In this article, we discuss David Zorub’s Parsifal Capital Management’s top 10 stocks. If you want to skip our detailed analysis of these stocks, go directly to David Zorub’s Parsifal Capital Management’s Top 5 Stocks.
David Zorub founded Parsifal Capital Management in 2018, and he serves as the chief investment officer at the investment and asset management firm.
After graduating from Duke University with a Bachelor’s in economics, Zorub started his career as an analyst at Merrill Lynch in 1997. He then joined Texas Pacific Group as an associate in 1999. Zorub served as the director of business development at Finacity Corporation from 2000 to 2001. From 2001 to 2003, David Zorub completed his MBA from Columbia Business School. Over the course of his career, Zorub was a partner at Hawkshaw Capital Management for seven years until 2010, and he was also a partner and portfolio manager at BlueMountain Capital Management for another seven years till 2018, before he established the Greenwich-based Parsifal Capital Management.
Parsifal Capital Management has a top ten holdings concentration of 80.82%, with the largest holding in the Q2 portfolio being Hilton Grand Vacations Inc. (NYSE:HGV). Zorub’s portfolio consists of stocks from materials, real estate, consumer staples, consumer discretionary, information technology, and finance sectors.
The most notable stocks in Zorub’s Q2 portfolio are Bath & Body Works, Inc. (NYSE:BBWI), Hilton Grand Vacations Inc. (NYSE:HGV), Global Payments Inc. (NYSE:GPN), and Tower Semiconductor Ltd. (NASDAQ:TSEM), among others discussed in detail below.
Why should we pay attention to David Zorub’s top stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Our Methodology
Let’s discuss the top stock picks of David Zorub’s Parsifal Capital Management. This list is ranked according to Parsifal Capital Management’s stake value in each stock. We also mention available Q3 earnings, analyst ratings, and the number of hedge fund holders to give more context on each stock.
David Zorub’s Parsifal Capital Management’s Top Stocks
10. Zynga Inc. (NASDAQ:ZNGA)
Parsifal Capital Management’s Stake Value: $63,065,000
Percentage of Parsifal Capital Management’s 13F Portfolio: 5.15%
Number of Hedge Fund Holders: 49
Zynga Inc. (NASDAQ:ZNGA) is an interactive entertainment company that creates online games which are played by users worldwide. The game franchises by Zynga Inc. (NASDAQ:ZNGA) have been downloaded over 4 billion times, some of which include Farmville, CSR Racing, Empires & Puzzles, Harry Potter: Puzzles and Spells, Words with Friends, and Zynga Poker, among others. Zynga Inc. (NASDAQ:ZNGA) utilizes the Chartboost platform to monetize digital advertisements, which is a major source of revenue for the gaming company. Zynga Inc. (NASDAQ:ZNGA) is a top stock in David Zorub’s Q2 portfolio.
Parsifal Capital Management owns over 5.93 million shares in Zynga Inc. (NASDAQ:ZNGA), worth roughly $63 million. This represents 5.15% of the firm’s Q2 portfolio.
BTIG analyst Clark Lampen on October 26 kept a Buy rating on Zynga Inc. (NASDAQ:ZNGA), with a $10 price target. He believes that the upcoming year is all set for strong sales.
At the end of June, 49 hedge funds were bullish on Zynga Inc. (NASDAQ:ZNGA), up from 47 in the previous quarter.
Here is what Artisan Partners has to say about Zynga Inc. (NASDAQ:ZNGA) in their Q4 2020 investor letter:
“We also added to our position in Zynga. Our multi year investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complementary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
9. Axalta Coating Systems Ltd. (NYSE:AXTA)
Parsifal Capital Management’s Stake Value: $74,541,000
Percentage of Parsifal Capital Management’s 13F Portfolio: 6.08%
Number of Hedge Fund Holders: 47
Axalta Coating Systems Ltd. (NYSE:AXTA) is an American company specializing in coatings for the industrial and materials sectors. The company operates in over 140 countries, has 48 manufacturing facilities. The research labs at Axalta Coating Systems Ltd. (NYSE:AXTA) have issued about 740 patents on its products, which mainly include liquid and powder coatings. Axalta Coating Systems Ltd. (NYSE:AXTA) is one of the top stocks in Parsifal Capital Management’s Q2 portfolio.
Parsifal Capital Management holds a $74.5 million stake in Axalta Coating Systems Ltd. (NYSE:AXTA), which represents 6.08% of the firm’s Q2 portfolio.
Earnings for Q3 were announced on October 25 by Axalta Coating Systems Ltd. (NYSE:AXTA), with the Q3 EPS being $0.39, $0.05 more than analysts had estimated.
As of the end of the second quarter, 47 hedge funds traced by Insider Monkey reported owning stakes in Axalta Coating Systems Ltd. (NYSE:AXTA), up from 43 in Q1.
Like Bath & Body Works, Inc. (NYSE:BBWI), Hilton Grand Vacations Inc. (NYSE:HGV), Global Payments Inc. (NYSE:GPN), and Tower Semiconductor Ltd. (NASDAQ:TSEM), Axalta Coating Systems Ltd. (NYSE:AXTA) is a notable stock in David Zorub’s Q2 investment portfolio.
Here is what Ariel Investments has to say about Axalta Coating Systems Ltd. (NYSE:AXTA) in its Q1 2021 investor letter:
“While we did not exit any holdings during the quarter in Ariel Fund, we initiated a position in Axalta Coating Systems, Ltd. (AXTA) which is emerging from the shadow of its former parent, DuPont. We expect Axalta—a leading manufacturer of coatings for cars and trucks—to continue to gain market share from ongoing consolidation in its refinishing business and further margin improvement through cost savings programs.”
8. Global Payments Inc. (NYSE:GPN)
Parsifal Capital Management’s Stake Value: $78,837,000
Percentage of Parsifal Capital Management’s 13F Portfolio: 6.43%
Number of Hedge Fund Holders: 66
The next stock on our list of David Zorub’s Parsifal Capital Management’s top stocks is Global Payments Inc. (NYSE:GPN), an American financial technology corporation that is operating on a global scale. Global Payments Inc. (NYSE:GPN) helps the commerce ecosystem with end-to-end transaction support, and the company’s expertise is utilized by small, mid-cap, enterprise level, and multinational organizations. Global Payments Inc. (NYSE:GPN) is a top stock pick of David Zorub as of the second quarter.
Parsifal Capital Management owns 420,376 shares in Global Payments Inc. (NYSE:GPN), worth $78.83 million, making up 6.43% of the firm’s 13F portfolio.
66 hedge funds monitored diligently by Insider Monkey’s database of elite funds were long Global Payments Inc. (NYSE:GPN) at the end of the second quarter, up from 62 in Q1.
Global Payments Inc. (NYSE:GPN) disclosed Q3 earnings on November 2, and the EPS came in at $2.18, beating estimates by $0.03. Global Payments Inc. (NYSE:GPN)’s Q3 revenue was $2 billion, also exceeding analysts’ expectations by $10.29 million.
James Friedman, a Susquehanna analyst, on November 3 kept a Positive rating on Global Payments Inc. (NYSE:GPN) with a $240 price target, down from $250.
Here is what Carillon Tower Advisers has to say about Global Payments Inc. in its Q2 2021 investor letter:
“Global Payments is a payments technology company delivering innovative payments and software solutions that allow customers to operate their businesses more efficiently. Investors have been disappointed at the pace of the revenue acceleration given the uneven nature of the reopening globally. The U.S. is doing well with issues, but Europe and Asia remain in various stages of reopening and lockdowns and thus, spending has been curtailed. However, we believe that the U.S. is leading the way and as vaccines are rolled out worldwide, Global Payments stands to benefit in the second half of this year and into 2022.”
7. Darling Ingredients Inc. (NYSE:DAR)
Parsifal Capital Management’s Stake Value: $79,150,000
Percentage of Parsifal Capital Management’s 13F Portfolio: 6.46%
Number of Hedge Fund Holders: 41
Darling Ingredients Inc. (NYSE:DAR) is a food processing company that is engaged in creating sustainable ingredients from edible and non-edible bionutrients, for customers in the pet food, fuel, bioenergy, and fertilizer sectors. Darling Ingredients Inc. (NYSE:DAR)’s main premise is to utilize natural resources so a growing population can benefit from sustainable food, energy, and fuel products. Darling Ingredients Inc. (NYSE:DAR) is one of the top stock picks of David Zorub’s Parsifal Capital Management.
David Zorub owns 1.17 million shares in Darling Ingredients Inc. (NYSE:DAR), amounting to $79.15 million, representing 6.46% of Zorub’s portfolio for the second quarter.
Fisher Asset Management is the leading stakeholder in Darling Ingredients Inc. (NYSE:DAR) as of Q2, with 1.62 billion shares worth over $116.9 million. Overall, 41 hedge funds reported owning stakes in Darling Ingredients Inc. (NYSE:DAR) at the end of June.
6. Fidelity National Financial, Inc. (NYSE:FNF)
Parsifal Capital Management’s Stake Value: $85,100,000
Percentage of Parsifal Capital Management’s 13F Portfolio: 6.94%
Number of Hedge Fund Holders: 34
Fidelity National Financial, Inc. (NYSE:FNF) works in collaboration with the real estate and mortgage industries, specializing in title insurance, settlement services, and closing and escrow services. Fidelity National Financial, Inc. (NYSE:FNF) also assists residential and commercial customers with various legal and financial claims. It is one of the top stock picks of David Zorub.
Zorub’s Parsifal Capital Management holds an $85.1 million stake in Fidelity National Financial, Inc. (NYSE:FNF) as of the end of June, which represents 6.94% of the firm’s 13F portfolio.
The Q3 EPS for Fidelity National Financial, Inc. (NYSE:FNF) came in at $2.12 on November 2, beating estimates by $0.48. The revenue at $3.89 billion also exceeded estimated revenue by $705.11 million.
Fidelity National Financial, Inc. (NYSE:FNF) announced on November 2 that it would raise the quarterly dividend by 10% to $0.44 per share, payable to stakeholders on record as of December 17 on December 31.
Fidelity National Financial, Inc. (NYSE:FNF) is a notable stock in David Zorub’s Q2 portfolio, just like Bath & Body Works, Inc. (NYSE:BBWI), Hilton Grand Vacations Inc. (NYSE:HGV), Global Payments Inc. (NYSE:GPN), and Tower Semiconductor Ltd. (NASDAQ:TSEM).
Here is what Merion Road Capital Management has to say about Fidelity National Financial, Inc. (NYSE:FNF) in their Q1 2021 investor letter:
“During the period I added to our position in Fidelity National Financial (“FNF”). FNF is the nation’s largest title insurer with 33% market share. It was built over the last 30 years by Bill Foley, who revolutionized the industry with his emphasis on eliminating bureaucracy, utilizing technology to streamline operations, and maximizing customer service. He is well-regarded as a savvy investor and consummate deal-maker having acquired and divested multiple entities both in title and ancillary fields. He continues to serve as the chairman of FNF with a personal stake in the company worth hundreds of millions.
While title insurance is technically insurance, it is a bit of a unique animal. Being that the insurer writes a policy based on past events, not unknowns in the future, losses are relatively small and predictable. The more data an insurer can analyze, the less likely they are to experience a claim; and the more efficiently they can analyze the data and process the application, the lower their costs will be. FNF has invested in automating its work stream through their ownership of NextAce (automated search), SoftPro (document production and closing), and multiple other cloud-based platforms. Due to these investments, FNF boasts industry leading margins and is able to attract more third party agents who can leverage their service offering…” (Click here to see the full text)
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Disclosure: None. David Zorub’s Parsifal Capital Management’s Top 10 Stocks is originally published on Insider Monkey.
