In this article, we discuss the 10 biggest small-cap stocks in the Ken Fisher portfolio. If you want to see more stocks in this selection, check out Ken Fisher Super Stocks: 5 Biggest Small-Cap Stocks.
US stocks have been beaten down by inflation recently. Jim Paulsen, chief investment strategist at The Leuthold Group, noted that although no one knows if the bear market is coming to an end or if it is yet to bottom, the “bad news” is now impacting the stock market far lower as compared to the first half of 2022. Paulsen observed that cyclical sectors and small-cap stocks have outperformed the S&P 500 in recent months.
In the long-term, the higher risk associated with investing in small-caps has led to higher returns. Yale professor Roger Ibbotson and financial consultancy Duff & Phelps estimate that between 1926 and 2020, small-cap stocks returned 11.9% on an annual basis, exceeding the 10.3% returns of large-cap stocks.
Ken Fisher’s Fisher Asset Management managed $133.40 billion in client money during the third quarter of 2022. Some of the biggest holdings in the Ken Fisher portfolio include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN). However, in this article, we focus on the biggest small-cap stocks of Ken Fisher.
Our Methodology
We selected the top 10 small-cap stocks from the Ken Fisher portfolio as of the end of the third quarter of 2022 for this analysis. The stocks are arranged according to the hedge fund’s stake value in each holding. Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022 was used to assess the hedge fund sentiment around the securities.
Ken Fisher Super Stocks: Biggest Small-Cap Stocks
10. Helen of Troy Limited (NASDAQ:HELE)
Number of Hedge Fund Holders: 20
Fisher Asset Management’s Stake Value: $46,266,000
Helen of Troy Limited (NASDAQ:HELE) is a Texas-based company that sells consumer products in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through three segments – Home & Outdoor, Health & Wellness, and Beauty. Helen of Troy Limited (NASDAQ:HELE) is one of the top small-cap stocks in the Ken Fisher portfolio. Fisher boosted his stake in Helen of Troy Limited (NASDAQ:HELE) by 16% in the third quarter of 2022, holding 479,739 shares worth $46.2 million.
On October 5, Helen of Troy Limited (NASDAQ:HELE) reported a Q2 non-GAAP EPS of $2.27 and a revenue of $521.4 million, topping Wall Street consensus by $0.06 and $2.33 million, respectively. The revenue gained 9.7% year-over-year.
CL King analyst Steven Marotta told investors on October 5 that Helen of Troy Limited (NASDAQ:HELE)’s Q2 was broadly in line with Street estimates, but the outlook for FY23 has been impacted given the negative patterns in consumer behavior and wholesale channel pace-of-orders.
According to Insider Monkey’s data, 20 hedge funds were long Helen of Troy Limited (NASDAQ:HELE) at the end of Q2 2022, compared to 16 funds in the preceding quarter. Amy Minella’s Cardinal Capital is a prominent stakeholder of the company, with 190,752 shares worth about $31 million.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Helen of Troy Limited (NASDAQ:HELE) is backed by Ken Fisher.
Wedgewood Partners made the following comment about Helen of Troy Limited (NASDAQ:HELE) in its Q3 2022 investor letter:
“Helen of Troy Limited (NASDAQ:HELE) was a detractor in the quarter as the Company continues to deal with a variety of headwinds. The Company’s healthcare and housewares businesses were major beneficiaries during the pandemic, and both we and the Company have been expecting a normalization of demand in this business. Further, the post-pandemic normalization of demand patterns at major customers such as Walmart, Target, and Amazon have further weighed on the Company – both in terms of fundamentals and in terms of market sentiment, plus stock valuation. Finally, decades-high inflation in key consumer staples categories such as food and other necessities has diverted some spending away from the more discretionary product categories supplied by Helen of Troy. Despite all these headwinds, the Company has been able to hold on to most of the business that it gained during the Pandemic. Revenues in the most recent quarter were +26% above the same quarter two years ago, and we find the stock’s valuation to be extremely attractive at the moment, at levels last seen in the 2008- 2009 recession period, when the Company was under former (and, in our opinion, inept) management.”
9. Blueprint Medicines Corporation (NASDAQ:BPMC)
Number of Hedge Fund Holders: 26
Fisher Asset Management’s Stake Value: $47,872,000
Blueprint Medicines Corporation (NASDAQ:BPMC) is a Massachusetts-based precision therapy company that manufactures and commercializes medicines for genomically defined cancers and blood disorders in the United States and internationally. Ken Fisher, as of Q3 2022, strengthened his hold on Blueprint Medicines Corporation (NASDAQ:BPMC) by 28%. The billionaire owns 725,537 shares of the company worth $47.8 million.
On November 3, Blueprint Medicines Corporation (NASDAQ:BPMC) reported a Q3 GAAP loss per share of $2.23 and a revenue of $65.97 million, outperforming Wall Street consensus by $0.28 and $22.09 million, respectively. The revenue over the period climbed 172.7% year-over-year. Blueprint Medicines Corporation (NASDAQ:BPMC) expects that it will achieve the high end of its earlier revenue guidance for full-year 2022 of approximately $180 million to $200 million, versus a consensus of $192.24 million.
Jefferies analyst Eun Yang on November 2 maintained a Buy recommendation on Blueprint Medicines Corporation (NASDAQ:BPMC) but trimmed the firm’s price target on the shares to $80 from $84. Though an Ayvakit sales miss in Q3 was expected, the FY22 sales guidance cut “signals its opportunity in ASM may be peaking,” the analyst told investors.
According to Insider Monkey’s data, 26 hedge funds were bullish on Blueprint Medicines Corporation (NASDAQ:BPMC) at the end of June 2022, compared to 29 funds in the prior quarter. Eric Bannasch’s Cadian Capital held the leading stake in the company, comprising 2.02 million shares worth $102 million.
8. Artisan Partners Asset Management Inc. (NYSE:APAM)
Number of Hedge Fund Holders: 12
Fisher Asset Management’s Stake Value: $49,137,000
Artisan Partners Asset Management Inc. (NYSE:APAM) is a Wisconsin-based publicly owned investment manager. It provides its services to pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, and mutual funds. Ken Fisher’s Fisher Asset Management raised its stake in Artisan Partners Asset Management Inc. (NYSE:APAM) by 4% in Q3 2022, holding 1.82 million shares worth $49 million.
On November 1, Artisan Partners Asset Management Inc. (NYSE:APAM) declared a $0.06 per share quarterly dividend, in line with previous. The dividend is payable on November 30, to shareholders of record on November 16. The company announced on November 9 that its preliminary assets under management were $125.3 billion as of October 31, 2022.
Credit Suisse analyst Bill Katz on October 18 initiated coverage of Artisan Partners Asset Management Inc. (NYSE:APAM) with a Neutral rating and a $25 price target. While encouraged by incremental moves by management to build out “Gen III and IV” AUM mandates, he sees a mixed relative performance in the intermediate-term, the analyst told investors.
According to Insider Monkey’s data, 12 hedge funds were long Artisan Partners Asset Management Inc. (NYSE:APAM) at the end of Q2 2022, compared to 17 funds in the preceding quarter. Chuck Royce’s Royce & Associates is a significant position holder in the company, with 894,818 shares worth $31.8 million.
7. Revolve Group, Inc. (NYSE:RVLV)
Number of Hedge Fund Holders: 20
Fisher Asset Management’s Stake Value: $56,973,000
Revolve Group, Inc. (NYSE:RVLV) is a California-based online fashion retailer in the United States and internationally. The company operates through two segments – REVOLVE and FWRD. Revolve Group, Inc. (NYSE:RVLV) is one of the premier small-cap stocks in Ken Fisher’s portfolio. The billionaire lifted his stake in the company by 18% in Q3 2022, holding 2.6 million shares worth approximately $57 million, representing 0.04% of the total portfolio.
On November 2, Revolve Group, Inc. (NYSE:RVLV) announced a Q3 GAAP EPS of $0.16, beating market estimates by $0.09. The revenue of $268.71 million also climbed 10.1% year-over-year, topping analysts’ forecasts by $11 million. Active customers increased by 84,000 during the third quarter of 2022, reaching 2,249,000 at the end of September, representing a gain of 34% year-over-year.
Needham analyst Anna Andreeva on November 3 reiterated a Buy rating on Revolve Group, Inc. (NYSE:RVLV) but slashed the price target on the shares to $30 from $40. The company posted a “solid” Q3 with inventory reduction coming in ahead of estimates and more controlled expenses, though its quarter-to-date trends have slowed, the analyst wrote in a research note.
According to Insider Monkey’s Q2 data, 20 hedge funds were long Revolve Group, Inc. (NYSE:RVLV), compared to 23 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent position holder in the company, with 1.86 million shares worth $48.2 million.
Here is what Madison Funds specifically said about Revolve Group, Inc. (NYSE:RVLV) in its Q2 2022 investor letter:
“The selloff that began with ultra-high growth, high valuation technology stocks extended into nearly all sectors as recessionary fears pressured all stocks – especially consumer discretionary stocks, which arguably represent one of the most cyclical sectors of the economy. Even though we were, and continue to be significantly underweight these stocks, our investments here hurt our performance the most as individual stocks like Revolve Group, Inc. (NYSE:RVLV) were heavily punished. Ironically, RVLV delivered strong results and a better-than-expected outlook during the quarter, but the market, always a forward-looking mechanism, believes that substantial weakness is coming. We continue to believe that even in a recessionary scenario the stock has been overly punished and the long-term outlook for this unique business model remains as robust as ever.”
6. Hub Group, Inc. (NASDAQ:HUBG)
Number of Hedge Fund Holders: 18
Fisher Asset Management’s Stake Value: $59,051,000
Hub Group, Inc. (NASDAQ:HUBG) is an Illinois-based company that provides supply chain solutions such as transportation and logistics management services in North America. Ken Fisher, as of the third quarter of 2022, owns 856,063 shares of Hub Group, Inc. (NASDAQ:HUBG) worth $59 million, representing 0.04% of the total 13F portfolio.
On October 11, Barclays analyst Brandon Oglenski maintained an Equal Weight rating on Hub Group, Inc. (NASDAQ:HUBG) but trimmed the price target on the shares to $75 from $82. Trucking rates could decline to low double digits in 2023, which would potentially challenge transport pricing outcomes across other modes, the analyst told investors in a research note.
According to Insider Monkey’s data, 18 hedge funds were bullish on Hub Group, Inc. (NASDAQ:HUBG) at the end of the second quarter of 2022, compared to 23 funds in the prior quarter. Israel Englander’s Millennium Management held a prominent stake in the company, with 804,593 shares worth $57 million.
In addition to Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Hub Group, Inc. (NASDAQ:HUBG) is one of the top stock picks of Ken Fisher.
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Disclosure: None. Ken Fisher Super Stocks: 10 Biggest Small-Cap Stocks is originally published on Insider Monkey.
