, at the time we purchased CDW, we pointed out that “the Company has outgrown many of its peers over the last several years by focusing on hiring engineers and specialists focused on creating solutions for its customers, rather than focusing on salespeople. This has allowed CDW to tap into booming areas of tech such as helping smaller organizations plan their cloud and digital workplace transitions.” This multi-year investment is now paying even greater dividends in the COVID era, as customers of all kinds have had to adapt to the new realities at a frantic pace.

Finally, we believe a variety of smaller competitors, many of which may have expertise or customer relationships that could be useful to CDW, likely struggled during 2020 – particularly so if these competitors had narrow exposure to customer groups that were harder hit than others. Additionally, supply chain bottlenecks and product shortages across the industry will have hurt (and will continue to hurt for the intermediate-term future) smaller vendors much more than larger vendors. Therefore, we believe CDW may have more opportunity than usual to supplement its near-term growth with attractive acquisition
opportunities. We note further that the Company currently is underleveraged in comparison to its long-term balance sheet targets. Particularly with historically low levels of interest rates at the moment, we see the potential for the company to put the strength of its balance sheet to work, whether that happens through acquisitions, higher levels of share repurchases, or perhaps even some form of recapitalization.

For a long stretch in 2020, we scratched our heads as the market fixated upon only a small portion of its customer base (primarily government and education) that had seen tremendous growth during the pandemic, as these essential service providers scrambled to enable their employees to provide those services in a virtual environment. Corporate customers also participated in this scramble, to a lesser degree, while larger projects were put on hold. The market seemed to see this as nothing but a short-term windfall and dismissed it. Investors were quite slow to identify the longer-term benefits caused by the pandemic, some of which can be considered an acceleration or augmentation of trends that were going to happen anyway, but many of which – particularly when it comes to areas such as remote work, virtual healthcare services, and virtual educational opportunities – could be considered gifts that never were expected to be meaningful contributors to CDW’s business model. Even after a belated and justified rally in the stock finally arrived toward the end of last year, we would note that CDW’s valuation metrics are only touching previous prepandemic highs. More still, valuation is quite reasonable in comparison to the broader market. With the market’s growth and return metrics inferior to CDW, the stock has blown right through pre pandemic highs and is nearly holding on to those even higher peak levels. Furthermore, we see consensus estimates for CDW in 2022 (especially) and in 2023 as too low, making the stock look even more attractive. We took several opportunities to add to our position last year at attractive prices and remain bullish on the Company’s prospects.”

4. Zebra Technologies Corporation (NASDAQ:ZBRA)

Makaira Partners’ Holdings: $55 million

Makaira Partners’ Portfolio: 11.75%

Number of Hedge Fund Holders: 39

Zebra Technologies Corporation (NASDAQ:ZBRA) sells products for wristbands, RFID printers, RFID readers, barcode scanners, battery chargers, and vehicle mounts amongst others. It is based in Lincolnshire, Illinois.

As Q3 2021 ended, Makaira Partners held 107,879 Zebra Technologies Corporation shares. These were worth $55 million and constituted 11.75% of the firm’s portfolio. 39 of the 867 hedge funds had invested in the company according to Insider Monkey’s research for the same quarter.

Andy Brown’s Cedar Rock Capital is Zebra Technologies Corporation’s largest investor by owning one million shares worth $560 million.

For its third fiscal quarter, Zebra Technologies Corporation brought in $1.4 billion in revenue and $3.69 in GAAP EPS, beating analyst estimates on both counts. Needham raised the company’s price target to $660 in a November 2021 analyst note, noting that the company is growing well.

3. CarMax, Inc. (NYSE:KMX)

Makaira Partners’ Holdings: $55.9 million

Makaira Partners’ Portfolio: 11.82%

Number of Hedge Fund Holders: 36

CarMax, Inc. (NYSE:KMX) is a retailer and financier of used vehicles in the United States. It covers a large variety of vehicles and also conducts auctions alongside providing reconditioning and repair services.

CarMax, Inc. earned $7.9 billion in revenue and $1.72 GAAP EPS for its second fiscal quarter, beating analyst estimates for revenue only. Wedbush raised its price target to $160 in November 2021, stating that its upside risk outweighs downside risk.

Mr. Bancroft’s Makaira Partners owned 437,377 CarMax, Inc. shares as the third quarter of this year ended, which were worth $55.9 million. They represented 11.82% of Makaira Partners’ portfolio. By Q3 2021 end, 36 of the 867 hedge funds polled by Insider Monkey had holdings in the company.

CarMax, Inc. biggest investor is Charles Akre’s Akre Capital Management who owns 7.1 million shares worth $909 million.

Giverny Capital mentioned CarMax, Inc. in its Q2 2021 investor letter, stating that:

“We’re quite optimistic about Carmax, our second largest position. For several years, investors have gravitated to a thesis that a handful of start-ups that sell used cars in an online-only format will end up with a lower cost structure than Carmax. This even though Carmax appears today to have lower costs to buy used cars for its inventory, recondition them for resale and transport them to stores – all problems that are not solved by a good web site. Carmax also amortizes its national advertising over a much larger sales base than competitors, giving it lower marketing expense per vehicle.

Nevertheless, Carmax was slow to respond to the emerging market for online car shopping. The good news is that it ultimately responded with vigor. Over the past few years it has seen operating margins contract as it invested in an omnichannel capability that lets customers buy fully online or do a portion of the transaction online and a portion in the store. Importantly, the customer chooses exactly which parts of the transaction to complete online or in store.

Now, it may be harvesting rewards. Carmax’s most recent earnings report was eye-popping. With its omnichannel transformation complete, Carmax reported that comparable sales rose 99% (on a pandemic-depressed comparison) in its May quarter, far ahead of expectations. The two-year comparable sales increase was 16%. Profit margins expanded and Carmax even suspended a test of lower prices in select markets, which was meant to measure elasticity of demand, because it was having no trouble selling cars at higher prices.

Carmax reported that 75% of transactions in the May quarter involved a customer completing a portion of the deal online, but only 8% were completed entirely online. Customers clearly like doing some parts of a transaction online and some parts in person. Importantly, Carmax now is the country’s largest online buyer of used autos from consumers, meaning it is acquiring inventory efficiently in the channel that the start-ups ostensibly were going to dominate.

Since releasing its earnings report in late June, Carmax shares are up sharply. Yet the stock’s high-teens PE multiple remains below the S&P average for a business with outstanding growth prospects and a likely return on equity above 25% this year. The used car market, like every other market, is overheated and will cool off at some point. But we feel good about our second-largest holding.”

2. Bath & Body Works, Inc. (NYSE:BBWI)

Makaira Partners’ Holdings: $85 million

Makaira Partners’ Portfolio: 17.96%

Number of Hedge Fund Holders: 56

Bath & Body Works, Inc. is an American retailer of body care, home fragrance, and sanitizers. It operates its own stores and franchises all over the globe.

Makaira Partners held an $85 million stake in Bath & Body Works, Inc. through owning 1.3 million shares by Q3 2021 end. This made up 17.96% of the firm’s portfolio. During the same time period, 56 of the 867 hedge funds polled by Insider Monkey had invested in the company.

For its Q3, Bath & Body Works, Inc. beat analyst estimates for revenue and GAAP EPS by posting $1.68 billion and $0.66 in the metrics, respectively. Morgan Stanley raised its price target to $90 in a November 2021 analyst note, sharing that the company had met or exceeded targets for six consecutive quarters after the Q3 earnings report.

1. Liberty Broadband Corporation (NASDAQ:LBRDA)

Makaira Partners’ Holdings: $158 million

Makaira Partners’ Portfolio: 33.56%

Number of Hedge Fund Holders: 24

Liberty Broadband Corporation provides internet and video streaming services in the United States. It also provides location tracking services to businesses alongside fiber connectivity to offices and cellphone towers.

Mr. Bancroft’s Makaira Partners owned 919,556 Liberty Broadband Corporation shares by the end of this year’s third quarter. These were worth $158 million and represented 33.56% of its portfolio. Out of the 867 hedge funds profiled by Insider Monkey by Q3 2021 end, 24 held stakes in the company.

Liberty Broadband Corporation brought in $250 million in revenue and $1.29 in GAAP EPS for its third quarter, beating analyst estimates for revenue only. Deutsche Bank raised its price target to $196 in October 2021 and kept a Buy rating for the shares.

Boykin Curry’s Eagle Capital Management is Liberty Broadband Corporation’s largest shareholder. It owns 8.8 million shares worth $1.5 billion.

Alphyn Capital Management, in its first quarter 2021 investor letter, mentioned Liberty Broadband Corporation and outlined that:

“Liberty Broadband completed its merger with GCI, thereby collapsing one layer of the double discount to Charter Communications, presenting a good opportunity to trim that position as well.”

You can also take a peek at Brian Higgins’ King Street Capital Portfolio: Top 10 Stock Picks and Top 10 Stock Picks of Tom Purcell’s Alua Capital Management.

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