In this article, we discuss Michael Weisberg’s Crestwood Capital Management’s top 10 stocks. To skip our detailed analysis of Michael Weisberg’s history, investment philosophy, and hedge fund performance, go directly to Michael Weisberg’s Crestwood Capital Management’s Top 5 Stocks.
Michael Weisberg is the senior managing director at Crestwood Capital Management, a New York-based investment firm, with over $257 million in managed securities, and more than $436 million in assets under management as of the 13F filings at the end of June this year. Weisberg has been with Crestwood Capital Management since 2009 and has ownership stakes in the firm.
Crestwood Capital Management is a long/short equity hedge fund, with stocks concentrated in the information technology, finance, industrials, consumer discretionary, healthcare, and communications sectors. The top ten stocks comprise 65.98% of Weisberg’s portfolio for the second quarter, with the largest holding being ICICI Bank Limited (NYSE:IBN), which accounts for 8.31% of the firm’s investment portfolio.
As of June this year, Crestwood Capital Management’s top buys were Analog Devices, Inc. (NYSE:ADI), DocuSign, Inc. (NASDAQ:DOCU), and Spotify Technology S.A. (NYSE:SPOT). Whereas, Weisberg’s investment firm reduced holdings in The New York Times Company (NYSE:NYT), ANSYS, Inc. (NASDAQ:ANSS), and Shopify Inc. (NYSE:SHOP).
The most notable stocks in Weisberg’s Q2 portfolio include Meta Platforms, Inc. (NASDAQ:FB), DocuSign, Inc. (NASDAQ:DOCU), Dollar General Corporation (NYSE:DG), and Spotify Technology S.A. (NYSE:SPOT).
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Our Methodology
Let’s take a look at Michael Weisberg’s Crestwood Capital Management’s top 10 stock picks. The stocks are ranked according to the value of each holding in Weisberg’s Q2 portfolio.
Why should we pay attention to Michael Weisberg’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Michael Weisberg’s Crestwood Capital Management’s Top Stocks
10. Ferrari N.V. (NYSE:RACE)
Crestwood Capital Management’s Stake Value: $12,286,000
Percentage of Crestwood Capital Management’s 13F Portfolio: 4.76%
Number of Hedge Fund Holders: 27
Ferrari N.V. (NYSE:RACE) is an Italian manufacturer of luxury cars, which is known for its sleek vehicles and the continued association with Formula One sports car racing. Ferrari N.V. (NYSE:RACE), one of the top stocks of Crestwood Capital Management, is recognized for its supercars, including the 288 GTO, Enzo Ferrari, LaFerrari, and the F8 Spider. Crestwood Capital Management owns 59,628 shares in Ferrari N.V. (NYSE:RACE), worth $12.28 million, representing 4.76% of the firm’s portfolio at the end of June.
Ferrari N.V. (NYSE:RACE) announced earnings for Q3 on November 2, and the EPS for the quarter came in at $1.29, beating estimates by $0.13. Ferrari N.V. (NYSE:RACE)’s actual revenue was $1.22 billion, missing estimates by -$29.76 million.
RBC Capital analyst Tom Narayan on November 5 raised the price target on Ferrari N.V. (NYSE:RACE) to €260 from €202, keeping an Outperform rating on the stock.
As of the second quarter of 2021, 27 hedge funds reported owning stakes in Ferrari N.V. (NYSE:RACE), up from 26 in the previous quarter.
Here is what Ensemble Capital has to say about Ferrari N.V. (NYSE:RACE) in its Q2 2021 investor letter:
“Ferrari: After posting standout performance in 2020, beating the S&P 500 by over 20%, Ferrari’s share price performance has lagged for much of this year. The main issue this quarter was the company pushing out their medium-term financial targets due to development and production delays caused by COVID, but this only led to a 1% decline in the stock price for the full quarter. While we believe the company did a fantastic job maintaining production in light of COVID, it did not surprise us that some of their longer-term, new model introductions might be delayed by a couple of quarters. While disappointing of course, Ferrari is curating a set of extremely exclusive mechanical works of art and we are much happier seeing them take the time to do things right, rather than rushing to meet a self-imposed financial target.”
9. Huazhu Group Limited (NASDAQ:HTHT)
Crestwood Capital Management’s Stake Value: $15,113,000
Percentage of Crestwood Capital Management’s 13F Portfolio: 5.86%
Number of Hedge Fund Holders: 27
Huazhu Group Limited (NASDAQ:HTHT), one of Michael Weisberg’s top stocks as of June this year, is a Chinese hotel management company headquartered in Shanghai. Crestwood Capital Management owns 286,172 shares in Huazhu Group Limited (NASDAQ:HTHT), valued at $15.11 million, representing 5.86% of the firm’s Q2 portfolio. As of 2020, the multi-brand hotel chain manages and owns 6187 hotels, including franchised outlets. Huazhu Group Limited (NASDAQ:HTHT)’s portfolio contains 20 distinct hotel brands as of June 2021.
Huazhu Group Limited (NASDAQ:HTHT) announced on October 27 that while business had started picking up after initial lockdowns imposed due to the COVID-19 pandemic were lifted, the Delta variant caused the hospitality industry in China to suffer tremendously yet again. As of the third quarter of 2021, the occupancy rate in Huazhu Group Limited (NASDAQ:HTHT)’s hotels reached 49%, and the revenue per available room (RevPAR) was approximately 65% of the 2019 occupancy levels.
As of the second quarter of 2021, 27 hedge funds tracked by Insider Monkey’s database of elite funds were long Huazhu Group Limited (NASDAQ:HTHT).
In addition to Meta Platforms, Inc. (NASDAQ:FB), DocuSign, Inc. (NASDAQ:DOCU), Dollar General Corporation (NYSE:DG), and Spotify Technology S.A. (NYSE:SPOT), Huazhu Group Limited (NASDAQ:HTHT) is a notable stock in Weisberg’s Q2 portfolio.
8. Five Below, Inc. (NASDAQ:FIVE)
Crestwood Capital Management’s Stake Value: $15,547,000
Percentage of Crestwood Capital Management’s 13F Portfolio: 6.02%
Number of Hedge Fund Holders: 42
Five Below, Inc. (NASDAQ:FIVE) is a chain of American specialty discount stores, selling products priced up to $5, as the name suggests, with a small variety of goods ranging from $6 to $10. With more than 1,000 outlets across the United States, the target audience of Five Below, Inc. (NASDAQ:FIVE) includes teenagers and tweens. Five Below, Inc. (NASDAQ:FIVE) is a top stock pick of Crestwood Capital Management, with the firm owning 80,443 shares in Five Below, Inc. (NASDAQ:FIVE), worth $15.5 million, representing 6.02% of their investment portfolio as of June this year.
As of the second quarter of 2021, 42 hedge funds were bullish on Five Below, Inc. (NASDAQ:FIVE), down from 43 in the previous quarter.
Morgan Stanley analyst Simeon Gutman, on October 7, upgraded Five Below, Inc. (NASDAQ:FIVE) from Equal Weight to Overweight, with a $230 price target. Gutman believed that the concerns about freight and inventory are blown out of proportion, and Five Below, Inc. (NASDAQ:FIVE) is handling inventory, freight, and financial management quite well.
Here is what Harding Loevner has to say about Five Below, Inc. (NASDAQ:FIVE) in their Q4 2020 investor letter:
“Throughout the year, we tried methodically to rebalance the portfolio between “stay at home” and “return to normal” whenever the market appeared too pessimistic or optimistic about the sustainability of recent, pandemic-driven trends. As the year went on, we found ourselves tilting more towards “return to normal.” We established a new position in US retailer Five Below, a discount chain built around a rather simple concept: fill nondescript big-box locations with as many as possible items priced under US$5 that can tickle the imagination of an American teen or tween. As “pre-2020” as that may sound, we were impressed by the company’s quick resumption of strong same-store sales growth after the lockdowns early in the year. Clearly, Five Below offers a value and entertainment proposition that e-commerce is not able to satisfy and which we can see ourselves “sitting” on potentially for years to come.”
7. Synopsys, Inc. (NASDAQ:SNPS)
Crestwood Capital Management’s Stake Value: $15,724,000
Percentage of Crestwood Capital Management’s 13F Portfolio: 6.09%
Number of Hedge Fund Holders: N/A
Synopsys, Inc. (NASDAQ:SNPS), a top stock pick of Michael Weisberg as of the second quarter, is an American software company that is engaged in chip design, verification, IP integration, software security, and quality testing to create smart and cutting-edge solutions like self-driving cars and machines that are capable of learning. Weisberg, via Crestwood Capital Management, owns 57,015 shares in Synopsys, Inc. (NASDAQ:SNPS), worth $15.72 million, representing 6.09% of the firm’s Q2 portfolio.
Needham analyst Charles Shi, on October 19, initiated coverage of Synopsys, Inc. (NASDAQ:SNPS) with a $360 price target and a Buy rating.
Synopsys, Inc. (NASDAQ:SNPS) acquired Concertio, as reported on November 2, which is a company specializing in performance optimization software that is facilitated by artificial intelligence. This acquisition will benefit Synopsys, Inc. (NASDAQ:SNPS)’s SiliconMAX Silicon Lifecycle Management Platform, which helps with in-chip observability, analytics and integrated automation.
In addition to Meta Platforms, Inc. (NASDAQ:FB), DocuSign, Inc. (NASDAQ:DOCU), Dollar General Corporation (NYSE:DG), and Spotify Technology S.A. (NYSE:SPOT), Synopsys, Inc. (NASDAQ:SNPS) is a notable stock in Weisberg’s Q2 portfolio.
6. Carvana Co. (NYSE:CVNA)
Crestwood Capital Management’s Stake Value: $16,770,000
Percentage of Crestwood Capital Management’s 13F Portfolio: 6.50%
Number of Hedge Fund Holders: 63
Carvana Co. (NYSE:CVNA) is an e-commerce platform that sells used cars online, connecting buyers with sellers, and is often described as the “Amazon of Auto”. Michael Weisberg’s Crestwood Capital Management owns 55,564 shares in Carvana Co. (NYSE:CVNA), valued at $16.77 million, representing 6.50% of the firm’s portfolio at the end of June this year.
Carvana Co. (NYSE:CVNA) reported earnings for the third quarter on November 4. The Q3 EPS came in at -$0.38, missing estimates by -$0.11. Carvana Co. (NYSE:CVNA)’s revenue, however, beat estimates at $3.48 billion by $219.76 million.
Needham analyst Chris Pierce on November 5 kept a Buy rating on Carvana Co. (NYSE:CVNA), but lowered the price target from $421 to $378 after the Q3 earnings missed estimates. The analyst also expects increased expenses while Carvana Co. (NYSE:CVNA) tries to meet demand, but Pierce remains optimistic on the stock.
As of the end of June, 63 hedge funds tracked by Insider Monkey were long Carvana Co. (NYSE:CVNA), down from 64 in Q1.
Here is what Steel City Capital has to say about Carvana Co. (NYSE:CVNA) in their Q1 2021 investor letter:
“Carvana’s (CVNA) 4Q’20 results weren’t particularly great. EBITDA was negative ($70) million, a stark turnaround on a sequential basis from a first-ever EBITDA profit of $21 million in 3Q’20. The culprit was a steep drop off in retail unit GPU ($1,265 vs. $1,857) and wholesale unit GPU ($358 vs. $1,113) as some of the COVID-driven aberrations in the used car market began to abate.
The company’s presentation of EBITDA (calculated “bottom up”) is dubious, as it commingles non-operating items including mark-to-market changes in its retained securitization portfolio. With the exception of 1Q’20, when ABS markets were going haywire, this line item provided a tailwind throughout 2020, including a gain of $5 million in 4Q’20. Also on the non-operating self-help front, management released a reserve for vehicle service contract cancellations in 4Q’20, adding another $7 million to EBITDA, and boosting “Other” GPU by $96…” (Click here to see the full text)
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Disclosure: None. Michael Weisberg’s Crestwood Capital Management’s Top 10 Stocks is originally published by Insider Monkey.
