In this article, we discuss the top 10 stock picks of Jack Ripsteen’s Potrero Capital Research. If you want to skip our detailed analysis of Jack Ripsteen’s history, investment philosophy, and hedge fund performance, go directly to the Top 5 Stock Picks of Jack Ripsteen’s Potrero Capital Research.
Jack Ripsteen founded Potrero Capital Research in 2003, and serves as the managing member at the California-based investment management firm. Before starting his own investment firm, Ripsteen was the senior vice president at Hambrecht & Quist, from 1998 to 2002. He also worked as a senior research analyst at JPMorgan Chase & Co. (NYSE:JPM). Ripsteen graduated from UCLA, and is on the Board of Trustees for the Head-Royce School.
The discretionary assets under management at Potrero Capital Research amount to roughly $429.1 million and the firm’s 13F investment portfolio is valued at $416.19 million. Potrero Capital Research has a well-defined investment approach.
Some of the most notable stocks in Ripsteen’s Q2 portfolio are Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:FB), and Twitter, Inc. (NYSE:TWTR), among others discussed in detail below. These stocks are highly sought after by hedge funds as well.
Why should we pay attention to hedge fund sentiment while choosing stocks? 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 S&P 500 ETF (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.
Our Methodology
With this context in mind, let’s discuss the top 10 stock picks of Jack Ripsteen’s Potrero Capital Research. We compiled this list using the Q2 portfolio of Potrero Capital Research, ranking each stock according to the value of the holding in the investment portfolio.
Top Stock Picks of Jack Ripsteen’s Potrero Capital Research
10. Visa Inc. (NYSE:V)
Stake Value of Potrero Capital Research: $11,865,000
Percentage of Potrero Capital’s 13F Portfolio: 2.85%
Number of Hedge Fund Holders: 162
A multinational financial services corporation from California, Visa Inc. (NYSE:V) is best known for allowing digital transfer of money via its credit cards, debit cards, and prepaid cards, on a global scale. The company also deals with expense management, intelligence solutions, and next generation commerce. Visa Inc. (NYSE:V) is one of the top stock picks of Jack Ripsteen’s Potrero Capital Research.
Potrero Capital Research owns 50,743 shares in Visa Inc. (NYSE:V), worth $11.86 million, making up 2.85% of the firm’s Q2 portfolio.
On October 26, Visa Inc. (NYSE:V) announced Q3 earnings. The EPS at $1.62 topped estimates by $0.08. The revenue also exceeded analysts’ expectations by $45.89 million at $6.56 billion.
Visa Inc. (NYSE:V) is extremely popular with the smart money. At the end of June, 162 hedge funds tracked by Insider Monkey were bullish on Visa Inc. (NYSE:V), down from 164 in the previous quarter.
Mizuho analyst Dan Dolev kept a Buy rating on Visa Inc. (NYSE:V), but lowered the price target from $275 to $255. He believes that higher incentive payments in FY22 will seriously impact the stock, and these incentive payments are unlikely to change the payment ecosystem.
Like Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:FB), and Twitter, Inc. (NYSE:TWTR), Visa Inc. (NYSE:V) is one of the top stocks in Ripsteen’s Q2 investment portfolio.
Here is what Polen Capital has to say about Visa Inc. (NYSE:V) in its Q3 2021 investor letter:
“Visa Inc. faced pressure as some believe these “old payment infrastructure” businesses will be disrupted by newer fintech companies using blockchain, buy now, pay later (BNPL), or other innovations to provide better/cheaper payment services. However, we believe that some of these technologies have meaningful limitations which could benefit existing payment networks. For example, BNPL transactions are often funded with cards and turn a one-time transaction into many smaller ones with more transaction fees for Visa. Just like with regulation, we continually monitor for competition and technological disruption. As of now, we do not see a significant risk in the foreseeable future to this company.”
9. Twitter, Inc. (NYSE:TWTR)
Stake Value of Potrero Capital Research: $12,535,000
Percentage of Potrero Capital’s 13F Portfolio: 3.01%
Number of Hedge Fund Holders: 89
Twitter, Inc. (NYSE:TWTR) is a social networking platform that is actively used by individuals around the world, including celebrities, to express their thoughts, share memes, connect with audiences, and network. Twitter, Inc. (NYSE:TWTR) has 396.5 million users as of the second quarter of 2021, 206 million of whom are active users, engaging on the platform every day. Twitter, Inc. (NYSE:TWTR) is one of the top stocks in Jack Ripsteen’s Q2 portfolio.
Potrero Capital Research owns 182,172 shares in Twitter, Inc. (NYSE:TWTR), valued at $12.53 million, representing 3.01% of the firm’s Q2 portfolio.
Twitter, Inc. (NYSE:TWTR) reported Q3 earnings on October 26, with the EPS missing estimates by -$0.72 at -$0.54. The actual revenue exceeded estimated revenue by $1.02 million at $1.08 billion.
On October 28, BMO Capital analyst Daniel Salmon kept a Market Perform rating on Twitter, Inc. (NYSE:TWTR), but lowered the price target from $70 to $65. Even though the brand exposure resulted in a less volatile performance in Q3, the expenses for 2021 were higher than expected, resulting in lower margins for Twitter, Inc. (NYSE:TWTR).
At the end of June, 89 hedge funds were bullish on Twitter, Inc. (NYSE:TWTR).
Here is what ClearBridge Investments has to say about Twitter, Inc. (NYSE:TWTR) in its Q2 2021 investor letter:
“Not every portfolio company will neatly fit into one of these four growth segments and some may move from one to another over time. Social media platform Twitter could be considered an improving growth story due to the initiatives put in place to grow and better monetize its user base. With the global return of live events and sports causing a rebound in advertising, combined with other new services beginning to thrive, this is a company with the fundamentals to be categorized as a disruptor.”
8. Talend S.A. (NASDAQ:TLND)
Stake Value of Potrero Capital Research: $13,225,000
Percentage of Potrero Capital’s 13F Portfolio: 3.17%
Number of Hedge Fund Holders: 36
Talend S.A. (NASDAQ:TLND) is a software company that specializes in pre-packaged software for businesses, big data, and cloud-based solutions. The top clients of Talend S.A. (NASDAQ:TLND) include L’Oréal S.A. (OTC:LRLCY), Domino’s Pizza, Inc. (NYSE:DPZ), Anheuser-Busch InBev SA/NV (NYSE:BUD), Toyota Motor Corporation (NYSE:TM), and Citigroup Inc. (NYSE:C), among others.
Jack Ripsteen owns 201,603 shares in Talend S.A. (NASDAQ:TLND), worth $13.22 million, making up 3.17% of his Q2 portfolio.
By the end of the second quarter, 36 hedge funds in Insider Monkey’s exclusive database reported owning stakes in Talend S.A. (NASDAQ:TLND), down from 45 in Q1.
Like Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:FB), and Twitter, Inc. (NYSE:TWTR), Talend S.A. (NASDAQ:TLND) is one of the notable stocks in Jack Ripsteen’s 13F portfolio.
7. Bally’s Corporation (NYSE:BALY)
Stake Value of Potrero Capital Research: $18,280,000
Percentage of Potrero Capital’s 13F Portfolio: 4.39%
Number of Hedge Fund Holders: 30
Bally’s Corporation (NYSE:BALY) is an American entertainment enterprise offering casinos, gambling, online sports betting, and iGaming experiences to customers. Bally’s Corporation (NYSE:BALY) owns 14 casinos in 10 states, a horse track in Colorado, and many digital platforms for sports betting and online gaming.
Jack Ripsteen’s stake in Bally’s Corporation (NYSE:BALY) as of Q2 is worth $18.28 million, which represents 4.39% of his 13F portfolio.
As of the end of the second quarter, 30 hedge funds monitored by Insider Monkey held stakes in Bally’s Corporation (NYSE:BALY), up from 18 in the previous quarter.
Goldman Sachs analyst Stephen Grambling on October 27 set a $52 price target on Bally’s Corporation (NYSE:BALY) with a Neutral rating. He believes that the stock has limited catalysts until digital assets are properly launched.
6. Meta Platforms, Inc. (NASDAQ:FB)
Stake Value of Potrero Capital Research: $18,852,000
Percentage of Potrero Capital’s 13F Portfolio: 4.52%
Number of Hedge Fund Holders: 266
Meta Platforms, Inc. (NASDAQ:FB), previously known as Facebook, is one of the top social networking sites that went through a major corporate rebranding in October 2021. The social media giant which owns popular networking platforms like Facebook, Instagram, and WhatsApp, has rebranded the parent company because Zuckerberg’s vision for the brand is to create a “metaverse”, which will include marvels of 3D virtual spaces and augmented reality, powered by the internet. Meta Platforms, Inc. (NASDAQ:FB) is one of the top stocks in the Q2 investment portfolio of Potrero Capital Research.
Ripsteen owns 54,218 shares in Meta Platforms, Inc. (NASDAQ:FB), which are valued at $18.85 million. The stock accounts for 4.52% of Ripsteen’s Q2 portfolio.
Meta Platforms, Inc. (NASDAQ:FB)’s Q3 EPS came in at $3.22, beating estimates by $0.04 as of October 25. The revenue missed analyst expectations by -$513.23 million at $29.01 billion.
Piper Sandler analyst Thomas Champion stated that the rebranding by Meta Platforms, Inc. (NASDAQ:FB) was an extremely risky and bold decision, representing the company’s commitment to the AR/VR vision for the future. While the analyst commends the bold move, on October 28, he kept a Neutral rating on Meta Platforms, Inc. (NASDAQ:FB) with a $385 price target.
Here is what Polen Capital has to say about Facebook, Inc. (NASDAQ:FB) in its Q3 2021 investor letter:
“Facebook’s stock was pressured on concerns about regulation in the quarter. We are constantly monitoring the potential regulatory risks to Facebook (and all of our holdings). At this point, we see very little chance that regulation changes Facebook’s business model in a meaningful and adverse way. Regarding the recent data shared by a former Facebook employee and the company itself on some of the unfortunate negative consequences of social media, we recognize these types of issues will inevitably linger in different forms and fashions well into the future. We have been focused on the ability of Facebook to identify and mitigate these negative consequences while amplifying the value users typically cite for its apps across a long list of use cases. We continuously monitor the vibrance of the user base on Facebook’s apps to confirm that value.”
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Disclosure: None. Top 10 Stock Picks of Jack Ripsteen’s Potrero Capital Research is originally published on Insider Monkey.
