Echo Street Capital Management: Greg Poole’s Top 5 Stock Picks

1. Microsoft Corporation (NASDAQ:MSFT)

Echo Street Capital’s Stake Value: $543,852,000

Percentage of Echo Street Capital’s 13F Portfolio: 4.18%

Number of Hedge Fund Holders: 238

Microsoft Corporation (NASDAQ:MSFT) is the largest holding of Echo Street Capital Management, which makes it the top stock pick of Greg Poole at the end of June this year. 

Microsoft Corporation (NASDAQ:MSFT) announced Q3 earnings on October 26. The EPS for the quarter was $2.27, beating estimates by $0.19. The actual revenue for Microsoft Corporation (NASDAQ:MSFT) was $45.32 billion, also exceeding estimated revenue by $1.33 billion. 

Deutsche Bank analyst Brad Zelnick on November 1 initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with a Buy rating and a $390 price target. The analyst believes that Microsoft Corporation (NASDAQ:MSFT) is one of the strongest software stocks covered by Deutsche Bank, and will successfully seize the public cloud opportunity, which is estimated to be valued at $127 billion in 2021. 

Here is what Alger has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:

“Microsoft Corporation was among the top contributors to performance during the third quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 51% in the second quarter. This high unit volume growth is a primary driver of the company’s higher share price, but the company’s strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”

You can also take a look at Tech Stock Portfolio: 10 Tech Stock Picks from Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management and Top 10 Stocks to Buy According to Jeff Ubben’s ValueAct Capital.

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