In this article, we discuss Ricky Sandler’s Eminence Capital’s top 10 stocks. If you want to skip our detailed analysis of Sandler’s history, investment philosophy, and hedge fund performance, go directly to Ricky Sandler’s Eminence Capital’s Top 5 Stocks.
Ricky Sandler founded Eminence Capital in 1999, and he serves as the CEO, chief investment officer, and portfolio manager at the global investment management organization. Ricky Sandler completed his Bachelor’s in Accounting and Finance from the University of Wisconsin and started his investing career in 1991 at Mark Asset Management, where he was a research analyst for numerous companies and industries. Then, Ricky Sandler moved on as the co-founder and co-general partner of Fusion Capital Management, LLC. After that, he established Eminence Capital, which has a portfolio worth over $8.12 billion as of the end of the second quarter.
Sandler’s 13F portfolio comprises stocks from information technology, materials, finance, healthcare, consumer discretionary, and communications sectors, with a top ten holdings concentration of 32.72%. According to the Q2 13F filings, the New York-based fund made new purchases in 16 stocks, bought additional stakes in 22, reduced holdings in 32 stocks, and sold 13 equities during the second quarter of 2021. Eminence Capital manages about $3.6 billion in a long/short equity strategy and approximately $4.2 billion in a long equity strategy. The largest holding in Sandler’s portfolio is Ashland Global Holdings Inc. (NYSE:ASH), with the hedge fund owning more than 4 million shares worth over $353 million.
The most notable stocks in Ricky Sandler’s Eminence Capital’s Q2 portfolio include Alphabet Inc. (NASDAQ:GOOG), Uber Technologies, Inc. (NYSE:UBER), Amazon.com, Inc. (NASDAQ:AMZN), and salesforce.com, inc. (NYSE:CRM), among others discussed in detail below. These stocks are also immensely popular with the hedge funds.
Ricky Sandler of Eminence Capital
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Our Methodology
Let’s take a look at Ricky Sandler’s Eminence Capital’s top 10 stocks. We compiled this list using Eminence Capital’s Q2 portfolio. The stocks are ranked according to the value of each holding in Sandler’s investment portfolio.
Ricky Sandler’s Eminence Capital’s Top Stocks
10. Morgan Stanley (NYSE:MS)
Eminence Capital’s Stake Value: $215,533,000
Percentage of Eminence Capital’s 13F Portfolio: 2.65%
Number of Hedge Fund Holders: 69
Morgan Stanley (NYSE:MS) is an investment bank and financial services company based in New York. The American multinational is engaged in wealth management, sustainable investing, sales and commodities tradition, and prime brokerage. Morgan Stanley (NYSE:MS) is one of the top stocks in Ricky Sandler’s Q2 portfolio.
Sandler’s Eminence Capital owns 2.35 million shares in Morgan Stanley (NYSE:MS), that are worth approximately $215.53 million, representing 2.65% of Sandler’s Q2 portfolio.
At the end of June, Fisher Asset Management was the largest stakeholder in Morgan Stanley (NYSE:MS), with 9.97 million shares worth $970.55 million. The stock is popular among the smart money, with 69 hedge funds owning stakes valued at $5.34 billion in Morgan Stanley (NYSE:MS) at the end of Q2.
On October 14, Morgan Stanley (NYSE:MS) announced earnings for the third quarter. The EPS was $2.04, beating estimated earnings per share by $0.36. Similarly, the revenue also exceeded expectations at $14.75 billion by $799.47 million.
Citi analyst Keith Horowitz kept a Neutral rating on Morgan Stanley (NYSE:MS), raising the price target from $100 to $105 on October 18. Horowitz stated that the Q3 performance was strong, but the stock’s valuation wasn’t up to the mark despite the satisfactory quarterly earnings results.
Like Alphabet Inc. (NASDAQ:GOOG), Uber Technologies, Inc. (NYSE:UBER), Amazon.com, Inc. (NASDAQ:AMZN), and salesforce.com, inc. (NYSE:CRM), Morgan Stanley (NYSE:MS) is a notable stock in Eminence Capital’s Q2 portfolio.
Here is what ClearBridge Investments has to say about Morgan Stanley (NYSE:MS) in its Q2 2021 investor letter:
“The Strategy also benefited from strong showings from financials holdings such as recent addition Morgan Stanley, a leading bank holding company offering a variety of financial services worldwide, and one of the largest broker-dealers, investment banks and wealth managers in the U.S. Morgan Stanley has been a leader in helping direct capital to address global sustainability challenges. Its sustainability efforts include capital markets actions such as issuing green bonds and it was early in its support for sustainability in investing and its concern for the environment. Morgan Stanley reported a great quarter with record revenues and strength across the businesses as it works to integrate and find synergies with recent acquisition E*TRADE. Following stress tests for banks, Morgan Stanley increased its dividend and share repurchase plan more than expected.”
9. Uber Technologies, Inc. (NYSE:UBER)
Eminence Capital’s Stake Value: $216,980,000
Percentage of Eminence Capital’s 13F Portfolio: 2.66%
Number of Hedge Fund Holders: 135
Uber Technologies, Inc. (NYSE:UBER) is a transportation service that has made private transport quite convenient across the globe, in about 900 large cities. On October 24, Uber Technologies, Inc. (NYSE:UBER) announced a deal with Tesla, Inc. (NASDAQ:TSLA), where up to 50,000 of Tesla, Inc. (NASDAQ:TSLA)’s EVs would be accessible to drivers via Uber Technologies, Inc. (NYSE:UBER) by 2023, which will lay the foundation for Tesla, Inc. (NASDAQ:TSLA)’s promised robotaxi network.
Eminence Capital owns 4.32 million shares in Uber Technologies, Inc. (NYSE:UBER), worth $216.98 million, making up 2.66% of Sandler’s 13F portfolio.
At the end of the second quarter, 135 hedge funds in Insider Monkey’s database were long Uber Technologies, Inc. (NYSE:UBER), up from 130 in Q1.
On October 17, Mark Mahaney from Evercore ISI added Uber Technologies, Inc. (NYSE:UBER) to the firm’s “Tactical Outperform List”. He kept an Outperform rating on the stock, with a $70 price target. According to Mahaney, Uber Technologies, Inc. (NYSE:UBER) has an attractive valuation at current share levels.
ClearBridge Investments mentioned Uber Technologies, Inc. (NYSE:UBER) in its Q2 2021 investor letter. Here is what they said:
“The pandemic has also brought attention to the question of gig worker employment status for companies, including ClearBridge holdings Uber and Lyft. In the U.K., Uber proactively classified its drivers as “workers” ahead of final rulings from the British court system. The worker status in the U.K. is a designation between self-employed and employed status that entitles drivers to minimum wage, holiday pay and in some cases a pension.
ClearBridge has engaged with Uber on labor issues since its IPO, and we have given feedback over that time to the CEO, CFO, Chief Legal Officer and Investor Relations on labor relations as well as strategy and communications. Uber’s agreement on this designation is ahead of other competitors in the market and the legal mandate represents a step forward in the company’s thinking about labor. The agreement represents a short-term hit to earnings, yet in some ways it places Uber ahead of the market in its ability to balance labor and shareholder interests. Workers benefit from improved conditions, with new contributions amounting to roughly 3% of a driver’s earnings, while Uber establishes more certainty on costs and visibility into its regulatory environment and operation conditions in the future.”
8. Amazon.com, Inc. (NASDAQ:AMZN)
Eminence Capital’s Stake Value: $219,682,000
Percentage of Eminence Capital’s 13F Portfolio: 2.70%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is an American tech multinational offering expertise in e-commerce, cloud computing, digital streaming, and artificial intelligence. The CFO at Amazon.com, Inc. (NASDAQ:AMZN), Brian Olsavsky, stated that the e-commerce giant has expanded considerably during the COVID-19 pandemic, to meet the overwhelming demand volume. Amazon.com, Inc. (NASDAQ:AMZN)’s plans for future expansion and profitability include capitalizing on advertising and growing the Amazon Prime membership.
Eminence Capital owns 63,858 shares in Amazon.com, Inc. (NASDAQ:AMZN), worth $219.68 million, making up 2.70% of the firm’s Q2 portfolio.
At the end of June, 271 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), up from 243 in the previous quarter.
On October 28, Amazon.com, Inc. (NASDAQ:AMZN) announced earnings for Q3. The EPS was $6.12, missing analysts’ consensus estimates of $8.92. Amazon.com, Inc. (NASDAQ:AMZN)’s revenue for Q3 was $110.81 billion, whereas estimated revenue was $111.6 billion.
RBC Capital analyst Brad Erickson lowered the price target for Amazon.com, Inc. (NASDAQ:AMZN) from $4,150 to $4,000 on October 26, keeping an Outperform rating on the tech stock. He stated that the Q3 earnings were lower than expected, and the company is facing high labor costs and supply chain problems. However, the outlook for Amazon.com, Inc. (NASDAQ:AMZN) is positive, owing to strong AWS performance, and profits from advertising.
Here is what Polen Capital has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
7. Expedia Group, Inc. (NASDAQ:EXPE)
Eminence Capital’s Stake Value: $222,273,000
Percentage of Eminence Capital’s 13F Portfolio: 2.73%
Number of Hedge Fund Holders: 87
Expedia Group, Inc. (NASDAQ:EXPE) is a travel company, which leverages technology to aggregate fares for users via its travel websites and metasearch engines, like expedia.com and hotels.com. Expedia Group, Inc. (NASDAQ:EXPE) has a rich portfolio of travel destinations, leisure activities, cruises, and airlines in its vacation packages, and connects travelers from around the world to relevant global brands, in order to give them a smooth travel experience. It is one of the top stocks in Ricky Sandler’s Q2 portfolio.
Eminence Capital owns 1.35 million shares in Expedia Group, Inc. (NASDAQ:EXPE), amounting to $222.27 million, representing 2.73% of Sandler’s 13F portfolio.
At the end of Q2, 87 hedge funds reported owning stakes in Expedia Group, Inc. (NASDAQ:EXPE), up from 86 in the first quarter.
Here is what ClearBridge Investments has to say about Expedia Inc. in its Q1 2021 investor letter:
“Several of our better performers in the first quarter were purchased while their business models were under stress from COVID restrictions or the macro environment the pandemic created. What gave us confidence in purchasing Expedia were the actions the company took to extend out their balance sheets until travel resumed. It should benefit as a broader vaccination rollout prompts cruise lines to resume operations and consumers to start traveling again and are positioned to deliver better margins and gain pricing power as the economy normalizes due to the cost controls implemented during the downturn.”
6. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Eminence Capital’s Stake Value: $244,533,000
Percentage of Eminence Capital’s 13F Portfolio: 3.00%
Number of Hedge Fund Holders: 52
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is a prominent REIT that was created after the merger between WillScot and Mobile Mini. Independently, these companies were doing well, but together, the synergy made WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) a leading American REIT. The asset portfolio includes 360,000 storage rental units located in 276 cities in the US, Canada, Mexico, and the UK. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is one of the top stocks in Ricky Sandler’s Q2 portfolio.
Eminence Capital owns 8.77 million shares in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), with a total value of $244.53 million, representing 3% of the firm’s Q2 portfolio.
By the end of the second quarter, 52 hedge funds owned stakes in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) worth $1.39 billion, up from 47 in the previous quarter, with stakes valued at $1.27 billion.
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is a top stock in Eminence Capital’s Q2 portfolio, just like Alphabet Inc. (NASDAQ:GOOG), Uber Technologies, Inc. (NYSE:UBER), Amazon.com, Inc. (NASDAQ:AMZN), and salesforce.com, inc. (NYSE:CRM).
Bernzott Capital Advisors mentioned WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) in its Q4 2020 investor letter. Here is what they said:
“Willscot Mobile Mini Holdings (WSC): Reported solid financial results highlighted by rate increases in its modular segment and good cash flow. The merger of WillScot and Mobile Mini was completed in 3Q. The two business models are both based on strong recurring revenues from long duration leases and similar asset characteristics, such as long lives, low maintenance, high margin, short payback periods and strong cash flow generation. By combining the fleets, totaling over 365,000 units, the offering becomes more strategic and valuable to customers, and the diversification of the portfolio improves. The company is off to a good start following the merger.”
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Disclosure: None. Ricky Sandler’s Eminence Capital’s Top 10 Stocks is originally published on Insider Monkey.
