In this article, we discuss the top 5 stock picks of David Thomas’s Atalan Capital. To read our detailed analysis of Thomas’s history, investment philosophy, and hedge fund performance, go directly to 10 Stocks to Invest In Now According to David Thomas’s Atalan Capital.
5. Uber Technologies, Inc. (NYSE:UBER)
Atalan Capital’s Stake Value: $120.06 million
Percentage of Atalan Capital’s 13F Portfolio: 7.48%
Number of Hedge Fund Holders: 143
Uber Technologies, Inc. (NYSE:UBER) is next on the list of top stocks to buy according to David Thomas’s Atalan Capital. As of the end of September, Thomas owns 2.68 million shares in the company, valued at $120.06 million. This is an increase of 28% over the last quarter, where Thomas’s Atalan Capital reported ownership of 2.1 million shares in Uber Technologies, Inc. (NYSE:UBER).
On January 31, Cowen analyst John Blackledge lowered the firm’s price target on Uber Technologies, Inc. (NYSE:UBER) to $76 from $82, whilst maintaining an ‘Outperform’ rating on the company shares. The analyst expects gross bookings for Q4 to be just above estimates on the back of a recovery in the mobility sector, but lowered future estimates due to the spread of Omicron.
Out of 867 elite hedge funds tracked by Insider Monkey, 143 held stakes in Uber Technologies, Inc. (NYSE:UBER) at the close of the third quarter, showing a bullish trend from last quarter where 135 hedge funds held stakes in the company.
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
4. TransDigm Group Incorporated (NYSE:TDG)
Atalan Capital’s Stake Value: $164.26 million
Percentage of Atalan Capital’s 13F Portfolio: 10.24%
Number of Hedge Fund Holders: 63
TransDigm Group Incorporated (NYSE:TDG) deals in the production and supply of aircraft components and operates through its segments: Power and Control, Airframe, and Non-Aviation. 63 hedge funds were long TransDigm Group Incorporated (NYSE:TDG) at the close of the third quarter, showing an upward trend from the previous quarter where 57 hedge funds held stakes in the company. As of September, David Thomas’s Atalan Capital owns 263,000 shares in TransDigm Group Incorporated (NYSE:TDG) with a value of $164.26 million.
On January 7, Truist analyst Michael Ciarmoli upgraded TransDigm Group Incorporated (NYSE:TDG) to ‘Buy’ from ‘Hold’, upping the price target from $600 to $786. The analyst noted that the company is well-positioned to benefit from increased demand in commercial aerospace aftermarket parts and that TransDigm Group Incorporated (NYSE:TDG) can continue to expand its margins as both prices and volumes report an increase.
Investment management firm Vulcan Value Partners discussed TransDigm Group Incorporated (NYSE:TDG) in its Q2 2021 investor letter. The fund said:
“TransDigm Group Inc., another material contributor during the quarter, is an aerospace manufacturer providing highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales. Its business was impacted by the global pandemic; however, the company has been able to maintain margins despite strong revenue headwinds, and it continues to generate strong free cash flow.”
3. Palo Alto Networks, Inc. (NASDAQ:PANW)
Atalan Capital’s Stake Value: $166.45 million
Percentage of Atalan Capital’s 13F Portfolio: 10.37%
Number of Hedge Fund Holders: 73
Palo Alto Networks, Inc. (NASDAQ:PANW) is a California-based company that provides cybersecurity solutions. On January 24, Citi analyst Fatima Boolani initiated coverage of Palo Alto Networks, Inc. (NASDAQ:PANW) with a ‘Buy’ rating and $585 price target, noting positive expectations over the company’s growth potential and current valuations.
In January, the US government’s Department of Veterans Affairs selected Palo Alto Networks, Inc. (NASDAQ:PANW) to secure its expanded remote workforce in a multi-year agreement. company raked in $1.25 billion in revenue for the third quarter, exceeding analysts’ forecasts by $43.13 million.
Atalan Capital owns roughly 348,000 shares in Palo Alto Networks, Inc. (NASDAQ:PANW), worth $166.45 million as of the end of September. This is an increase of 3% in holding over the last quarter, where Atalan Capital held 340,000 shares in the firm.
Investors were seen loading up on Palo Alto Networks, Inc. (NASDAQ:PANW) stock, with 73 hedge funds holding stakes in the firm at the close of the third quarter, in comparison to 69 hedge funds in the preceding quarter.
2. Adobe Inc. (NASDAQ:ADBE)
Atalan Capital’s Stake Value: $169.83 million
Percentage of Atalan Capital’s 13F Portfolio: 10.58%
Number of Hedge Fund Holders: 95
David Thomas’s Atalan Capital owns 295,000 shares in Adobe Inc. (NASDAQ:ADBE), valued at $169.83 million at the end of the third quarter. This represents 10.58% of the fund’s total holdings. Hedge fund sentiment is positive on Adobe Inc. (NASDAQ:ADBE), with 95 hedge funds reporting stakes in the company at the close of the third quarter, in contrast to 89 hedge funds a quarter ago.
Adobe Inc. (NASDAQ:ADBE) is a software company that offers media and marketing products, including Adobe Photoshop, and operates through its segments: Digital Media, Digital Experience, and Publishing and Advertising.
On January 21, Deutsche Bank analyst Brad Zelnick maintained a ‘Buy’ rating on Adobe Inc. (NASDAQ:ADBE) shares, and lowered the price target to $660 from $715, noting that he remained bullish on the software industry heading into 2022.
Richie Capital Group, an investment firm, talked about Adobe Inc. (NASDAQ:ADBE) in its investor letter for the second quarter of 2021. Here’s what it said:
“Adobe Systems (ADBE – up 24.8%) – In the last 15 years, Adobe has transformed itself into a software behemoth, more than tripling its revenue since 2010. The company is famous for its namesake PDF-reader and photo-editing software Photoshop. However, ADBE sells a full suite of software products through a recurring subscription model. The company transitioned from selling boxed software to recurring subscriptions in 2013 and revenues have grown consistently since. The company achieved $13B in revenue in 2020 with 88% Gross Margins.”
1. Moody’s Corporation (NYSE:MCO)
Atalan Capital’s Stake Value: $179.33 million
Percentage of Atalan Capital’s 13F Portfolio: 11.18%
Number of Hedge Fund Holders: 58
With 505,000 shares valued at roughly $179 million and signifying an 11.18% portion of total holdings, Moody’s Corporation (NYSE:MCO) is the highest holding of David Thomas’s Atalan Capital. 58 out of 867 hedge funds tracked by Insider Monkey were also eager on Moody’s Corporation (NYSE:MCO) shares at the close of the third quarter, up from 44 in the previous quarter.
Moody’s Corporation (NYSE:MCO) is a risk assessment firm that provides credit ratings, tools, research, and analysis to financial markets around the globe. It operates through the segments: Moody’s Investors Service and Moody’s Analytics.
On January 14, BMO Capital analyst Jeffrey Silber raised the firm’s price target on Moody’s Corporation (NYSE:MCO) to $430 from $428 and reiterated an ‘Outperform’ rating on the shares.
Investment firm Qualivian Investment Partners mentioned many stocks in its Q2 2021 investor letter, and Moody’s Corporation (NYSE:MCO) was among them. Here’s what the fund said:
“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”
You can also take a look at 15 Largest Electronics Companies in the World and 10 Best Finance Stocks To Buy Now.
