In this article, we discuss the top 10 stock picks of billionaire Daniel Sundheim’s D1 Capital Partners. If you want to see more top holdings of the hedge fund, check out Billionaire Daniel Sundheim’s D1 Capital Portfolio: Top 5 Stock Picks.
Daniel Sundheim, the billionaire chief of D1 Capital Partners, made headlines recently as his hedge fund plummeted about 23% through May 2022. The hedge fund invests half of its assets in securities and the rest in private startups. The startup investments that led to a whopping 70% gain for D1 Capital in 2021 are what ravaged its performance in 2022. The hedge fund’s decline amid the rocky stock market exceeded the 13% losses posted by the S&P 500 Index in the first five months of 2022.
After racking significant losses, Daniel Sundheim and other investors like him are assessing their investments in tech unicorns and once-promising startups. The valuations for these private investments slumped worse than the tech stocks that were excessively sold off this year. To reorganize his portfolio, Sundheim’s D1 Capital disposed of its high-growth tech names in the first quarter of 2022.
However, Daniel Sundheim has amassed personal wealth in a short time as the chief investment officer of D1 Capital Partners, which he founded in 2018. This means his investing strategies are worth observing for long-term stock market gains. He invests primarily in the information technology, consumer discretionary, and healthcare sectors. Some of the notable stocks in Daniel Sundheim’s D1 Capital portfolio include Expedia Group, Inc. (NASDAQ:EXPE), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT).
Our Methodology
We used the Q1 2022 portfolio of billionaire Daniel Sundheim’s D1 Capital Partners, selecting the hedge fund’s top 10 holdings for this analysis.
Daniel Sundheim of D1 Capital Partners
Billionaire Daniel Sundheim’s D1 Capital Portfolio: Top Stock Picks
10. RH (NYSE:RH)
D1 Capital’s Stake Value: $310,943,000
Percentage of D1 Capital’s 13F Portfolio: 3.66%
Number of Hedge Fund Holders: 63
RH (NYSE:RH) is a California-based home furnishings company. RH (NYSE:RH)’s products include furniture, lighting, textiles, bathware, décor, and garden accessories. In the first quarter of 2022, Daniel Sundheim’s hedge fund owned 953,551 shares of the company worth about $311 million, representing 3.66% of the total 13F portfolio.
On June 22, investment advisory Jefferies highlighted stocks that provide Growth at a Reasonable Price (GARP) but have had a tough Q2. RH (NYSE:RH) was one of the firm’s top Buy-rated ideas in terms of P/E to growth and an attractive FCF yield, which also offers potential for improved GARP.
According to Insider Monkey’s data, RH (NYSE:RH) was part of 63 hedge fund portfolios at the end of Q1 2022, up from 58 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading position holder in the company, with 2.17 million shares worth $707.6 million.
In addition to Expedia Group, Inc. (NASDAQ:EXPE), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), elite hedge funds are piling into RH (NYSE:RH).
Here is what Polen US SMID Company Growth Fund has to say about RH (NYSE:RH) in its Q1 2022 investor letter:
“RH is a furniture store company with brand recognition and a unique business model. The company’s stock price fell sharply over the first three months of 2022 despite solid operating results, which resulted in what we believed to be an attractive opportunity to add to our position in the company. We are mindful that, on the margin, the company is certainly experiencing some early impact from record inflation and rising interest rates, and we feel comfortable in both the management team’s ability to navigate these challenges and the power of the company’s brand and its long-term potential.”
9. Hilton Worldwide Holdings Inc. (NYSE:HLT)
D1 Capital’s Stake Value: $336,956,000
Percentage of D1 Capital’s 13F Portfolio: 3.96%
Number of Hedge Fund Holders: 52
Hilton Worldwide Holdings Inc. (NYSE:HLT) is a Virginia-based hospitality company that owns, develops, and franchises hotels and resorts. In March, the company resumed its share repurchase program and in the second quarter of 2022, Hilton Worldwide Holdings Inc. (NYSE:HLT) declared a quarterly cash dividend of $0.15 per share. Wall Street analysts have a Hold rating on the stock with an average price target of $150.88.
In the first quarter of 2022, billionaire Daniel Sundheim’s D1 Capital portfolio held 2.22 million shares of Hilton Worldwide Holdings Inc. (NYSE:HLT), worth about $337 million, representing 3.96% of the total 13F securities.
As per Insider Monkey’s data, 52 hedge funds were bullish on Hilton Worldwide Holdings Inc. (NYSE:HLT) at the end of Q1 2022, up from 48 funds in the earlier quarter. Bill Ackman’s Pershing Square is the leading position holder in the company, with roughly 10 million shares worth $1.5 billion.
Here is what Pershing Square Capital Management has to say about Hilton Worldwide Holdings Inc. (NYSE:HLT) in its Q4 2021 investor letter:
“Hilton is a high-quality business with a multi-year runway of accelerated earnings growth and an exceptional management team. Industry conditions poised to exceed pre-COVID levels in the near term.
HLT well positioned for enhanced long-term performance.
-Average daily revenue per room (“RevPAR”) likely to recover to pre-COVID levels before the end of 2022.
-Occupancy is improving with average daily rate (“ADR”) already above pre-COVID levels.
-Ability to change room rates daily provides hedge against inflation.
HLT well positioned for enhanced long-term performance.
-Market share likely to increase over time.
-Committed to higher long-term structural margins given productivity actions.
-Substantial capital return over time.
COVID-19 validated HLT’s unique high-quality asset-light business model.
-Ability to deftly navigate the “1,000-year-flood” supports higher valuation.
Hilton is poised to deliver long-term earnings meaningfully greater than pre-2020 levels. HLT’s share price including dividends increased 40% in 2021 and has decreased 2% year-to-date in 2022.”
8. Procore Technologies, Inc. (NYSE:PCOR)
D1 Capital’s Stake Value: $366,615,000
Percentage of D1 Capital’s 13F Portfolio: 4.31%
Number of Hedge Fund Holders: 36
Procore Technologies, Inc. (NYSE:PCOR) is a California-based company offering a cloud construction management platform and related software products in the United States and internationally. Wall Street analysts hold a consensus Buy rating on Procore Technologies, Inc. (NYSE:PCOR), with an average price target of $76.10.
Securities filings for Q1 2022 that Daniel Sundheim’s D1 Capital owned 6.3 million shares of Procore Technologies, Inc. (NYSE:PCOR), worth $366.6 million, representing 4.31% of the total holdings. The hedge fund boosted its stake in the company by 11% in Q1.
Among the hedge funds tracked by Insider Monkey, 36 funds were bullish on Procore Technologies, Inc. (NYSE:PCOR) at the end of the first quarter of 2022, up from 34 funds in the prior quarter. Chase Coleman’s Tiger Global Management is one of the leading shareholders of the company, with 4.6 million shares worth $267.4 million.
7. Insulet Corporation (NASDAQ:PODD)
D1 Capital’s Stake Value: $384,127,000
Percentage of D1 Capital’s 13F Portfolio: 4.52%
Number of Hedge Fund Holders: 40
Insulet Corporation (NASDAQ:PODD) is a Massachusetts-based company that specializes in insulin delivery systems for people with diabetes. On July 11, Insulet Corporation (NASDAQ:PODD) reported an agreement with Swiss pharma giant Roche to settle a patent infringement lawsuit, paying $20 million to Roche Diabetes Care. In the first quarter of 2022, billionaire Daniel Sundheim’s D1 Capital Partners reported owning 1.4 million Insulet Corporation (NASDAQ:PODD) shares, worth over $384 million, representing 4.52% of the total 13F holdings.
According to Insider Monkey’s data, 40 hedge funds were bullish on Insulet Corporation (NASDAQ:PODD) at the end of March 2022, up from 39 funds in the prior quarter. Greg Poole’s Echo Street Capital Management is a prominent shareholder of the company, with 802,434 shares worth $213.76 million.
Here is what ClearBridge Investments Aggressive Growth Strategy has to say about Insulet Corporation (NASDAQ:PODD) in its Q1 2022 investor letter:
“Health care has always been a core foundation of the portfolio and we have been diversifying our health care exposure to include services and solutions beyond our traditional overweight to biopharmaceuticals and managed care. We first purchased Insulet (NASDAQ:PODD) , a leading provider of insulin pumps for diabetes patients, in the fourth quarter of 2021, and we have aggressively added to the position since then. The company is currently the only meaningful manufacturer of patch pumps, the preferred form factor for many patients as compared to traditional tubed pumps. We believe Insulet has a long runway for growth given its large and underpenetrated market, which is only one-third penetrated in Type 1 diabetes and low-single-digit penetrated in the insulin- intensive Type 2 diabetes population. Additionally, we see the launch of the company’s next generation offering, Omnipod 5, which received FDA clearance in January, as an accelerant to growth. Insulet has strong gross margins and is profitable today, though we still see room for significant operating margin expansion ahead.”
6. T-Mobile US, Inc. (NASDAQ:TMUS)
D1 Capital’s Stake Value: $427,868 ,000
Percentage of D1 Capital’s 13F Portfolio: 5.03%
Number of Hedge Fund Holders: 91
T-Mobile US, Inc. (NASDAQ:TMUS) was founded in 1994 and is headquartered in Bellevue, Washington. The company offers mobile communications services in the United States, Puerto Rico, and the Virgin Islands, specializing in voice, messaging, and data services. Daniel Sundheim’s D1 Capital Partners owned 3.3 million T-Mobile US, Inc. (NASDAQ:TMUS) shares in the first quarter of 2022, worth $427.8 million, representing 5.03% of the total 13F portfolio.
On June 14, T-Mobile US, Inc. (NASDAQ:TMUS) and Oceus announced a partnership to deliver key offerings to the U.S. government. With T-Mobile’s Ultra Capacity 5G network, the companies provide high-capacity emergency communications in support of Operation Allies Welcome OAW. 27 Wall Street analysts have a consensus Buy rating on T-Mobile US, Inc. (NASDAQ:TMUS), with an average price target of $171.14.
According to Insider Monkey’s data, 91 hedge funds were bullish on T-Mobile US, Inc. (NASDAQ:TMUS) at the end of March 2022, up from 86 funds in the last quarter. Andreas Halvorsen’s Viking Global is the largest shareholder of the company, with 13.4 million shares worth $1.72 billion.
Like Expedia Group, Inc. (NASDAQ:EXPE), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), Daniel Sundheim is bullish on T-Mobile US, Inc. (NASDAQ:TMUS).
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about T-Mobile US, Inc. (NYSE:TMUS) in its Q4 2021 investor letter:
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
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Disclosure: None. Billionaire Daniel Sundheim’s D1 Capital Portfolio: Top 10 Stock Picks is originally published on Insider Monkey.
