In this article, we discuss the 9 best value stocks to buy now according to Vinit Bodas’ Deccan Value Investors based on Q3 holdings of the fund. If you want to skip our detailed analysis of Bodas’ history, investment philosophy, and hedge fund performance, go directly to the 5 Best Value Stocks to Buy Now.
Vinit Bodas graduated from the University of Texas at Austin with a master’s degree in business administration. Deccan Value Advisors went out of business in 2009 when one of its co-founders opted to quit. Vinit Bodas created Deccan Value Investors in February 2010, and it maintained the same approach as the first Deccan fund. Presently, he is the Managing Partner and Chief Investment Officer of Deccan Value Investors.
Deccan Value Investors is a hedge fund established in Greenwich. The hedge fund employs a long-biased strategic approach, focusing on stocks, securities, and instruments convertible into equities, as well as other derivatives with a comparable level of risk. At its peak, the fund had more than a billion dollars in assets under management, focusing on a small number of stocks.
Traditional value investors invest in stocks with high book value to market value ratios. We believe this approach is outdated as several high growth stocks trading at relatively low PE ratios should also be considered by “value investors”. Vinit Bodas’ value approach is similar to ours as you can see from some of the fund’s holdings below. Mr. Bodas’ hedge fund, Deccan Value Investors, operates nine private funds and manages over $2.53 billion in 13F assets in the third quarter of 2021.
Vinit Bodas’ Deccan Value Investors has shares in Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and salesforce.com, inc. (NYSE:CRM) as of the third quarter of 2021.
Source: pexels
Alphabet Inc. (NASDAQ:GOOG) is one of the companies in Vinit Bodas’ Deccan Value Investors portfolio. Alphabet Inc. (NASDAQ:GOOG) announced in January that it would launch a restricted test of an app that would bring Android games to Windows PCs, with the test going to take place in Hong Kong, South Korea, and Taiwan.
Deccan Value Investors also has a $343.13 million stake in Microsoft Corporation (NASDAQ:MSFT). In January, Morgan Stanley analyst Keith Weiss raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $372 from $364 and kept an “Overweight” rating on the shares.
salesforce.com, inc. (NYSE:CRM) is another large cap stock in Deccan Value Investors’ portfolio. In January, Deutsche Bank analyst Brad Zelnick lowered his price target on salesforce.com, inc. (NYSE:CRM) to $300 from $360 and reiterated a “Buy” rating on the shares. He recommends a more balanced strategy for the group with greater value awareness than prior years.
Our Methodology
With this economic outlook in mind, let’s start our list of the top 9 stocks to buy now according to Vinit Bodas’ Deccan Value Investors. We picked these stocks from the Q3 portfolio of Bodas’ hedge fund.
Best Value Stocks to Buy Now According to Vinit Bodas’ Deccan Value Investors
9. Herbalife Nutrition Ltd. (NYSE:HLF)
Deccan Value Investors Stake Value: $158,726,000
Percentage of Deccan Value Investors’ 13F Portfolio: 6.27%
Number of Hedge Fund Holders: 38
Herbalife Nutrition Ltd. (NYSE:HLF) is a multi-level marketing company that creates and distributes dietary supplements worldwide. Herbalife Nutrition Ltd. (NYSE:HLF) reported $1.4 billion in net sales in the third quarter of 2021, a 6% reduction from the third quarter of 2020 and in line with the forecast.
Vinit Bodas’ Deccan Value Investors first bought a stake in Herbalife Nutrition Ltd. (NYSE:HLF) in the first quarter of 2015. The hedge fund also strengthened its position in Herbalife Nutrition Ltd. (NYSE:HLF) in the third quarter of 2021, by buying 780,218 additional shares. This makes their stake in the company total 3.75 million shares worth $158.73 million.
Herbalife Nutrition Ltd. (NYSE:HLF) recently saw a decrease in hedge fund sentiment. Long hedge fund positions fell to 38 at the end of the third quarter, down from 40 at the end of the previous quarter.
Just like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and salesforce.com, inc. (NYSE:CRM), Herbalife Nutrition Ltd. (NYSE:HLF) is one of the best value stocks to buy according to Vinit Bodas’ Deccan Value Investors.
In its third-quarter 2021 investor letter, Bronte Capital, an investment management firm, discussed its stance on Herbalife Nutrition Ltd. (NYSE:HLF). Here is what the fund said:
“Herbalife is – as we have discussed many times before – a multi-level marketing scheme selling weight-loss shakes. The idea is simple. If I replaced six meals a week with low-calorie protein shakes and I walked an extra 15km a week I would quickly lose 15-20kgs. It would be good for me. It is also well-nigh impossible to do.
One solution is to hire a personal trainer (usually of the opposite sex) and have them nag you. You will do tough stuff for an attractive member of the opposite sex. More realistically you could just have your friends nag you. And that is why this works so well as a multi-level marketing scheme. The person who sells you the shakes has an incentive to keep you on the diet.
We have looked at many distributors and we see a weight-loss program – implemented for (literally) millions of people – which works about as well as any weight-loss health program that ever existed. That still means it fails most of the time – but it works enough that we can be proud of owning this stock and the health benefits it provides. Herbalife, it turns out, grew well during COVID. This was initially a surprise to us – as we thought Herbalife depended on the personal touch to make the sale. But, instead, weight loss and associated social clubs moved online – and – in many cases were the main social outlet the customers had.”
8. Meta Platforms, Inc. (NASDAQ:FB)
Deccan Value Investors Stake Value: $186,461,000
Percentage of Deccan Value Investors’ 13F Portfolio: 7.37%
Number of Hedge Fund Holders: 248
Meta Platforms, Inc. is an international technology company. Meta Platforms, Inc. (NASDAQ:FB) announced 1.93 billion daily active users in the third quarter, compared to 1.92 billion expectations.
Based on tests that suggest a solid ad expenditure growth in Q4, boosted by high seasonal demand, OTR Global altered its outlook on Meta Platforms, Inc. (NASDAQ:FB) from “Mixed” to “Positive” in January.
According to our database, the number of Meta Platforms, Inc.’s (NASDAQ:FB) long hedge funds positions decreased at the end of the third quarter of 2021. As a result, there were 248 hedge funds that hold a position in Meta Platforms, Inc. (NASDAQ:FB) compared to 266 funds in the preceding quarter.
In its fourth-quarter 2021 investor letter, Wedgewood Partners mentioned Meta Platforms, Inc. (NASDAQ:FB). Here is what the fund said:
“Meta Platforms, formerly known as Facebook, detracted from performance. Meta’s core Facebook properties reported an impressive +35% revenue growth, an acceleration over last year’s +22% revenue growth, as small businesses continued to flock to the Company’s advertising platform. However, the Company’s forward-looking guidance came in below what many investors were expecting because changes to Apple’s mobile operating system (iOS) privacy policies made it more difficult for advertisers and Facebook to track the performance of ad spend. Facebook has anticipated Apple’s changes for some time; however the rollout of alternative performance tracking will take time for advertisers to implement. Longer-term, we think Facebook’s core properties represent a compelling value proposition for most small advertisers because the Company has billions of daily users that flock to it. Although Meta’s spending on noncore projects related to what it defines as the “metaverse” has driven expense growth higher, we consider it not too out of line compared to the spending of most large technology companies that often just refer to it as “research and development.” Meta trades at an attractive multiple and with an unmatched competitive positioning in social media advertising, so we added to our position during the quarter.”
7. Woodward, Inc. (NASDAQ:WWD)
Deccan Value Investors Stake Value: $227,952,000
Percentage of Deccan Value Investors’ 13F Portfolio: 9.01%
Number of Hedge Fund Holders: 25
WWD ranks 7th on our list of the best value stocks to buy now. Woodward, Inc. (NASDAQ:WWD) is a company that sells control system components and solutions to the aerospace and industrial sectors. As part of comprehensive research on crucial Aerospace and Defense stocks, Truist analyst Michael Ciarmoli raised Woodward, Inc. (NASDAQ:WWD) to “Buy” from “Hold” with a price target of $143, up from $110, in January.
Vinit Bodas holds 2.01 million shares of Woodward, Inc. (NASDAQ:WWD), valued about $227.95 million, putting him at the top of Insider Monkey’s list of over 867 hedge funds. Next on the list is Eagle Capital Management, which owns 1.92 million shares of the company, worth over $217.43 million.
Woodward, Inc. (NASDAQ:WWD) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. In addition, there were 22 hedge funds in our database with Woodward, Inc. holdings at the end of the previous quarter.
6. Charter Communications, Inc. (NASDAQ:CHTR)
Deccan Value Investors Stake Value: $241,113,000
Percentage of Deccan Value Investors’ 13F Portfolio: 9.53%
Number of Hedge Fund Holders: 74
Charter Communications, Inc. (NASDAQ:CHTR) is an American telecommunications and media business. Even after selling 7,600 shares of Charter Communications, Inc. (NASDAQ:CHTR) stock in the third quarter, Vinit Bodas’ Deccan Value Investors still holds 331,400 shares of Charter Communications, Inc., worth about $241.11 million.
In January, RBC Capital analyst Kutgun Maral upgraded Charter Communications, Inc. (NASDAQ:CHTR) to “Outperform” from “Sector Perform” with a price target of $690, down from $770. According to the analyst, the unfavorable opinion on Wall Street has made the competitive risks for cable providers in broadband extremely difficult.
Overall, 74 hedge funds monitored by Insider Monkey were bullish on Charter Communications, Inc. (NASDAQ:CHTR) in the third quarter. The stakes of these funds are valued at $18.79 billion.
Along with Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and salesforce.com, inc. (NYSE:CRM), Charter Communications, Inc. (NASDAQ:CHTR) is one of the best value stocks to buy according to Vinit Bodas’ Deccan Value Investors.
ClearBridge Investments, in its first-quarter 2021 investor letter, mentioned Charter Communications, Inc. (NASDAQ:CHTR). Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter trailed after generating robust returns earlier in the recovery.”
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Disclosure: None. 9 Best Value Stocks to Buy Now is originally published on Insider Monkey.
