In this article, we will take a detailed look at Top 10 Stocks to Buy According to Durable Capital Partners.
Durable Capital Partners is a Maryland-based hedge fund management firm founded in the second quarter of 2019 by Henry Ellenbogen. The firm primarily follows a long-term equity investment strategy, with a focus on early-stage and durable growth in small- and mid-cap equities across public markets. Ellenbogen, who serves as the Managing Partner and Chief Investment Officer, leads the firm’s investment approach.
Ellenbogen established Durable Capital Partners in 2019 and currently holds the roles of Managing Partner and Chief Investment Officer. Before founding Durable, he spent nearly two decades at T. Rowe Price Associates, Inc., where he served as Vice President and Chief Investment Officer for U.S. Equity Growth. During his tenure, he led the U.S. Small-Cap Growth Equity Strategy and managed the New Horizons Fund. Additionally, he was an active member of the U.S. Equity Steering Committee and the Corporate Governance Committee for U.S. Equity.
Between 2001 and 2019, Ellenbogen spearheaded private market investments in several high-profile companies. His leadership at the New Horizons Fund contributed to its recognition with multiple industry awards. Notably, the fund received Investor’s Business Daily’s Best Mutual Funds Award in 2018 across categories such as U.S. Diversified Equity Funds, Growth Funds, and Small-Cap Funds. Additionally, it earned the Thomson Reuters Lipper Fund Award for Best Small-Cap Growth Fund over a ten-year period (2017), a five-year period (2016), and both five- and ten-year periods (2013). Prior to his investment career, Ellenbogen served as Chief of Staff for U.S. Representative Peter Deutsch and gained experience as a Summer Associate at Goldman Sachs.
Academically, he graduated magna cum laude from Harvard College with a degree in History and Science. He later earned a J.D. from Harvard Law School and an MBA from Harvard Business School, where he was recognized as a Baker Scholar. Additionally, he has taught as an adjunct professor at New York University’s Graduate School of Politics. Ellenbogen is a member of the Barron’s Roundtable and contributes to the Investment Committee of the Smithsonian Institution. He also serves as Chairman of the Board for The Posse Foundation.
According to its most recent 13F filing for the fourth quarter of 2024, Durable Capital Partners reported $12.26 billion in managed 13F securities, with its top 10 holdings accounting for 47.59% of its portfolio.
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Our Methodology
The stocks discussed below were picked from Durable Capital Partners’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Top 10 Stocks to Buy According to Durable Capital Partners
10. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders as of Q4: 84
Durable Capital Partners’ Equity Stake: $440.93 Million
Carvana Co. (NYSE:CVNA), an online retailer specializing in used cars, is headquartered in Tempe, Arizona. Established in 2012, the company operates 39 car vending machines across the United States, providing a unique and automated car-buying experience. Carvana generates most of its revenue through retail vehicle sales, supplemented by earnings from wholesale transactions, financing solutions, and ancillary offerings such as vehicle service contracts (VSCs) and GAP waiver coverage. This diversified revenue model has contributed to the company’s rapid growth in the competitive online automotive marketplace.
In its latest earnings report, Carvana Co. (NYSE:CVNA) significantly outperformed market expectations. The company reported earnings per share of $0.56, far exceeding the consensus estimate of $0.31. Revenue for the quarter reached $3.55 billion, surpassing Wall Street’s forecast of $3.31 billion. Sales increased by 46% year-over-year, reflecting strong demand for Carvana’s services. Over the full year, the company recorded a record-breaking $13.67 billion in revenue, a 27% rise from $10.77 billion in 2023. Carvana sold 416,348 vehicles in 2024, marking a 33% increase compared to the previous year, while total gross profit per vehicle grew by nearly $1,400 to $6,908.
Looking ahead to 2025, Carvana Co. (NYSE:CVNA)’s management has expressed confidence in continued growth, anticipating an increase in both retail unit sales and overall earnings. However, the company provided limited specifics in its forward guidance, which may have contributed to a 10% drop in its stock price during after-hours trading. The decline also appears to be a result of profit-taking by investors following an impressive run in the stock.
Carvana Co. (NYSE:CVNA)’s strong financial performance, marked by record revenue growth, rising vehicle sales, and expanding gross profit per unit, demonstrates its ability to scale efficiently and capture market share in the booming online used car industry.
Recurve Capital stated the following regarding Carvana Co. (NYSE:CVNA) in its Q4 2024 investor letter:
“One year is too short a time frame to evaluate anything and we will never be perfect, but overall, nailing Carvana Co. (NYSE:CVNA) mattered much more than anything else.
We assess our portfolio management performance by looking at the breadth of participation across the portfolio and by comparing our actual results to two parallel scenarios: (1) our performance relative to an equal-weight portfolio of the same positions, and (2) our performance relative to the actual portfolio assuming no further trading over the evaluation period. Encouragingly, our actual performance has been better than both alternate scenarios across substantially all evaluation periods. The primary exception is at the end of 2022, when an equal-weight portfolio would have produced better forward returns by having significantly more exposure to Carvana at its record-low prices. These analyses give me comfort that we add value through our active management and optimization of the portfolio.
We care most about portfolio-level returns which largely depend on slugging percentages, but we also know that having a consistent batting average is important. As shown in the chart below, the median position in our portfolio returned +35% in 2024 on a total return basis (including dividends), below our actual performance but nicely above the returns for the major indices. Carvana’s excellent performance in 2024 pulled our actual performance well above the median, but that was our intention given our large position size. We had healthy contributions across the portfolio, but we also benefited from great slugging percentages in 2023 and 2024…” (Click here to read the full text)
9. FirstService Corporation (NASDAQ:FSV)
Number of Hedge Fund Holders as of Q4: 19
Durable Capital Partners’ Equity Stake: $465.99 Million
FirstService Corporation (NASDAQ:FSV), a publicly traded Canadian real estate services company based in Toronto, specializes in residential property management and essential property services. The company operates through two main segments: FirstService Residential, which focuses on property management, and FirstService Brands, which provides a range of property services through both franchised and company-owned operations. These two platforms serve as the primary revenue drivers for the company, positioning it as a leader in the real estate services industry across North America.
On February 25, 2025, FirstService Corporation (NASDAQ:FSV) reported strong financial results for the fourth quarter and full year ended December 31, 2024. Fourth-quarter revenue reached $1.37 billion, reflecting a 27% year-over-year increase. Adjusted EBITDA rose by 33% to $137.9 million, while Adjusted EPS grew 21% to $1.34. Operating earnings for the quarter climbed to $89.6 million, significantly surpassing the $48.1 million reported in the same quarter of the previous year. Additionally, diluted EPS saw a sharp rise to $0.71 per share, compared to $0.14 a year earlier. For the full year 2024, the company posted $5.22 billion in consolidated revenue, marking a 20% increase from 2023. Adjusted EBITDA improved by 24% to $513.7 million, and Adjusted EPS reached $5, up 7% from the prior year. Operating earnings also saw strong growth, increasing from $244.9 million in 2023 to $337.5 million in 2024, with diluted EPS rising from $2.24 to $2.97.
CEO Scott Patterson expressed satisfaction with the company’s performance, highlighting the team’s focus on driving profitable growth and improving margins. He emphasized that FirstService Corporation (NASDAQ:FSV)’s strong momentum and operational execution position it well for a successful 2025. A breakdown of revenue by segment showed that FirstService Residential contributed $521.3 million in fourth-quarter revenue, reflecting a 5% increase from the prior year, while FirstService Brands generated $844.1 million, representing an impressive 45% growth year-over-year. These figures underscore FirstService Corporation (NASDAQ:FSV)’s continued expansion and financial strength, reinforcing its outlook for sustained growth in the coming year.