In this article, we discuss the top 5 stock picks of Alexander Captain’s Cat Rock Capital. If you want to read our detailed analysis of the Captain’s investment philosophy and performance, go directly to Top 10 Stock Picks of Alexander Captain’s Cat Rock Capital.
5. Microsoft Corporation (NASDAQ:MSFT)
Cat Rock Capital’s Stake Value: $72,453,000
Percentage of Cat Rock Capital’s 13F Portfolio: 7.53%
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) develops, licenses, and sustains software, services, hardware, and solutions globally. According to Insider Monkey’s data, 259 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT) at the end of March 2022, down from 262 funds in the last quarter. Alexander Captain’s Cat Rock Capital owned 235,000 Microsoft Corporation (NASDAQ:MSFT) shares in the first quarter of 2022, worth $72.45 million, representing 7.53% of the total 13F portfolio.
In the company’s Q2 earnings report published on July 26, Microsoft Corporation (NASDAQ:MSFT)’s EPS totaled $2.23, missing estimates by $0.07. In addition, its $51.87 billion revenue missed the revenue estimates by $490 million.
Here is what Carillon Tower Advisers has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2022 investor letter:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Microsoft (NASDAQ:MSFT) reported positive results driven by personal computing strength, but analysts were especially positive on its growth outlook for its Azure cloud-computing services.”
4. TransDigm Group Incorporated (NYSE:TDG)
Cat Rock Capital’s Stake Value: $75,789,000
Percentage of Cat Rock Capital’s 13F Portfolio: 7.87%
Number of Hedge Fund Holders: 64
TransDigm Group Incorporated (NYSE:TDG) manufactures engineered aircraft systems, subsystems, and components. In the first quarter of 2022, Alexander Captain’s Cat Rock Capital reported owning 116,323 TransDigm Group Incorporated (NYSE:TDG) shares worth over $75.79 million, representing 7.87% of the total 13F holdings.
According to Insider Monkey’s data, 64 out of the 912 hedge funds held stakes in TransDigm Group Incorporated (NYSE:TDG) in the first quarter of 2022, worth $5.59 billion, compared to the same number of funds in the previous quarter, holding stakes in the company valued at $6.35 billion.
Here is what Vulcan Value Partners has to say about TransDigm Group Incorporated (NYSE:TDG) in its Q1 2022 investor letter:
“TransDigm Group Inc., another material contributor during the quarter, is an aerospace manufacturer providing highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales. Its business was impacted by the global pandemic; however, the company has been able to maintain margins despite strong revenue headwinds, and it continues to generate strong free cash flow.”
3. Liberty Broadband Corporation (NASDAQ:LBRDA)
Cat Rock Capital’s Stake Value: $140,438,000
Percentage of Cat Rock Capital’s 13F Portfolio: 14.6%
Number of Hedge Fund Holders: 26
Liberty Broadband Corporation (NASDAQ:LBRDA) specializes in the cable, internet, and mobile location technology industries. Boykin Curry’s Eagle Capital Management is one of the leading shareholders of Liberty Broadband Corporation (NASDAQ:LBRDA), with 8.37 million shares worth $1.13 billion.
Following the first-quarter results, Deutsche Bank analyst Bryan Kraft decreased his price target on Liberty Broadband Corporation (NASDAQ:LBRDA) from $196 to $158 and maintained a ‘Buy’ rating on the stock on May 10.
Securities filings for the first quarter of 2022 revealed that Alexander Captain’s Cat Rock Capital owned 1.04 million shares of Liberty Broadband Corporation (NASDAQ:LBRDA), worth $140.44 million, representing 14.6% of the total holdings. The hedge fund trimmed its stake in Liberty Broadband Corporation (NASDAQ:LBRDA) by 19% in the first quarter.
Fund managers added to their Liberty Broadband Corporation (NASDAQ:LBRDA) holdings in the first quarter. Among the hedge funds tracked by Insider Monkey, 26 funds were bullish on Liberty Broadband Corporation (NASDAQ:LBRDA) at the end of the first quarter of 2022, up from 22 funds in the prior quarter.
In its Q1 2022 investor letter, Longleaf Partners Fund mentioned Liberty Broadband Corporation (NASDAQ:LBRDA). Here is what the fund said:
“Liberty Broadband – A new position in 4Q 2021, holding company Liberty Broadband also suffered from a widening of a market-imposed holdco discount in an uncertain quarter. Liberty’s stakes in Charter and Alaskan cable company GCI also faced near-term concerns over slowing industry broadband additions, but these businesses have over a decade of pricing power history and are well positioned to weather an inflationary environment. We have a high degree of respect for our partners in John Malone and Greg Maffei, who are focused on growing value per share and are actively repurchasing discounted shares to help close the price-to-value gap.”
2. Meta Platforms, Inc. (NASDAQ:META)
Cat Rock Capital’s Stake Value: $177,264,000
Percentage of Cat Rock Capital’s 13F Portfolio: 18.43%
Number of Hedge Fund Holders: 200
Meta Platforms, Inc. (NASDAQ:META) is a multinational technology business based in Menlo Park, California. In response to rising production costs, Meta Platforms (NASDAQ:META) increased the price of its Quest 2 virtual reality headsets by around $100 on July 26. Starting on August 1, the Quest 2 headsets will cost $399 for the 128 GB variant and $499.99 for the 256-gigabyte model.
In the first quarter of 2022, Alexander Captain’s Cat Rock Capital portfolio held 797,192 shares of Meta Platforms, Inc. (NASDAQ:META), worth about $177.26 million, representing 18.43% of the total 13F securities. Cat Rock Capital’s stake in Meta Platforms, Inc. (NASDAQ:META) increased by 54% in the first quarter of 2022.
As per Insider Monkey’s data, 200 hedge funds were bullish on Meta Platforms, Inc. (NASDAQ:META) at the end of the first quarter of 2022, down from 224 funds in the earlier quarter.
Here is what Boyar Value Group has to say about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2021 investor letter:
“Corporate executives can have many different reasons for selling shares (anticipation of tax law changes, philanthropy, diversification, and much more), but the sheer number of billionaire founders who sold shares in 2021 should raise eyebrows and might well be signaling a market top. Bloomberg’s Ben Steverman and Scott Carpenter report not only that Mark Zuckerberg of Meta Platforms Inc. (formerly known as Facebook) sold shares in his company almost every day last year but also that the founders of Google sold ~$3.5 billion worth of stock (the first time either Sergey Brin or Larry Page has sold shares since 2017).”
1. Docebo Inc. (NASDAQ:DCBO)
Cat Rock Capital’s Stake Value: $249,818,000
Percentage of Cat Rock Capital’s 13F Portfolio: 25.97%
Number of Hedge Fund Holders: 11
Docebo Inc. (NASDAQ:DCBO) provides cloud-based technology for educating internal and external workforces, partners, and clients in North America, Europe, and the Asia-Pacific region. On May 13, TD Securities analyst Daniel Chan maintained a Buy rating on Docebo Inc. (NASDAQ:DCBO), decreasing his price objective to C$70 from C$90.
In the first quarter of 2022, Alexander Captain’s hedge fund owned 4.82 million shares of Docebo Inc. (NASDAQ:DCBO), worth about $249.82 million, representing 25.97% of the total 13F portfolio. The hedge fund has increased its stake in Docebo Inc. (NASDAQ:DCBO) by 47% in the first quarter of 2022. Alexander Captain’s Cat Rock Capital is the leading position holder of the company.
According to Insider Monkey’s data, Docebo Inc. (NASDAQ:DCBO) was part of 11 hedge fund portfolios at the end of the first quarter of 2022, up from 10 funds in the prior quarter.
You can also take a peek at Top 10 Stock Picks of Teresa Barger’s Cartica Management and Top 10 Stock Picks of Cannell Capital.
