In this article, we discuss the top 10 stocks in Glen Kacher’s Light Street Capital’s portfolio.
Light Street Capital is a Palo Alto-based investment management firm, that primarily invests in public companies from the technology and media sectors. Its founder and portfolio manager, Glen Kacher, holds a B.S in Commerce with Distinction from the University of Virginia’s McIntire School of Commerce, and an M.B.A from Stanford University’s Graduate School of Business. Prior to founding Light Street Capital in 2010, Glen Kacher worked at Integral Capital Partners as a managing director, where he was in charge of both public and private investments in the technology sectors, with a focus on Internet, security and software markets. Before he joined Integral Capital Partners, Glen Kacher was employed at Julian Robertson‘s Tiger Management as a full-time research analyst, and later as a part-time consultant at the firm, where he focused on investments in the software, hardware, and networking industries.
Managing more than $2.3 billion in its investment portfolio, Light Street Capital’s portfolio is branched out into seven sectors, of which the technology sector is the largest, making up 35.5% of the total value. The majority of the companies that the fund has invested in are large-cap stocks. Companies with a market cap above $10 billion represent 55% of the fund’s total portfolio value.
In its latest 13F filing, Light Street Capital disclosed significant stakes in companies like Sea Limited (NYSE:SE), Zoom Video Communications, Inc. (NASDAQ:ZM), and Pinterest, Inc. (NYSE:PINS). Of these companies, Sea Limited (NYSE:SE) represents the largest holding as well as one of the oldest positions in the fund’s equity portfolio. Light Street is long Sea Limited since the beginning of 2019 and currently owns a $147.38 million stake in the company. In addition, the investor has been bullish on Pinterest, Inc. (NYSE:PINS) since the second quarter of 2019.
Glen Kacher of Light Street Capital
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With this background in mind, let us now look towards the top 10 stocks in Light Street Capital’s portfolio. We analyzed Light Street Capital’s 13F portfolio for the second quarter of 2021 for our list, ranking the stocks based on the value of stakes that the fund holds.
Light Street Capital Portfolio: Top 10 Stocks
10. Pinterest, Inc. (NYSE:PINS)
Light Street Capital’s Stake Value: $65.27 million
Percentage of Light Street Capital’s 13F Portfolio: 2.83%
Total Number of Hedge Fund Holders: 63
Pinterest Inc. is a social media company that provides image-sharing services. Shares of the company rose 6.5% on November 4, as increased demand from large retail advertisers and growth in its international business boosted third-quarter revenue by 43%.
Based on the second quarter 13F filing, Glen Kacher’s hedge fund holds 826,721 shares of Pinterest, Inc., worth $65.2 million. These shares represent 2.83% of his fund’s investment portfolio. Overall, at the end of June, 63 hedge funds out of the 873 tracked by Insider Monkey held stakes in Pinterest, Inc. worth roughly $2.9 billion. This is compared to 83 hedge funds in the previous quarter with a total stake value of approximately $4.18 billion.
On November 1, BofA analyst Justin Post reinstated coverage of Pinterest, Inc. with a Neutral rating and a $57 price target on its shares.
Carillon Tower Advisers, in its third-quarter investor letter, mentioned Pinterest, Inc. and discussed its stance on the firm:
“Pinterest operates a pinboard-style social media website that enables users to create theme-based image collections for events, hobbies, and other personal interests. Despite a quarterly report that displayed solid revenue and profitability versus expectations, the stock was pressured as user engagement metrics decreased as the world reopened post-pandemic. We believe the company can continue to drive growth in the face of this headwind by increasing the number of advertisers, adding engaging video content, and ramping ecommerce capabilities.”
9. Doximity, Inc. (NYSE:DOCS)
Light Street Capital’s Stake Value: $66.12 million
Percentage of Light Street Capital’s 13F Portfolio: 2.86%
Total Number of Hedge Fund Holders: 35
Doximity, Inc. (NYSE:DOCS) is a California-based online networking service for medical professionals. Launched in 2010, the platform offers its members curated medical news, telehealth tools, and case collaboration.
On November 11, Piper Sandler analyst Sean Wieland raised the price target on Doximity, Inc. to $81 from $68, and kept an Overweight rating on the shares following what he calls a “robust’ fiscal second quarter results.
Light Street Capital initiated a stake in Doximity, Inc. during the second quarter and disclosed ownership of 1.13 million shares worth more than $66.1 million.
Of the 873 funds tracked by Insider Monkey, 35 were long Doximity, Inc. at the end of June. Alex Sacerdote of Whale Rock Capital Management is one of the top shareholders of the company.
In its second-quarter investor letter of ClearBridge Investments, the fund mentioned Doximity, Inc., saying that:
“We participated in the IPO of Doximity, a cloud-based telehealth and digital information platform for physicians. The company’s registered physicians use the platform to manage their practices, share and access information and provide feedback to health systems. In turn, Doximity’s 600+ subscription customers (pharmaceutical companies and health systems) market to an extremely pre-qualified and engaged physician base.”
8. Confluent, Inc. (NASDAQ:CFLT)
Light Street Capital’s Stake Value: $66.23 million
Percentage of Light Street Capital’s 13F Portfolio: 2.87%
Total Number of Hedge Fund Holders: 30
Next in line among Light Street Capital’s top 10 stocks is Confluent, Inc. (NASDAQ:CFLT). The company provides a stream data platform for their clients in various industries, including retail, logistics and manufacturing . It allows companies access to data as real-time streams.
Glen Kacher’s fund has over 1.39 million shares in Confluent, Inc. as of the end of June. According to our database, 30 hedge funds reported holding stakes in Confluent, Inc. (NASDAQ:CELT) as of the end of the second quarter.
Among the hedge funds tracked by Insider Monkey, Connecticut-based firm Lone Pine Capital is the top shareholder of Confluent, Inc. with 3.6 million shares worth more than $172 million.
On November 9, Deutsche Bank analyst Patrick Colville raised his price target on Confluent, Inc. to $84 from $42, and kept a Hold rating on the shares of the company.
In its second-quarter investor letter, the aforementioned ClearBridge Investments also highlighted Confluent, Inc. (NASDAQ:CFLT). Here is what the fund said:
“The new issue market remains an attractive source of new ideas and we participated in four IPOs in the latest period. Confluent sells and distributes a commercialized version of open source software called Kafka created by former executives at LinkedIn. The solution allows enterprise users the ability to capture data in real time as it is streaming. A prime use case is capturing real-time inventory across retail stores and distribution centers to enable omni-channel commerce. We believe it is early days in the company’s commercialization of this technology which can capture data in both on-premise and hybrid cloud environments. Global-e Online, meanwhile, removes many of the frictions around cross-border ecommerce by handling the different tax structures, languages, currencies, local logistics and fulfillment/returns for any size retailer. The company’s initial customers have been mostly mid to higher end retailers but an investment by Shopify should enable Global-e to significantly increase merchant reach.”
7. AppLovin Corporation (NASDAQ:APP)
Light Street Capital’s Stake Value: $66.47 million
Percentage of Light Street Capital’s 13F Portfolio: 2.88%
Total Number of Hedge Fund Holders: 16
During the second quarter, Light Street Capital added a new stake in AppLovin Corporation (NASDAQ:APP), a California-based mobile technology company that provides marketing and advertisement platforms for developers. The most notable of these analytic and advertisement platforms include MAX, AppDiscovery, and SparkLabs. As of the end of June, the fund owns 884,205 shares of the company.
On October 26, BTIG analyst Clark Lampen initiated coverage of AppLovin Corporation with a Buy rating and $114 price target.
During the second quarter 0f 2021, 16 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in AppLovin Corporation worth $987 million. Among these funds, New York-based Southpoint Capital Advisors is the largest shareholder of AppLovin Corporation in Q2, with shares worth $263 million.
6. Futu Holdings Limited (NASDAQ:FUTU)
Light Street Capital’s Stake Value: $69.41 million
Percentage of Light Street Capital’s 13F Portfolio: 3.01%
Total Number of Hedge Fund Holders: 31
Another addition to Light Street Capital’s 13F portfolio is Futu Holdings Limited (NASDAQ:FUTU), a Hong Kong-based holding company that is involved in digitized brokerage and provides a wealth management platform in multiple countries. Shares of the company are up by 14.34% year-to-date.
On October 19, CLSA analyst Ethan Wang initiated coverage of Futu Holdings Limited with a ‘Buy’ rating and $110 price target.
According to its second-quarter 13F filing, Glen Kacher’s Light Street Capital holds 387,557 shares of Futu Holdings Limited. Overall, 31 funds were bullish on Futu Holdings Limited by the end of the June quarter, compared to 26 in the previous quarter.
Among the hedge funds tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder of Futu Holdings Limited with 3.4 million shares worth more than $621 million as of the end of June.
5. Etsy, Inc. (NASDAQ:ETSY)
Light Street Capital’s Stake Value: $74.54 million
Percentage of Light Street Capital’s 13F Portfolio: 3.23%
Number of Hedge Fund Holders: 47
Etsy, Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect people and buyers, and sellers around the world with a focus on handmade or vintage items and craft supplies.
According to Light Street Capital’s 13F filing for the second quarter, the investment firm owns 362,130 shares in Etsy, Inc.. As of the end of the second quarter, 47 hedge funds tracked by Insider Monkey reported owning stakes in Etsy, Inc.. The total worth of these stakes is $1.73 billion. This is compared to 53 funds bullish on the company in the previous quarter, with a total worth of $1.64 billion.
On October 25, Wedbush analyst Ygal Arounian raised the price target on Etsy, Inc. to $264 from $195, and kept an Outperform rating on the shares of the company.
Out of the hedge funds being tracked by Insider Monkey, Jim Simons’ Renaissance Technologies is the top shareholder of Etsy, Inc., with over 1.76 million shares, worth more than $362.9 million.
In its first-quarter investor letter, Polen Capital mentioned Etsy, Inc.:
“Etsy continued to be a top contributor in the Portfolio during the first quarter. Etsy experienced record levels of demand in 2020. Throughout the beginning of this year, the business has continued to see accelerated growth trends. The company’s recently announced fourth-quarter results provided numerous data points that highlight Etsy’s success in both broadening and deepening the relationship it has with buyers and sellers on its platform. In fact, Etsy now stands as the fourth largest e-commerce site in the U.S. Repeat buyers have grown nearly 100% year-over-year, despite mask sales, which grew rapidly at the onset of the pandemic, shrinking to less than 5% of sales.
4. Elastic N.V. (NYSE:ESTC)
Light Street Capital’s Stake Value: $75.62 million
Percentage of Light Street Capital’s 13F Portfolio: 3.28%
Number of Hedge Fund Holders: 55
Founded in the Netherlands, Elastic N.V. (NYSE:ESTC) is a California-headquartered search company that specializes in self-managed and SaaS services for search, logging, security, observability, and analytics.
As of the end of June, Glen Kacher’s Light Street Capital holds 518,797 shares of Elastic N.V., worth more than $75.6 million
On September 17, Barclays analyst Raimo Lenschow raised his price target on Elastic N.V. to $200 from $185, and kept an Overweight rating on the shares of the company.
Daniel Gibson of Sylebra Capital Management is one of the biggest stakeholders of Elastic N.V. as of the end of the second quarter, according to the data tracked by Insider Monkey. Overall, 55 funds were bullish on Elastic N.V. at the end of the June, compared to 52 a quarter earlier
Greenhaven Road Capital, in its third-quarter investor letter, highlighted Elastic N.V. (NYSE:ESTC):
“Elastic Software (ESTC) – Share prices are up more than threefold since our first purchases of Elastic Software. The company continues to report best-in-class net revenue retention (amount generated from existing customers) of 130%. With recent acquisitions, they are continuing their expansion into security. This is the company with the highest product velocity and largest addressable markets in our portfolio. With a massive base of customers using freemium/opensource products, there are fertile hunting grounds for growth.”
3. Zoom Video Communications, Inc. (NASDAQ:ZM)
Light Street Capital’s Stake Value: $86.06 million
Percentage of Light Street Capital’s 13F Portfolio: 3.73%
Number of Hedge Fund Holders: 59
Next in line among Light Street Capital’s top 5 picks is Zoom Video Communications, Inc. is a communications technology company based in California. The company provides a videotelephony platform and online chat services that are used for teleconferencing, telecommuting, and social interactions.
Light Street Capital currently holds 222,350 shares of Zoom Video Communications, Inc., up by 318% over the quarter.
Of the 873 funds tracked by Insider Monkey, 59 were long Zoom Video Communications, Inc. at the end of June, up from 54 in the first quarter of 2021.
On October 22, JPMorgan analyst Sterling Auty upgraded Zoom Video Communications, Inc. to Overweight from Neutral with an unchanged price target of $385.
In its investor letter for the first quarter of 2021, Artisan Partners, an asset management firm, highlighted a few stocks and Zoom Video Communications, Inc. was one of them:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
2. Peloton Interactive, Inc. (NASDAQ:PTON)
Light Street Capital’s Stake Value: $119.84 million
Percentage of Light Street Capital’s 13F Portfolio: 5.19%
Number of Hedge Fund Holders: 67
In Peloton Interactive, Inc. (NASDAQ:PTON), Glen Kacher’s fund owns 966,254 shares as of the end of June, up by 44% on the quarter. Peloton is a New York-based exercise equipment company that sells athleisure and various exercise-related accessories via their application and website.
At the end of the second quarter of 2021, 67 hedge funds held stakes in Peloton Interactive, Inc., worth $6.12 billion in aggregate. This represents a significant increase from 64 funds that held $3.96 billion worth of shares a quarter earlier. The increase is due to a number of funds boosting their positions in the company between April and June. For example, Brad Gerstner‘s Altimeter Capital Management, raised its investment by more than 500% to 5.20 million shares and Philippe Laffont‘s Coatue Management tripled its investment to 4.73 million shares.
Peloton Interactive, Inc. was one of the companies mentioned in the second-quarter investor letter of Carillon Tower Advisers,
Here is what the fund had to say:
“Peloton Interactive operates a connected fitness platform offering live and on-demand classes allowing users to exercise at home. The firm’s shares were pressured in the quarter after Peloton announced a voluntary recall for both its legacy treadmill (Peloton Tread+) and its newly-launched base model treadmill (Peloton Tread). The issue surrounding the latter is somewhat troubling, as it appears it may be the result of an engineering flaw. This new treadmill offering was expected to be a key growth driver in the second half of 2021, and this development reduces our confidence in Peloton’s product pipeline. Therefore, we sold the stock.”
1. Sea Limited (NYSE:SE)
Light Street Capital’s Stake Value: $147.38 million
Percentage of Light Street Capital’s 13F Portfolio: 6.39%
Number of Hedge Fund Holders: 104
The largest position in Light Street Capital’s 13F portfolio is represented by Sea Limited is a Singapore-based consumer technology company that operates in the digital entertainment, e-commerce, and financial services industries. The company’s share price surged by 78% so far this year on account of its expansion into the gaming market. As of the end of June, Light Street holds 536,707 shares of Sea Limited worth $147.38 million. During the second quarter, the fund added 30,907 shares to the position.
At the beginning of November, Barclays analyst Jiong Shao initiated coverage of Sea Limited with an Overweight rating and $427 price target.
Overall. there were 104 funds in our database that held stakes worth $12.2 billion in Sea Limited, up from 98 funds and $10.4 billion, respectively, a quarter earlier.
In its second-quarter investor letter, Tao Value mentioned Sea Limited:
“Sea continued to execute above expectation. The gaming business continued strong momentum, recording bookings of $1.1 billion, growing 117% y-o-y. The major franchise Free Fire showed no sign of slowing down in established ASEAN & LatAm market and received positive reception from new markets
like US. On e-commerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now top downloaded e-commerce app in Brazil, almost 2x of the second-place local leader Mercado Libre (MELI). I also see the most promising development is in its FinTech business – SeaMoney, which more than doubled its revenue in Q1 2021 from the previous quarter! With online lending products rolling out, SeaMoney is poised to grow rapidly, becoming the 3rd growth curve for Sea.”
You can also take a peek at the 10 Penny Stocks Redditors are Buying in August and 10 Best Small-Cap Stocks to Buy According to Hedge Funds.
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This article is originally published at Insider Monkey.
