Billionaire Daniel Sundheim’s Top 5 Stock Picks

Below are the billionaire Daniel Sundheim’s Top 5 Stock Picks. For a comprehensive list please see Billionaire Daniel Sundheim’s Top 10 Stock Picks.

5. Expedia Group, Inc. (NASDAQ: EXPE)

Online travel company Expedia Group, Inc. (NASDAQ: EXPE) has been gaining billionaire Daniel Sundheim’s confidence over the past few quarters. D1 first initiated a position in Expedia during the second quarter of 2020 and added to the existing position during the September quarter.  Online travel company currently account for 4.98% of the overall portfolio. Shares of Expedia soared 60% in the last six months.

Distillate Capital also looks optimistic over the cash position of the online travel company to face short term challenges. Distillate Capital highlighted a few stocks in an investor’s letter, including Expedia Group. Here is what Distillate Capital said:

“The biggest addition by weight in the rebalance was Expedia (EXPE), the travel company. While it is clear that the company faces a very challenging near-term environment for travel, the roughly 55% fall in the company’s share price has created a potentially very attractive longer-term opportunity. Against a market cap of just under $8 billion, the company has total debt of around $4.9 billion but offsetting cash of around $4.6 billion, which should help it to withstand near-term challenges. Looking forward, the company is projected to generate well over $1.5 billion of free cash flow per year, which gives it an extremely attractive valuation. Given that companies in our strategy are weighted on the basis of their normalized cash flows, the disconnect between the steep price decline and more stable normalized free cash flows drives a substantial increase in the position weight.”

4. Microsoft Corporation (NASDAQ: MSFT)

The hedge fund initiated a position in Microsoft Corporation (NASDAQ: MSFT) at the beginning of 2020 and increased its position by 64% in the September quarter, making it the fourth-largest stock holding of the 13F portfolio. Microsoft has been offering significant returns to investors both in the form of dividends and share price gains.

The shares of Microsoft grew 41% in the last twelve months while the company offers a quarterly dividend of $0.56 per share. Microsoft is massively profitable, generating $47.5 billion in net income over the last 12 months. 

3. Carvana Co. (NYSE:CVNA)

Online automotive retailer Carvana Co. (NYSE: CVNA) is among the biggest beneficiaries of staying at home policies. Its shares rallied almost 160% in the last twelve months, thanks to robust growth in revenues.

Billionaire Daniel Sundheim also seeks to take advantage of Carvana’s share price bull-run. The firm initiated a position in an online automotive retailer during the second quarter of 2020 and increased its stake by 379% in the September quarter.

Other hedge funds are also bullish on Carvana. It was in 53 hedge funds’ portfolios at the end of September, down slightly from the all-time high for this statistics of 57.  

Steel City Capital, which returned 13.1% net of fees for the second quarter of 2020, highlighting few stocks including Carvana in an investors letter. Here is what Steel City Capital said:

“I believe market expectations for Carvana (CVNA) are disconnected from what the company is likely to deliver, particularly as it relates to the next several quarters. One of the company’s key value propositions – purchasing a car from the comfort of your home with no direct human interaction – is tailor-made for a world of social distancing. After bottoming at $22.16, shares have risen 6.4x to their current level of $141. The market is expecting more from CVNA today than it did at the beginning of the year.”

2. Unity Software (NYSE: U)

The New York-based hedge fund has initiated a huge position in a real-time 3D development platform Unity Software (NYSE: U) during the September quarter.

D1 Capital bought 12.96 million shares of Unity valued at $1.13 billion, accounting for 6.63% of the overall portfolio. Shares of Unity Software grew 75% in the last three months., thanks to aggressive growth plans and robust revenue growth trends.

1. JD.com, Inc. (NASDAQ: JD)

The Chinese e-commerce platform JD.com, Inc. (NASDAQ: JD) is the largest stock holding of Billionaire Daniel Sundheim’s D1 Capital Partners. The firm has initiated a position in JD during the first quarter of 2019 and it has increased the position by 3% in the September quarter of 2020. The hedge fund holds 20.8 million shares of JD valued at around $1.62 billion, accounting for 9.49% of the overall portfolio.

Shares of JD.com rallied almost 150% in the last twelve months alone. Consumers shift towards online platforms along with staying at home policies added to its share price and financial numbers in the past couple of quarters.

Please also see 14 Best Internet of Things Stocks To Buy Now and Billionaire David Abrams’ Top 10 Stock Picks