In this article, we discuss the 5 stocks to consider in the portfolio of Mark Cuban. If you want to read our detailed analysis of Mark Cuban’s history investment philosophy, and hedge fund performance, go directly to Mark Cuban Stock Portfolio: 10 Stocks To Consider.
5. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: N/A
Robinhood Markets, Inc. (NASDAQ:HOOD) went public in late July in one of the most anticipated IPOs of the year, fetching a valuation of more than $31 billion. The firm, which owns and operates a financial services platform, has exploded into the mainstream as an equity trading hub of retail investors. Mizuho analyst Dan Dolev has a Buy rating on the stock with a price target of $68.
Cuban has been a long-time backer of cryptocurrencies and has publicly admitted that he owns Dogecoin, a cryptocurrency that started out as a joke but has since ballooned to $33 billion in value. Dogecoin made up 34% of crypto revenue for Robinhood Markets, Inc. (NASDAQ:HOOD) in the first quarter of 2021.
Cuban had earlier taken Robinhood Markets, Inc. (NASDAQ:HOOD) to task over a policy restricting user trading on the platform using Dogecoin. In response, Robinhood CEO Vlad Tenev said the platform would make crypto deposits and withdrawals easier.
4. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 18
Despite being one of the most volatile stocks on the market in the past few months, GameStop Corp. (NYSE:GME) has a year-to-date return of over 880%. The company has emerged more or less unscathed from multiple short-selling attempts this year. The firm recently announced that it would be hiring 500 people at a new customer care center in Florida that would be operational by the end of the year.
In February, Cuban said that WallStreetBets, one of the most influential platforms on Reddit, was changing how the market functioned, advising users on the platform to hold onto GameStop Corp. (NYSE:GME) shares to benefit the firm in the long term.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE:GME) with 2.7 million shares worth more than $595 million.
In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE:GME) was one of them. Here is what the fund said:
“The first quarter saw some bizarre market reactions. Game Stop is a heavily shorted legacy video game retailer that saw its stock price rise from $17 to a peak of $483 within a month. It appears that retail investors on a Reddit.com forum called WallStreetBets used memes to create a viral feedback loop of forced buying. Game Stop reached $20 billion in market cap and had more daily trading volume than Apple at one point. The Game Stop short squeeze became a black swan event for the short sellers. Large hedge funds such as Melvin Capital suffered 50% losses during a short period and required emergency capital injections that resulted in costly dilution. Shorting is difficult and introduces a risk of ruin. This is especially true in situations where a large percentage of the float is shorted. We want to remind you that we hedge our portfolio via index puts, sector puts, and sometimes buying puts directly in our own portfolio companies. However, we rarely short because 1) we are not good at it 2) the potential for brain damage is too high and 3) we want to avoid the risk of ruin.”
3. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 20
BlackBerry Limited (NYSE:BB) is another stock that rose to prominence due to the Reddit crowd. The shares have returned more than 122% to investors over the past twelve months. Hefty volume has pushed the stock to new highs this month, resulting in a 15% increase in share price, the most in almost two months. Last month, the firm beat market estimates on earnings per share and revenue for the second quarter.
Cuban had admitted earlier this year that his son was trading in BlackBerry Limited (NYSE:BB) stock after gathering information about the stock market from social media platforms like TikTok and Reddit, noting that these platforms were helping young people trade better.
Among the hedge funds being tracked by Insider Monkey, Canada-based investment firm Fairfax Financial Holdings is a leading shareholder in BlackBerry Limited (NYSE:BB) with 46 million shares worth more than $570 million.
2. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 21
AMC Entertainment Holdings, Inc. (NYSE:AMC) is a Kansas-based movie theatre chain. The company has a market cap of more than $20 billion and posted $1.2 billion in revenue last year, down from $5.7 billion in 2019. The dramatic drop was due largely to the closing of theatres around the world as a COVID-19 precaution. The rise of the streaming industry has hit the business of the firm hard and most analysts are not constructive on the stock.
However, as retail investors buy up AMC Entertainment Holdings, Inc. (NYSE:AMC) stock to spoil short-selling attempts of hedge funds – Cuban says his son also invested in the company – the firm has had a new lease of life, investing in several new endeavors designed to bring back cinema audiences.
At the end of the second quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $404 million in AMC Entertainment Holdings, Inc. (NYSE:AMC), up from 19 in the preceding quarter worth $34 million.
In its Q4 2020 investor letter, Mittleman Investment Management LLC, an asset management firm, highlighted a few stocks and AMC Entertainment Holdings, Inc. (NYSE:AMC) was one of them. Here is what the fund said:
“AMC Entertainment (AMC) was our only material loser in Q4, dropping from $4.71 to $2.12 (-55%). I planned on discussing here why it was worth at least the $10 per share that my recently reduced estimate of fair value claimed, but since then AMC raised more cash against their UK holdings and then the stock took off due to speculative players from reddit.com getting involved, so we sold it all around $14 during the last week of Jan. 2021. This was a modest profit for most clients, but a loss for some others, depending on when the account began, so check your statements to see where you came out. And yes, I recognize it as being a dose of good luck, which I heartily accept from the universe as it seemed somewhat lacking in the portfolio of late. After the sale of AMC in late January 2021, our exposure to the movie theater business is now exclusively in Canada via Cineplex, which has a 75% market share and much less leverage on its balance sheet.”
1. Fidelity National Financial, Inc. (NYSE:FNF)
Number of Hedge Fund Holders: 34
Earlier this month, Barclays analyst Mark DeVries raised the price target on Fidelity National Financial, Inc. (NYSE:FNF) stock to $63 from $58, keeping an Overweight rating and noting the firm was “well positioned” to offset falling refinance demand. The firm recently announced that it had purchased a 30% stake in Freedom Equity Group, a financial services firm. Fidelity had earlier beat market expectations on earnings per share and revenue in the second quarter.
As Mark Cuban touts the benefits of blockchain technology, several large banks like Fidelity National Financial, Inc. (NYSE:FNF) have started dealing in cryptocurrencies to keep with the times. Cuban believes this will help smoothen crypto prices in the long term.
Among the hedge funds being tracked by Insider Monkey, Houston-based investment firm Windacre Partnership is a leading shareholder in Fidelity National Financial, Inc. (NYSE:FNF) with 10.8 million shares worth more than $470 million.
In its Q1 2021 investor letter, Merion Road Capital Management, an asset management firm, highlighted a few stocks and Fidelity National Financial, Inc. (NYSE:FNF) was one of them. Here is what the fund said:
“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)
You can also take a peek at 10 Russell 2000 Basic Materials Dividend Stocks to Buy and 10 Utilities Stocks with Over 3% Dividend Yield.
