In this article, we discuss the top 5 stock picks of Amit Nitin Doshi’s Harbor Spring Capital. If you want our detailed analysis of these stocks, go directly to Amit Nitin Doshi’s Harbor Spring Capital Portfolio: Top 10 Stock Picks.
5. Workday, Inc. (NASDAQ:WDAY)
Harbor Spring Capital’s Stake Value: $35,984,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 2.53%
Number of Hedge Fund Holders: 72
Workday, Inc. (NASDAQ:WDAY) is an American software company specializing in cloud-based software for financial management and human capital management. Harbor Capital Management holds a $35.9 million stake in Workday, Inc. (NASDAQ:WDAY) as of September this year, which represents 2.53% of the firm’s stock portfolio.
As of the second quarter of 2021, 72 hedge funds in the database of elite funds maintained by Insider Monkey reported owning stakes worth $5.18 billion in Workday, Inc. (NASDAQ:WDAY).
Brad Sills from BofA reported on November 15 that healthy upsell deals, a growing customer base, and improving demand for the upcoming quarters is in the works for Workday, Inc. (NASDAQ:WDAY). He consequently kept a Buy rating on the stock, raising the price target from $310 to $360.
Here is what ClearBridge Investments has to say about Workday, Inc. (NASDAQ:WDAY) in its Q1 2021 investor letter:
“In addition to the new issue market, we have been tactically adding growth exposure. We took advantage of the selloff in disruptors that comprise a large portion of the portfolio to initiate a position in enterprise software maker Workday.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Harbor Spring Capital’s Stake Value: $42,706,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.00%
Number of Hedge Fund Holders: 271
Billionaire Jeff Bezos’ Amazon.com, Inc. (NASDAQ:AMZN) is a tech mega corporation, specializing in ecommerce, artificial intelligence, cloud computing, and digital streaming. It was revealed in a November 15 story that Amazon.com, Inc. (NASDAQ:AMZN) will collaborate with International Business Machines Corporation (NYSE:IBM) to speed up the energy sector’s transition to the cloud, which will allow them to benefit from the on-demand services provided by AWS Cloud and IBM Cloud, resultantly freeing up resources and capital for energy companies to invest in a sustainable future.
Doshi’s Harbor Spring Capital holds 13,000 shares in Amazon.com, Inc. (NASDAQ:AMZN) as of September 2021, worth $42.7 million, representing 3% of the firm’s investment portfolio.
The Q3 results for Amazon.com, Inc. (NASDAQ:AMZN) failed to meet analysts’ expectations. Earnings for the quarter were announced on October 28, with EPS for the period totaling $6.12, missing analysts’ consensus estimates by $2.78. Similarly, revenue for Q3 came in at $110.81 billion, missing target revenue by -$784.89 million.
Ivan Feinseth from Tigress Financial kept a Buy rating on Amazon.com, Inc. (NASDAQ:AMZN) on November 10, raising the price target from $4,370 to $4,460. The analyst believes that 2022 sales growth will be solid, and Amazon.com, Inc. (NASDAQ:AMZN) is positioned well to navigate the supply chain bottlenecks.
Here is what Polen Capital has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
3. Shopify Inc. (NYSE:SHOP)
Harbor Spring Capital’s Stake Value: $44,741,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.15%
Number of Hedge Fund Holders: 85
Shopify Inc. (NYSE:SHOP) is a Canadian multinational e-commerce giant that allows businesses to operate on its platform, and offers end-to-end services including processing payments, marketing, delivery and shipment, and customer engagement tools. Shopify Inc. (NYSE:SHOP) operates in over 170 countries, and reported more than 1.7 million registered businesses as of May 2021.
Harbor Spring Capital holds 33,000 shares in Shopify Inc. (NYSE:SHOP), as of September this year, valued at $44.7 million. This stock accounts for 3.15% of the firm’s Q3 portfolio.
Shopify Inc. (NYSE:SHOP) posted its Q3 results on October 28. EPS in the period totaled $0.81, missing estimates by -$0.41. As of the second quarter of 2021, 85 hedge funds in the database of Insider Monkey were long Shopify Inc. (NYSE:SHOP), down from 91 in the preceding quarter.
Loop Capital analyst Anthony Chukumba downgraded Shopify Inc. (NYSE:SHOP) from Buy to Hold with a $1600 price target that remained unchanged, citing that the stock is trading at 34.1 times his estimated revenue for 2022.
ClearBridge Investments mentioned Shopify Inc. (NYSE:SHOP) in its Q2 2021 investor letter. Here is what they said:
“Shopify (is one of the) companies that have become go-to platforms for small and medium size businesses (SMBs) engaged in e-commerce and social media marketing, rebounded strongly in the quarter after being caught in the selloff among high-multiple growth names since Vaccine Monday. These and the portfolio’s other disruptors had thrived through the first part of the pandemic, leading us to trim positions into strength and reallocate cash into more attractively priced evolving opportunities and steady compounders that had been overly punished by lockdowns and a drop in economic activity.”
2. Microsoft Corporation (NASDAQ:MSFT)
Harbor Spring Capital’s Stake Value: $47,785,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.36%
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ:MSFT) is one of the Big Five US tech companies, known for its computer software, operating systems, and relevant consumer electronics.
On October 26, Microsoft Corporation (NASDAQ:MSFT) reported Q3 earnings. EPS for Q3 came in at $2.27, beating estimates by $0.19. Revenue for the period totaled $45.32 billion, surpassing estimates by $1.33 billion. Deutsche Bank analyst Brad Zelnick on November 1 initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with a Buy rating and a $390 price target. He believes that Microsoft Corporation (NASDAQ:MSFT) can tap into the public cloud market effectively, which is valued at $127 billion in 2021.
Microsoft Corporation (NASDAQ:MSFT) is one of the most sought after stocks by the smart money, with 238 hedge funds being bullish on the stock as of the second quarter of 2021.
Here is what Alger has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:
“Microsoft Corporation was among the top contributors to performance during the third quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 51% in the second quarter. This high unit volume growth is a primary driver of the company’s higher share price, but the company’s strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
1. Dell Technologies Inc. (NYSE:DELL)
Harbor Spring Capital’s Stake Value: $53,477,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.76%
Number of Hedge Fund Holders: 62
Dell Technologies Inc. (NYSE:DELL) is the top stock pick of Harbor Spring Capital, as of September this year, with the investment firm owning stakes worth $53.4 million in the tech corporation, which accounts for 3.76% of the firm’s Q3 portfolio. Dell Technologies Inc. (NYSE:DELL) is an American multinational technology company that offers personal computers, smart phones, software, computer security, and information security services, among other related products and services.
As of Q2, 62 hedge funds were bullish on Dell Technologies Inc. (NYSE:DELL), up from 54 in the previous quarter.
Citi analyst Jim Suva, on November 4, kept a Buy rating on Dell Technologies Inc. (NYSE:DELL), raising the price target from $67.5 to $70. The analyst reported that the shares have outperformed since December 2020, gaining 50% year-to-date. However, Dell Technologies Inc. (NYSE:DELL) was removed from Citi’s US Focus List.
Here is what Third Point Management has to say about Dell Technologies Inc. (NYSE:DELL) in its Q3 2021 investor letter:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
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