In this article, we discuss 7 stocks to buy according to Eduardo Costa’s Calixto Global Investors. If you want to skip our detailed analysis of Costa’s history, investment philosophy, and hedge fund performance, go directly to 3 Stocks to Buy According to Eduardo Costa’s Calixto Global Investors.
Calixto Global Investors‘ founder and portfolio manager is Eduardo Costa. He attended Columbia Business School to get an M.B.A. after graduating from the University of Pennsylvania with a B.A. in Economics and International Relations. At Lazard Asset Management, Costa began his professional career as an analyst in the department of emerging market stocks. Later, he worked with Shumway Capital Partners for four years as an analyst, managing the travel, leisure, gaming, and TMT sectors for the SCP Omni Fund team. Costa then worked at Carlyle Blue Wave Partners as a managing director and analyst in the TMT division. Finally, he worked as the research director at JAT Capital Management for five years before founding Calixto Global Investors.
When Calixto Global Investors was established in 2014, no seed funding was available. “We could have done a seed deal but instead bootstrapped and built from the ground up, raising assets from friends and family and a few key investors,” clarified Costa. He invested $25 million to launch Calixto Global Investors and has subsequently increased its value to over $300 million.
Calixto Global Investors is a fundamental investment manager concentrating on the global Technology, Media, Telecom, and Consumer sectors. The focus of the hedge fund is on out-of-the-box investment stories that reduce the possibility of trading at the same time as its competitors, tend to have less sell-side publicity, and give investors a unique exposure. The fund returned 3.2% to investors in May 2021 and earned 3.9% through June 2021. With net profits of 47% for the year, the hedge fund also had a very remarkable 2020.
Calixto Global Investors has carved its niche in creating an uncorrelated strategy. The hedge fund manager plans to preserve liquidity by investing in small-caps but not micro-caps. According to Costa:
“I always want to stay liquid because my former employer, Chris Shumway, drilled it in that you never know when circumstances might invalidate a thesis, when you might just be wrong, or when a technical situation such as January 2021 might crop up”.
Source: pexels
Calixto Global Investors’ portfolio had a value of $149.74 million at the end of the first quarter of 2022. The most notable stocks held by the hedge fund in Q1 2022 include Amazon.com, Inc. (NASDAQ:AMZN), Five9, Inc. (NASDAQ:FIVN), and Kanzhun Limited (NASDAQ:BZ).
In Amazon.com, Inc. (NASDAQ:AMZN), Calixto Global Investors owned 1,800 shares. Unified ID 2.0 and Amazon.com, Inc. (NASDAQ:AMZN) Web Services announced their partnership on June 22. Trade Desk (TTD) created the open-sourced Unified ID 2.0 replacement, which has the support of more than 40 publications. AWS would be able to run UID2 privately, thanks to the agreement. This implied that marketers may immediately link publisher data with their first-party data, assuming they store it with AWS, to create UID2 tokens without needing further processes.
Another notable stock in Costa’s portfolio is Five9, Inc. (NASDAQ:FIVN). On May 23, Jefferies analyst Samad Samana maintained a Buy rating while lowering his price objective on Five9, Inc. (NASDAQ:FIVN) from $130 to $125. Due to unfavorable economic conditions and the possibility of a recession, Samana cut his price expectations for the software businesses he monitors and reduced price projections for several of them.
Calixto Global Investors also has a significant holding in Kanzhun Limited (NASDAQ:BZ). Goldman Sachs analyst Timothy Zhao initiated coverage of Kanzhun Limited (NASDAQ:BZ) on April 10, maintaining a Neutral rating and a $37.50 price target.
Our Methodology
Let’s start our list of 7 stocks to buy according to Eduardo Costa’s Calixto Global Investors. We used the Q1 portfolio of Costa for this analysis.
Stocks to Buy According to Eduardo Costa’s Calixto Global Investors
7. Amazon.com, Inc. (NASDAQ:AMZN)
Calixto Global Investors’ Stake Value: $5,868,000
Percentage of Calixto Global Investors’ Portfolio: 3.91%
Number of Hedge Fund Holders: 271
E-commerce behemoth Amazon.com, Inc. (NASDAQ:AMZN) provides online retail shopping and cloud computing services. Calixto Global Investors first acquired 166,000 shares of Amazon.com, Inc. (NASDAQ:AMZN) in Q4 2018, worth $12.47 million, and discarded its stake entirely in Q3 2021. However, the hedge fund again purchased 1,800 shares of the company in Q1 2022, valued at $5.87 million.
In response to several deteriorating macro data points and Amazon.com, Inc. (NASDAQ:AMZN)’s own U.S. online consumer survey, Evercore ISI analyst Mark Mahaney decreased his price objective on Amazon.com from $205 on June 24 to $180 while maintaining an Outperform rating on the shares.
In the first quarter of 2022, Amazon.com, Inc. (NASDAQ:AMZN)’s largest shareholder was Ken Fisher’s Fisher Asset Management, who owned 2.36 million shares worth $7.70 billion. The hedge fund boosted its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 10%. By the end of Q1, 271 hedge funds out of the 912 tracked by Insider Monkey held stakes in Amazon.com, Inc. (NASDAQ:AMZN), worth roughly $48.03 billion. This is compared to 279 hedge funds in the previous quarter, with a total stake value of approximately $49.16 billion.
In addition to Five9, Inc. (NASDAQ:FIVN) and Kanzhun Limited (NASDAQ:BZ), Amazon.com, Inc. (NASDAQ:AMZN) is one of the stocks to buy according to Eduardo Costa’s Calixto Global Investors.
In its Q1 2022 investor letter, Weitz Investment Management mentioned Amazon.com, Inc. (NASDAQ:AMZN). Here is what the fund said:
“Amazon.com’s (NASDAQ:AMZN) stock was down modestly in the quarter, but opportunistic purchases helped the position contribute positively to the Fund. Our index short positions against ETFs tracking market indexes provided helpful ballast during the first quarter drawdown but were otherwise detractors for the fiscal year. During the quarter, we covered roughly 20% of our S&P 500 short and 50% of our Nasdaq 100 short at progressively lower prices. Among our long equities, we added materially to high-conviction holdings Amazon.com.”
6. Kanzhun Limited (NASDAQ:BZ)
Calixto Global Investors’ Stake Value: $11,456,000
Percentage of Calixto Global Investors’ Portfolio: 7.65%
Number of Hedge Fund Holders: 20
Kanzhun Limited (NASDAQ:BZ) operates a job-focused web portal. Goldman Sachs analyst Timothy Zhao assumed coverage of Kanzhun Limited (NASDAQ:BZ) on April 10, reaffirming a Neutral rating and a $37.50 price objective on the stock.
On June 24, Kanzhun Limited (NASDAQ:BZ) reported earnings for the first quarter, posting a revenue of $179.5 million, up 49.6% from the prior-year quarter, beating estimates by $13.63 million. Chase Coleman and Feroz Dewan’s Tiger Global Management LLC was Kanzhun Limited (NASDAQ:BZ)’s largest investor in the first quarter. The hedge fund owned 7.28 million shares valued at $181.36 million.
According to the 13F Filings for Q1 2022, Eduardo Costa’s Calixto Global Investors held 459,900 shares of Kanzhun Limited (NASDAQ:BZ), amounting to over $11.46 million and accounting for 7.65% of the fund’s investment portfolio. At the end of the first quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $496.39 million in Kanzhun Limited (NASDAQ:BZ).
5. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Calixto Global Investors’ Stake Value: $14,025,000
Percentage of Calixto Global Investors’ Portfolio: 9.36%
Number of Hedge Fund Holders: 36
Royal Caribbean Cruises Ltd. (NYSE:RCL), which has its corporate headquarters in Miami, offers cruise vacations all over the globe through its wholly-owned brands – Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises. Royal Caribbean Cruises Ltd. (NYSE:RCL)’s largest investor is John W. Rogers’ Ariel Investments, who had an $85.67 million stake in the company in Q1 2022.
On June 21, Deutsche Bank analyst Chris Woronka maintained a Hold recommendation on Royal Caribbean Cruises Ltd. (NYSE:RCL) while lowering his price target from $76 to $50. Apart from the cruise perma-bulls, Woronka highlighted that it is challenging for most people to be positive that an effective bottom is in.
Calixto Global Investors initiated a stake in Royal Caribbean Cruises Ltd. (NYSE:RCL) during the first quarter of 2022. The hedge bought 167,400 shares in Royal Caribbean Cruises Ltd. (NYSE:RCL) at an estimated average price of $78.74 per share. As of the first quarter of 2022, 36 hedge funds monitored by Insider Monkey reported owning stakes in Royal Caribbean Cruises Ltd. (NYSE:RCL), valued at $615.53 million.
4. ZTO Express (Cayman) Inc. (NYSE:ZTO)
Calixto Global Investors’ Stake Value: $26,628,000
Percentage of Calixto Global Investors’ Portfolio: 17.78%
Number of Hedge Fund Holders: 26
Integrated logistical services are offered by ZTO Express (Cayman) Inc. (NYSE:ZTO). Through a partnership with a nationwide network, it provides quick delivery and value-added logistical services. Calixto Global Investors increased its stake in ZTO Express (Cayman) Inc. (NYSE:ZTO) by 31% in the first quarter, ending the period with $26.63 million worth of the company’s stock.
At the end of the first quarter of 2022, 26 hedge funds tracked by the exclusive database of Insider Monkey reported owning stakes in ZTO Express (Cayman) Inc. (NYSE:ZTO), down from 28 funds in the preceding quarter. Kerr Neilson’s Platinum Asset Management held a notable stake in ZTO Express (Cayman) Inc. (NYSE:ZTO) at the end of Q1 2022, worth $372.64 million.
On May 25, ZTO Express (Cayman) Inc. (NYSE:ZTO) published earnings for the first quarter, announcing earnings per share of $0.18, beating estimates by $0.02. In addition, the $1.24 billion revenue for the period was up 25.5% year-over-year, exceeding estimates by $90 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Five9, Inc. (NASDAQ:FIVN), and Kanzhun Limited (NASDAQ:BZ), ZTO Express (Cayman) Inc. (NYSE:ZTO) is a notable stock in Eduardo Costa’s Calixto Global Investors portfolio.
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Disclosure: None. 7 Stocks to Buy According to Eduardo Costa’s Calixto Global Investors is originally published on Insider Monkey.
