In this article, we discuss the 3 stocks to consider in the latest portfolio of John Hickenlooper. If you want to read our detailed analysis of these stocks, go directly to John Hickenlooper Latest Portfolio: Stocks to Watch.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 242
A Periodic Transaction Report dated December 10 shows that Hickenlooper sold off his stake in Amazon.com, Inc. (NASDAQ:AMZN) on October 29 last year. The transaction in this regard was worth between $250,000 and $500,000. Amazon.com, Inc. (NASDAQ:AMZN) owns and runs the biggest eCommerce platform in the world. It also has interests in web services, health, food, publishing, space, and other businesses. Amazon.com, Inc. (NASDAQ:AMZN) stock has been hit in recent months after missing market estimates on earnings.
However, hedge funds have continued to back Amazon.com, Inc. (NASDAQ:AMZN) despite this short-term lull in performance. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) with 3.9 million shares worth more than $12.8 billion.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon (AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon, we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …” (read the entire letter here)
2. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 248
Meta Platforms, Inc. (NASDAQ:FB), formerly known as Facebook, rebranded itself last year as it aimed to transition away from the social media business to the metaverse. Hedge funds have given the company their thumbs up in this regard albeit with some exceptions. At the end of the third quarter of 2021, 248 hedge funds in the database of Insider Monkey held stakes worth $38 billion in Meta Platforms, Inc. (NASDAQ:FB), down from 266 in the preceding quarter worth $42 billion.
Latest data shows that Hickenlooper sold off his stake in Meta Platforms, Inc. (NASDAQ:FB), worth $250,00 and $500,000, on October 27. The transaction was disclosed by the lawmaker in the report filed on December 10.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Mandatory filings reveal that Hickenlooper sold off his stake in Microsoft Corporation (NASDAQ:MSFT) in early November last year. This stake was worth between $250,000 and $500,000. Microsoft Corporation (NASDAQ:MSFT) is a technology firm with core interests in the software business.
Microsoft Corporation (NASDAQ:MSFT) stock has been a hedge fund favorite for years as well. Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT) with 25 million shares worth more than $7 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
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