In this article, we will discuss the top 5 stock picks of Gordon Malin’s Mountain Road Advisors. If you want to read our detailed analysis of Malin’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stock Picks of Gordon Malin’s Mountain Road Advisors.
5. Prudential Financial, Inc. (NYSE:PRU)
Mountain Road Advisors Stake Value: $38,487,000
Percentage of Mountain Road Advisors’ 13F Portfolio: 7.52%
Number of Hedge Fund Holders: 28
Prudential Financial, Inc. declared a quarterly dividend of $1.15 per share, in line with the previous. After the company disclosed its decision to sell 17% of its in-force variable annuity block business, Barclays analyst Tracy Benguigui boosted her price objective on Prudential to $110 from $102 and maintained an “Equal Weight” rating on the stock on September 16.
Prudential Financial, Inc. ranks fifth on the list of top 10 stock picks of Gordon Malin’s Mountain Road Advisors. The hedge fund holds more than 375,595 shares in the company worth over $38.49 million, representing 7.52% of their portfolio. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the most significant shareholder of the company, with a $231.09 million stake.
4. Meta Platforms, Inc. (NASDAQ:FB)
Mountain Road Advisors Stake Value: $38,774,000
Percentage of Mountain Road Advisors’ 13F Portfolio: 7.57%
Number of Hedge Fund Holders: 266
Facebook was also in the limelight after changing its name to Meta Platforms, Inc. (NASDAQ:FB). The company reported EPS of $3.22 vs the average expectation of $3.19 for the third quarter. Sales for the quarter totaled $29.01 billion, compared to a consensus estimate of $29.58 billion.
On October 26, Truist analyst Youssef Squali lowered his price target on Meta Platforms, Inc. to $400 from $425 but kept a “Buy” rating on the shares post its third-quarter results. According to the analyst, the company’s size demonstrates durability in the face of industry issues. In addition, the continued headwinds from Apple’s (AAPL) iOS updates, making ad targeting and measurement more difficult, are likely to be temporary rather than structural.
Mountain Road Advisors raised its position in Meta Platforms, Inc. by 4% to 111,513 shares in the second quarter, accounting for 7.57% of the overall portfolio.
In its third-quarter 2021 investor letter, Polen Capital mentioned Meta Platforms, Inc. (NASDAQ:FB). Here is what the fund said:
“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.”
3. NXP Semiconductors N.V. (NASDAQ:NXPI)
Mountain Road Advisors Stake Value: $42,094,000
Percentage of Mountain Road Advisors’ 13F Portfolio: 8.22%
Number of Hedge Fund Holders: 52
NXP Semiconductors N.V. (NASDAQ:NXPI) manufactures high-performance mixed-signal semiconductors in automobiles, mobile payments, and other applications. To allow Electronic Design Automation on the cloud, NXP Semiconductors N.V. has chosen Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (NASDAQ:AMZN).
Stacy Rasgon, a Bernstein analyst, downgraded NXP Semiconductors from “Outperform” to “Market Perform” on October 29, with a price target of $230, down from $245. The analyst is becoming increasingly concerned about the stock’s value and the automotive end market.
Mountain Road Advisors started building its position in NXP Semiconductors in the fourth quarter of 2018 and currently holds over 204,618 shares in the company, valued at $42.09 million. The company represents 8.22% of the hedge fund’s 13F portfolio. Out of the hedge funds being tracked by Insider Monkey, Adage Capital Management is a leading shareholder in NXP Semiconductors, with 392,208 shares worth more than $80.69 million.
ClearBridge Investments, in its first-quarter 2021 investor letter, mentioned NXP Semiconductors N.V. (NASDAQ:NXPI). Here is what the fund said:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. Two recent additions, specialty semiconductor maker NXP Semiconductors and semiconductor capital equipment firm ASML also delivered strong performance in the first quarter. NXP rose as auto production ramped up and electric vehicle sales continued to expand. ASML, which operates in a virtual monopoly for high-end chipmaking equipment, began to exert pricing power as it works through an order backlog that has stretched to over a year. Both are Dutch-based companies and out-of-benchmark names that provide access to different growth profiles than are available in the U.S. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
2. Alphabet Inc. (NASDAQ:GOOG)
Mountain Road Advisors Stake Value: $45,978,000
Percentage of Mountain Road Advisors’ 13F Portfolio: 8.98%
Number of Hedge Fund Holders: 190
Alphabet Inc. plans to invest $1 billion in Africa over the next five years. The funds will be used to help Africa’s digital revolution, which will cover anything from greater internet access to startup investment. Alphabet was in 190 hedge funds’ portfolios at the end of the second quarter of 2021, up from 185 hedge funds in our database at the end of the previous quarter.
Alger, an investment management firm, in its third-quarter 2021 investor letter, mentioned Alphabet Inc. (NASDAQ:GOOG). Here is what Alger has to say about the company:
“Alphabet Inc. was among the top contributors to performance during the third quarter. Alphabet is a leading internet search provider and is a beneficiary in the share shift of advertising dollars from traditional mediums like television, radio and newspapers to digital platforms. The company is a leader in implementing Al, autonomous vehicles and cloud computing it and owns the highly trafficked YouTube property. Alphabet contributed to performance due to a strong quarterly report highlighted by revenue growth that beat consensus expectations across segments. The company’s core search revenues have increased 10% over the past two years, with cloud computing increasing 8%. Results from YouTube also exceeded expectations. When discussing quarterly results, Alphabet management said retail, entertainment and travel were end markets that were particularly strong. The fixed cost structure of Alphabet’s search service resulted in profitability resulting from the increase in revenues being better than expected.”
1. Microsoft Corporation (NASDAQ:MSFT)
Mountain Road Advisors Stake Value: $51,003,000
Percentage of Mountain Road Advisors’ 13F Portfolio: 9.96%
Number of Hedge Fund Holders: 238
In the second quarter, Mountain Road Advisors increased its stake in Microsoft Corporation (NASDAQ:MSFT) by 2%, and the hedge fund’s 9.96% stake in the company is now worth about $51 million. Microsoft ranks first on the list of top 10 stock picks of Gordon Malin’s Mountain Road Advisors.
Alger, in its third-quarter 2021 investor letter, mentioned Microsoft Corporation (NASDAQ:MSFT). Here is what the fund said:
“Microsoft Corporation was among the top contributors to performance during the third quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 51% in the second quarter. This high unit volume growth is a primary driver of the company’s higher share price, but the company’s strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
You can also take a peek at Top 10 Stock Picks of Peter Avellone’s Cartenna Capital and Top 10 Stock Picks of Ryan Frick’s Dorsal Capital: Facebook, Snap and More
