Billionaire Paul Singer’s Top 12 Long-Term Stock Picks

3. Pinterest, Inc. (NYSE:PINS)

Elliott Management’s Stake Value: $906.36 Million

Elliott Management First Major Purchase:  2020

Number of Hedge Fund Holders: 66

Pinterest, Inc. (NYSE:PINS) is a communication services company that operates as a visual search and discovery platform. It offers a platform for finding ideas, such as recipes and home and style inspiration. The stock is down by about 16% in 2024 on investors reacting to soft guidance for its fourth quarter.

Amid the sell-off, it remains one of Paul Singer’s long-term stock picks, thanks to the robust underlying growth. Over the past 12 months, Pinterest, Inc. (NYSE:PINS) has achieved a 17.7% revenue growth and a robust 78.9% gross profit margin. Even though the company faces stiff competition from small and medium-sized businesses, its revenue base shows signs of growth.

Pinterest, Inc. (NYSE:PINS) saw an 18% increase in third-quarter sales which amounted to $763.2 million, thanks to a new advertising feature, Performance +. The company now has 537 million monthly active users, boosting its net income by 354% to $30.56 million. This growth confirms Pinterest as a top platform for brands and creators to showcase image-based content, driving significant advertising revenue.

The 354% increase in net income also comes from Pinterest, Inc. (NYSE:PINS) integrating artificial intelligence features into its platform. The features have enhanced the ad targeting algorithm, boosting user engagement and helping draw in more advertisers. Pinterest has also inked strategic partnerships with Alphabet’s Google advertising Manager Ecosystem and Amazon as part of its global expansion drive.

TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding Pinterest, Inc. (NYSE:PINS) in its Q3 2024 investor letter:

“For the Communication Services sector, we generally prefer to invest in media and services companies that are either well placed from an advertising perspective with a target audience or provide differentiated services. Pinterest, Inc. (NYSE:PINS) is an image-based social media company. In late July, the company reported solid second-quarter results, though with softer than expected third quarter guidance. Revenues were up nicely, benefiting from an increase in monthly active users. Strength for the quarter was broad-based across several verticals including retail, technology, autos, and financial services. However, food and beverage vertical which has been soft since fourth quarter of 2023, down ticked further which resulted in softer than expected third quarter guidance. This caused Pinterest stock to slide by -7%.”