Dorsal Capital Partners Sees a 13% Boost in 2023: Its Top 15 Stock Picks

Published on February 7, 2024 at 4:44 pm by Swati Goyal in Hedge Funds, Lists, News

In this article, we discuss Dorsal Capital Partners sees a 13% boost in 2023: its top 15 stock picks. If you want to skip about some more stocks in Dorsal Capital Partners’ portfolio, go directly to Dorsal Capital Partners Sees a 13% Boost in 2023: Its Top 5 Stock Picks.

Founded in 2009, Dorsal Capital Management is a long/short hedge fund seeking to produce risk-adjusted total returns uncorrelated to the broad stock indexes. The hedge fund whose main fund has never suffered a large annual loss is the brainchild of Ryan David Frick and Oliver Evans, two SAC Capital alums.

An MBA graduate from Stanford University, Frick boasts tremendous experience in the investment world and has served as a portfolio manager at CR Intrinsic Investors, an affiliate of SAC Capital, for four years. He also gained rich experience as an analyst at Credit Suisse First Boston. Having also doubled up as analyst covering media and internet segment at Kicap Management, he is currently the Managing Partner and Chief Investment Officer at Dorsal Capital Management.

Evans has been a retired partner since 2014 and currently manages direct public equity at the family offices of Apercus Holdings and Keystone LP. Having completed his MBA at the Harvard Business School in 2004, he also worked as an analyst at CR Intrinsic for two years before founding Dorsal Capital Management.

Dorsal Capital Management mostly invests in technology stocks that account for about a third of the total portfolio. It also boasts significant exposure in the services sector, with consumer goods holdings summing up the top three investment areas. However, the Redwood City, California-based hedge fund is not open to funds from outside investors.

As of the third quarter of 2023, Dorsal Capital Management had stakes in some of the biggest tech companies that fueled the bull run in 2023. The long-short hedge fund boasts of investments in Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) that posted triple and double-digit percentage gains in 2023. Likewise, the hedge fund finished 2023 on a high, up by about 13%.

The tech services and consumer-focused hedge fund manages about $2.92 billion while applying long- and short-term investment strategies. In addition, it considers itself an expert in managing pooled investment vehicles. Investments in tech stocks allow the hedge fund to gain exposure to some of the fastest growth areas at a time of artificial intelligence operations. Investments in consumer goods also offer exposure to inflation-immune segments.

While the hedge fund underperformed the S&P 500, which gained 24% in 2023, its returns showed a significant improvement from 2022. As the overall equity market came under pressure in 2022 amid a ferocious sell-off triggered by runaway inflation and a push by the US Federal Reserve to hike interest rates, Dorsal Capital Management narrowly escaped losses with a 0.9% decline. The 0.9% decline in 2022 was impressive considering that the S&P 500 was down by about 19% the same year.

Dorsal Capital Management’s impressive track record of returns dates back to 2018, when it delivered a gain of 2.18% compared to a loss of 4.38% for the S&P 500. The hedge fund continued the impressive run in 2019 as it delivered a half-year return of 7.4% through June 2019 with an annualized return of 7.5%. Even as the COVID-19 pandemic caused havoc in 2020, sending the markets into a tailspin, the hedge fund came on top, delivering 9.7% gains in the year’s first half. The impressive run would continue into 2021 as the hedge fund achieved a 4.1% return.

Investments in Salesforce, Inc. (NYSE:CRM), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) present massive opportunities as Dorsal Capital Management looks to profit from the explosive AI theme in 2024. In addition, the hedge fund’s significant exposure to technology stocks presents yet another massive opportunity as the Federal Reserve moves to tweak its monetary policy. The Fed cutting interest rates as expected is one of the catalysts expected to send most tech stocks higher, as has always been the case during periods of lower interest rates.

Our Methodology

Dorsal Capital Management is one of the few hedge funds that has navigated the equity market successfully, and never posted a large loss since inception. Its long-short investment strategy focusing on high-growth stocks in tech, consumer goods, and services sectors has proved to be a great success. After analyzing 13F filings, we have listed the hedge funds’ top stock picks. The stocks are ranked in ascending order based on the value of the hedge fund’s equity stakes. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

Dorsal Capital Partners Sees a 13% Boost in 2023: Its Top Stock Picks

15. EPAM Systems, Inc. (NYSE:EPAM)

Dorsal Capital Management’s Equity Stake: $83.10 Million

Number of Hedge Fund Holders: 34

EPAM Systems, Inc. (NYSE:EPAM) is one of Dorsal Capital Management’s top stock picks and one of the latest additions to the portfolio. The hedge fund acquired stakes worth $83.10 million in the information technology services company to gain exposure to digital platform engineering and software development services.

Dorsal Capital Management took advantage of a significant pullback to acquire stakes in EPAM Systems, Inc. (NYSE:EPAM) as it ended the year down by about 8%, underperforming the S&P 500, which was up by about 24%. According to Insider Monkey’s database data, 34 elite hedge funds held positions in EPAM Systems, Inc. (NYSE:EPAM) stock in the third quarter of 2023. Stephen Mandel’s Lone Pine Capital was one of the company’s significant shareholders in the third quarter of 2023, with shares worth $269.56 million.

Analysts at Morgan Stanley have downgraded EPAM Systems, Inc. (NYSE:EPAM) to Underweight from Equal Weight, citing pricing pressure and slower budget growth in a research note to the investors.

Here is what Baron Funds said about EPAM Systems, Inc. (NYSE:EPAM) in its second quarter 2023 investor letter:

“EPAM Systems, Inc. (NYSE:EPAM) provides outsourced software development to business customers. Shares declined 24.8% due to investor concerns over the negative potential impact of GenAI, slowing growth and a weaker financial outlook. Greater economic uncertainty is causing a pullback in customer demand as corporate clients temporarily focus on near-term cost optimization rather than more strategic digital transformation projects. Management reduced its full-year guidance twice during the quarter, which was highly unusual given the company’s strong execution track record. We believe this slowdown is temporary and continue to own the stock due to EPAM’s long runway for growth and strong technical capabilities.”

14. V.F. Corporation (NYSE:VFC)

Dorsal Capital Management’s Equity Stake: $91 Million

Number of Hedge Fund Holders: 24

V.F. Corporation (NYSE:VFC) was one of Dorsal Capital Management’s top stock picks as the hedge fund raced to a 13% gain in 2023. The consumer cyclical investment play in the design procurement marketing and distribution of lifestyle apparel footwear and other related products was down by 33% in 2023.

The long-short hedge fund took advantage of a steep pullback to bolster its stakes in V.F. Corporation (NYSE:VFC) in Q3 2023 by 61% to $91 million. According to Insider Monkey’s database data, 24 hedge funds held positions in V.F. Corporation (NYSE:VFC) in the third quarter of 2023, down from 26 in the previous quarter.

Joseph Sirdevan’s Galibier Capital Management is one of the significant shareholders of V.F. Corporation (NYSE:VFC), with shares worth $1.54 million.

13. Burlington Stores, Inc. (NYSE:BURL)

Dorsal Capital Management’s Equity Stake: $98.09 Million

Number of Hedge Fund Holders: 49

Burlington Stores, Inc. (NYSE:BURL) is one of Dorsal Capital’s top stock picks in the consumer cyclical sector. The company operates as a retailer of branded apparel products, providing fashion-focused merchandise, including women’s ready-to-wear apparel, menswear, and youth apparel.

Burlington Stores, Inc. (NYSE:BURL) is up by more than 60% since late October as it bounces back following the 2023 rout. The rally is supported by strong earnings and comparable store sales in the recent quarter. Dorsal Capital Management increased its stake in Burlington Stores, Inc. (NYSE:BURL) by 16% in Q3 2023 to $98.09 million.

At the end of the third quarter of 2023, 49 hedge funds in the database of Insider Monkey held stakes worth $1.29 billion in Burlington Stores, Inc. (NYSE:BURL), compared to 41 in the previous quarter worth $1.20 billion.

In its Q3 2023 investor letter, Argosy Investors shared its thoughts on Burlington Stores, Inc. (NYSE:BURL). Here is what it said:

“Burlington Stores, Inc. (NYSE:BURL) participates in the off-price retail category and competes against well-known players such as TJ Maxx and Ross Stores. BURL recently suffered from an inventory overhang that dented margins and is also suffering from a slowdown in same store sales. With that said, the company has capacity to double its stores, double its margins to levels consistent with peers, and expand same-store sales growth. On normalized margins, which the company last achieved in fiscal 2019, BURL is trading at ~10x earnings, with potential to grow to

12. Five Below, Inc. (NASDAQ:FIVE)

Dorsal Capital Management’s Equity Stake: $120.68 Million

Number of Hedge Fund Holders: 30

Five Below, Inc. (NASDAQ:FIVE) was one of the catalysts behind Dorsal Capital Management’s 13% return in 2023. The consumer cyclical investment plays operating as a specialty value retailer increased by 21% in 2023. The rally came as Five Below, Inc. (NASDAQ:FIVE) benefited from improved consumer spending on jewelry, hair, and accessories, among other personal living space products.

Dorsal Capital Management increased its stake in Five Below, Inc. (NASDAQ:FIVE) by 42% in Q3 2023 to $120.68 million. By the end of this year’s third quarter, 30 out of the 910 funds polled by Insider Monkey had held Five Below, Inc. (NASDAQ:FIVE)’s shares. Ryan Frick And Oliver Evans’s Dorsal Capital Management is the company’s largest stakeholder through its $120.68 million investment.

Here is what Wasatch Global Investors said about Five Below, Inc. (NASDAQ:FIVE) in its Q3 2023 investor letter:

“Another weak stock in the strategy was Five Below, Inc. (NASDAQ:FIVE). This discount retailer has set itself apart with its branding and unique approach of, as its name suggests, pricing most items at five dollars or less. Second-quarter revenues and earnings met expectations, and management projected that third- and fourth-quarter revenues would be in line with forecasts and better than industry peer comparisons. But the stock was down because upcoming quarterly margins and earnings are projected to decline due to theft and expenses associated with theft prevention. While this news was disappointing, we think management has responded appropriately. We still expect the company’s new-store growth rate to accelerate from the low teens to the high teens over the next 12 months. Five Below plans to add approximately 250 new locations, which we think will position the company to take advantage of both the 2023 and 2024 holiday shopping seasons.”

11. Smartsheet Inc. (NYSE:SMAR)

Dorsal Capital Management’s Equity Stake: $125.43 Million

Number of Hedge Fund Holders: 48

Bellevue, Washington-based Smartsheet Inc. (NYSE:SMAR) is a software application company that provides an enterprise platform to plan, capture, manage, automate, and report on work for teams and organizations. Smartsheet Inc. (NYSE:SMAR) offers Dashboards, Cardview, and Calendar, among other products, that allow customers to build user-friendly apps.

Smartsheet Inc. (NYSE:SMAR) was one of Dorsal Capital Management’s top stock picks, going by a 20% gain in 2023. The company’s upward momentum received a boost, announcing a significant milestone of reaching $1 billion in annualized recurring revenue in the fourth quarter.

Dorsal Capital Management has positioned itself to benefit from further upside action, having increased its stake in Smartsheet Inc. (NYSE:SMAR) by 73% in Q3 2023 to $133.13 million. According to Insider Monkey’s database data, 48 elite hedge funds held positions in Smartsheet Inc. (NYSE:SMAR) stock, up from 46 in the preceding quarter.

In its Q2 2023 investor letter, TimesSquare U.S. Small Cap Growth Strategy provided the following insight regarding Smartsheet Inc. (NYSE:SMAR):

“Smartsheet Inc. (NYSE:SMAR) provides a workflow and customer engagement platform for teams and organizations. Mixed fiscal first quarter results caused a -20% retreat to the share price. That included in line revenues and profits; however, billings fell short due to macro conditions impacting small-to-mid sized businesses and elongated sales cycles among larger enterprises.”

10. Mercadolibre, Inc. (NASDAQ:MELI)

Dorsal Capital Management’s Equity Stake: $133.13 Million

Number of Hedge Fund Holders: 76

Mercadolibre, Inc. (NASDAQ:MELI) is one of Dorsal Capital Management’s top stock picks that ensured the hedge fund bounced back to positive returns in 2023. The consumer goods company that operates online commerce platforms in Latin America was up by 84% in 2023, dwarfing the 24% gain for the S&P 500.

The Argentina-based e-commerce platform has emerged as a significant player in the sector, with operations in 19 countries. After a significant swing to the upside, Dorsal Capital Management used the opportunity to lock in some profits, having reduced its holdings in Mercadolibre, Inc. (NASDAQ:MELI) by 39% in Q3 2023 to $133.13 million.

According to Insider Monkey’s database data, 76 hedge funds held Mercadolibre, Inc. (NASDAQ:MELI) stock positions in the third quarter of 2023, compared to 77 in the previous quarter. Notably, ARK Investment Management emerged as one of the significant stakeholders in the company, with 36,129 shares valued at $56.78 million as of Q4 2023.

9. Walmart Inc. (NYSE:WMT)

Dorsal Capital Management’s Equity Stake: $143.94 Million

Number of Hedge Fund Holders: 80

Bentonville, Arkansas-based Walmart Inc. (NYSE:WMT) is one of the world’s largest retailers operating discount stores. The company operates supercenters, supermarkets, hypermarkets, and warehouse clubs selling various consumer products.

It was one of the retailers that benefited from a resilient economy and strong consumer spending power as the stock gained 11% in 2023.

For their Q3 2023 shareholdings, 80 of the 910 hedge funds profiled by Insider Monkey held a stake in Walmart Inc. (NYSE:WMT). ZWEIG DIMENNA PARTNERS was a remarkable shareholder of Walmart Inc. (NYSE:WMT) with stakes worth $12.93 million.

8. Zillow Group, Inc. (NASDAQ:Z)

Dorsal Capital Management’s Equity Stake: $152.33 Million

Number of Hedge Fund Holders: 52

Zillow Group, Inc. (NASDAQ:Z) is a communication services company that operates real estate brands on mobile applications and websites. It operates through internet media and technology, mortgages, and home segments.

Zillow Group, Inc. (NASDAQ:Z) remains one of Dorsal Capital Management’s top stock picks, going by the 78% gain that helped propel the hedge fund to a 13% return. Dorsal Capital Management increased its stake in Zillow Group, Inc. (NASDAQ:Z) by 117% in Q3 2023 to $152.33 million.

BofA Securities analyst Curtis Nagle has warned that uncertainties over lawsuits on the commissions paid out to real estate agents could pressure the real estate services company stocks in the coming months.

For their September quarter of 2023 shareholdings, 52 out of the 910 hedge funds part of Insider Monkey’s database were Zillow Group, Inc. (NASDAQ:Z) investors. Robert W. Koehn’s Ivy Lane Capital was a prominent shareholder of the company in the fourth quarter of 2023, with stakes worth $13.60 million.

7. Salesforce, Inc. (NYSE:CRM)

Dorsal Capital Management’s Equity Stake: $162.22 Million

Number of Hedge Fund Holders: 122

Salesforce, Inc. (NYSE:CRM) remains one of Dorsal Capital Management’s top stock picks for gaining exposure to the artificial intelligence frenzy. The company offers Customer Relationship Management technology and has seen its sentiments and fortunes improve by integrating AI into its various solutions and products.

Likewise, Salesforce, Inc. (NYSE:CRM) nearly doubled in value after rallying 96% in 2023 at the height of the AI hype. Dorsal Capital Management has benefited from the blockbuster rally, having increased its stakes in Salesforce, Inc. (NYSE:CRM) by 129% in Q3 2023 to $162.22 million.

According to Insider Monkey’s database data, 122 hedge funds held positions in Salesforce, Inc. (NYSE:CRM) stock in the third quarter of 2023. Notably, Fisher Asset Management emerged as a significant stakeholder in the company, with stakes valued at $3.93 billion.

Here is what Polen Capital, an investment management company, said about Salesforce, Inc. (NYSE:CRM) in its fourth quarter 2023 investor letter:

“In the fourth quarter, the top relative and absolute contributors to the Portfolio’s performance were Netflix, ServiceNow, and Salesforce, Inc. (NYSE:CRM).

Salesforce has continued to grow its revenues at what we see as a healthy rate despite market concerns about the impact of the weaker macroeconomy on its business and penetration rates in its core CRM offering. Even its most mature and largest offerings, Sales Cloud and Service Cloud, are still growing revenue at double-digit rates. In addition, management realized that their cost structure, especially in salespeople, had gotten too bloated. Over the past year and a half, the company has run a much more streamlined expense structure that has led to strong operating margin expansion and earnings growth. Importantly, we do not feel Salesforce has cut into its innovation or sales muscle through these cost cuts but has eliminated unnecessary excess fat from the organization.”

6. Activision Blizzard Inc. (NASDAQ:ATVI)

Dorsal Capital Management’s Equity Stake: $165.21 Million

Number of Hedge Fund Holders: 111

Activision Blizzard Inc. (NASDAQ:ATVI) is a leading publisher of video games best known for World of Warcraft, Call of Duty, Guitar Hero, and Tony Hawk. It was one of Dorsal Capital Management’s top stock picks for gaining exposure in the multi-billion gaming industry before Microsoft completed its acquisition late last year.

Dorsal Capital Management held stakes worth $165.21 million in Activision Blizzard Inc. (NASDAQ:ATVI) as of the end of Q3 2023, down by 35% from the previous quarter levels. According to Insider Monkey’s database data, 111 elite hedge funds held positions in Activision Blizzard (NASDAQ:ATVI) stock.

Click to continue reading and see Dorsal Capital Partners Sees a 13% Boost in 2023: Its Top 5 Stock Picks.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

The whispers are turning into roars.

Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 10,000% Return: This AI Stock is a Diamond in the Rough (But Our Help is Key!)

The AI revolution is upon us, and savvy investors stand to make a fortune.

But with so many choices, how do you find the hidden gem – the company poised for explosive growth?

That’s where our expertise comes in.

We’ve got the answer, but there’s a twist…

Imagine an AI company so groundbreaking, so far ahead of the curve, that even if its stock price quadrupled today, it would still be considered ridiculously cheap.

That’s the potential you’re looking at. This isn’t just about a decent return – we’re talking about a 10,000% gain over the next decade!

Our research team has identified a hidden gem – an AI company with cutting-edge technology, massive potential, and a current stock price that screams opportunity.

This company boasts the most advanced technology in the AI sector, putting them leagues ahead of competitors.

It’s like having a race car on a go-kart track.

They have a strong possibility of cornering entire markets, becoming the undisputed leader in their field.

Here’s the catch (it’s a good one): To uncover this sleeping giant, you’ll need our exclusive intel.

We want to make sure none of our valued readers miss out on this groundbreaking opportunity!

That’s why we’re slashing the price of our Premium Readership Newsletter by a whopping 70%.

For a ridiculously low price of just $29, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single restaurant meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee: If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $29.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

Subscribe Now!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a year later!

A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…

Insider Monkey Ads

Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Log In

Sign Up