In this article, we discuss 9 stocks to buy in 2022 according to Mark Massey’s AltaRock Partners. If you want to skip our detailed analysis of Massey’s history, investment philosophy, and hedge fund performance, go directly to 5 Stocks to Buy in 2022 According to Mark Massey’s AltaRock Partners.
Mark T. Massey is the managing member and president of Altarock Partners, a hedge fund he has been associated with since February 2002. He holds a bachelor’s degree in Finance from the University of Virginia. The hedge fund has averaged a 12% yearly return since its inception. Mark Massey believes in value investing, concentrating on companies with a wide moat that can maintain a competitive advantage. The fund of Mark Massey looks for investing possibilities through qualitative research, focusing on buybacks, among other things. He believes that companies that buy back huge amounts of stock demonstrate that administration is on the same page and believes in “competitive moat sustainability.” Mark Massey looks for great companies at reasonable prices with the idea that their profitability would skyrocket in a decade or two.
AltaRock Partners has a fairly-focused portfolio, with five to 10 holdings at any given moment. After doing comprehensive fundamental research, the hedge fund adopts a value-oriented approach, investing in a few firms that the investment team believes are undervalued. It plans to manage its assets as genuine business shares, referring to them as a “conglomerate,” as Warren Buffett and Ben Graham do.
In the first quarter of 2022, AltaRock Partners disclosed 9 security holdings with a portfolio worth $3.92 billion. In Mark Massey’s portfolio as of the first quarter of 2022, the top holdings include Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN).
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Our Methodology
We have selected the stocks based on Mark Massey’s AltaRock Partners investment portfolio at the conclusion of the first quarter of 2022. Insider Monkey’s database of over 900 elite hedge funds was used to assess the popularity of each stock in the hedge fund world as of Q4 2021.
Stocks to Buy in 2022 According to Mark Massey’s AltaRock Partners
9. Meta Platforms, Inc. (NASDAQ:FB)
AltaRock Partners’ Stake Value: $24,024,000
Percentage of AltaRock Partners’ 13F Portfolio: 0.61%
Number of Hedge Fund Holders: 224
Meta Platforms, Inc. (NASDAQ:FB) is a company that creates social networking applications. It creates technology that allows individuals to connect, form communities, and expand their enterprises. Ken Fisher’s Fisher Asset Management held a notable stake in Meta Platforms, Inc. (NASDAQ:FB) at the end of the first quarter of 2022, worth $2.49 billion.
Guggenheim analyst Michael Morris lowered his price target on Meta Platforms, Inc. (NASDAQ:FB) to $250 from $275 on May 18 while maintaining a Buy rating on the company. He attributed the target revision to lower expectations and somewhat lower than consensus normalized EBITDA margins moving into Q1 results.
Mark Massey first invested in Meta Platforms, Inc. (NASDAQ:FB) in the fourth quarter of 2020 by purchasing more than 1.71 million shares. However, in the first quarter of 2022, Mark Massey cut his stake in Meta Platforms, Inc. (NASDAQ:FB) by 80%. His hedge fund still holds 108,039 shares of Meta Platforms, Inc. (NASDAQ:FB), worth more than $24.02 million.
Meta Platforms, Inc. (NASDAQ:FB) was part of 224 hedge fund portfolios in the fourth quarter of 2021, compared to 248 hedge funds in the previous quarter. Their total stake values were $31.85 billion and $38.57 billion, respectively.
Meta Platforms, Inc. (NASDAQ:FB), like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), is one of the stocks to buy according to Mark Massey’s AltaRock Partners.
Vulcan Value Partners, in its first-quarter 2022 investor letter, talked about Meta Platforms, Inc. (NASDAQ:FB). Here is what the fund said:
“Meta Platforms Inc., the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta, we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”
8. Moody’s Corporation (NYSE:MCO)
AltaRock Partners’ Stake Value: $41,606,000
Percentage of AltaRock Partners’ 13F Portfolio: 1.06%
Number of Hedge Fund Holders: 58
Moody’s Corporation (NYSE:MCO) works in the worldwide financial markets, providing credit ratings, research, tools, and data analysis. On May 3, Deutsche Bank analyst Faiza Alwy maintained a Buy rating on Moody’s Corporation (NYSE:MCO) and decreased her price objective to $372 from $408. In a research report, Alwy informed investors that Moody’s Corporation (NYSE:MCO) had lowered its fiscal 2022 guidance owing to reduced issuance volumes.
The hedge fund chaired by Mark Massey held 123,310 shares in Moody’s Corporation (NYSE:MCO) in Q1 2022, worth over $41.61 million. 58 out of the 924 hedge funds held stakes in Moody’s Corporation (NYSE:MCO) in the fourth quarter of 2021, worth $16.85 billion, compared to the same number of funds in the preceding quarter holding stakes in Moody’s Corporation (NYSE:MCO) worth $15.70 billion.
On May 2, Moody’s Corporation (NYSE:MCO) posted earnings for the first quarter of 2022, reporting an EPS of $2.89, in line with market estimates. In addition, revenue for the quarter was $1.52 billion, down 5% from the previous year’s first-quarter revenue. The company also issued a quarterly dividend of $0.70 per share, in line with previous.
Legendary investor and billionaire Warren Buffett’s Berkshire Hathaway is the most significant stakeholder of Moody’s Corporation (NYSE:MCO) as of the first quarter of 2022. The Oracle of Omaha owns 24.67 million shares of the company, worth $8.32 billion.
7. Mastercard Incorporated (NYSE:MA)
AltaRock Partners’ Stake Value: $89,791,000
Percentage of AltaRock Partners’ 13F Portfolio: 2.28%
Number of Hedge Fund Holders: 144
Mastercard Incorporated (NYSE:MA) is a technology-based firm. Consumers, financial institutions, merchants, governments, and businesses are all connected via the payments sector. On May 19, Mastercard Incorporated (NYSE:MA) and fintech giant OPay announced a strategic partnership, opening the door for greater financial inclusion and economic growth by allowing millions of people across the Middle East and Africa to make electronic payments.
On May 17, Goldman Sachs analyst Will Nance initiated coverage of Mastercard Incorporated (NYSE:MA), maintaining a Buy rating and a $460 price target, representing a 38% upside. Based on its 13F holdings for the first quarter of 2022, AltaRock Partners owned 251,249 shares in Mastercard Incorporated (NYSE:MA). The position was valued at $89.79 million.
Among the hedge funds tracked by Insider Monkey, Charles Akre’s Akre Capital Management is a notable shareholder of Mastercard Incorporated (NYSE:MA) as of Q1 2022, with 5.86 million shares worth $2.09 billion. In the fourth quarter, fund managers reduced their Mastercard Incorporated (NYSE:MA) holdings. There were 144 hedge funds in our database that held stakes in Mastercard Incorporated (NYSE:MA)’s at the end of the fourth quarter, compared to 146 funds in the third quarter.
Ensemble Capital mentioned Mastercard Incorporated (NYSE:MA) in its Q1 2022 investor letter. Here is what the fund said:
“Mastercard (7.6% weight in the Fund): This company literally earns a percent based fee on dollars spent. When inflation increases the prices of goods across the economy, Mastercard’s revenue increases along with inflation. Thus, the company in some respects is perfectly hedged against inflation with their revenue accelerating automatically when inflation surges.”
6. Visa Inc. (NYSE:V)
AltaRock Partners’ Stake Value: $331,791,000
Percentage of AltaRock Partners’ 13F Portfolio: 8.45%
Number of Hedge Fund Holders: 142
Visa Inc. (NYSE:V) is a global financial services company based in the United States. It enables electronic payment transfers worldwide, primarily through Visa-branded credit cards, debit cards, and prepaid cards. By the end of the fourth quarter of 2021, Insider Monkey identified 142 hedge funds that had stakes in Visa Inc. (NYSE:V). The total stakes held by these funds amounted to more than $29.30 billion. In Q1 2022, Chris Hohn’s TCI Fund Management held a prominent stake in Visa Inc. (NYSE:V), with more than 19.92 million shares worth $4.42 billion.
AltaRock Partners owned 1.50 million shares in Visa Inc. (NYSE:V) valued at over $331.79 million, representing 8.45% of the hedge fund’s Q1 portfolio. Will Nance of Goldman Sachs initiated coverage of Visa Inc. (NYSE:V) on May 17, reiterating a Buy rating and a $282 price target. He believes that Visa is the world’s premier payment company, with “great leverage to the long-term secular growth driver from payment electronification”. Paysafe Limited (NYSE:PSFE) and Visa Inc. (NYSE:V) announced on May 3 that their partnership has been expanded to include Visa Direct, Visa’s real-time push payment technology.
Just like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Visa Inc. (NYSE:V) is a notable stock in the Q1 portfolio of Mark Massey’s AltaRock Partners.
Baron Funds mentioned Visa Inc. (NYSE:V) in its Q1 2022 investor letter. Here’s what the firm said:
“Shares of global payment network Visa, Inc. (NYSE:V) were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”
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Disclosure: None. 9 Stocks to Buy in 2022 According to Mark Massey’s AltaRock Partners is originally published on Insider Monkey.
