In this article, we discuss the top 5 stock picks of Jason McDougall’s 11 Capital Partners. If you want our detailed analysis of these stocks, go directly to Top 10 Stock Picks of Jason McDougall’s 11 Capital Partners.
5. CSX Corporation (NASDAQ:CSX)
11 Capital Partners’ Stake Value: $27,056,000
Percentage of 11 Capital Partners’ 13F Portfolio: 5.47%
Number of Hedge Fund Holders: 56
CSX Corporation (NASDAQ:CSX) is a Florida-based holding company that focuses on rail transportation, technology, and real estate in North America. 11 Capital Partners owns 909,736 shares of CSX Corporation (NASDAQ:CSX), worth $27 million, accounting for 5.47% of the fund’s third quarter 13F securities.
On January 20, CSX Corporation (NASDAQ:CSX) reported its Q4 results, posting earnings per share of $0.42, beating estimates by $0.01. The $3.43 billion revenue gained 21.31% year-over-year, exceeding estimates by $109.29 million. Heading into 2022, CSX Corporation (NASDAQ:CSX) is targeting full-year capex spending of about $2 billion.
Argus analyst John Eade kept his Buy rating and $39 price target on CSX Corporation (NASDAQ:CSX) on January 25, and noted that the recent pullback in the stock offers a buying opportunity. The analyst stated that he is positive on the company from a macro standpoint, with the rail industry having been on a secular growth path compared to other transport options. He is also positive on CSX Corporation (NASDAQ:CSX)’s history of raising the dividend and buying back stock.
In Q3 2021, 56 hedge funds were long CSX Corporation (NASDAQ:CSX), with stakes totalling $3.91 billion, as compared to the same number of funds in the prior quarter, holding stakes in CSX Corporation (NASDAQ:CSX) worth $4.2 billion. Soroban Capital Partners is the biggest stakeholder of the company, with 39.5 million shares valued at $1.17 billion.
4. Aramark (NYSE:ARMK)
11 Capital Partners’ Stake Value: $33,961,000
Percentage of 11 Capital Partners’ 13F Portfolio: 6.87%
Number of Hedge Fund Holders: 29
Aramark (NYSE:ARMK) is an American company that offers food service and uniforms to clients operating in the education, healthcare, business, prisons, and leisure sectors. Aramark (NYSE:ARMK) provides its services to customers in the United States, Canada, the United Kingdom, Germany, Philippines, South Korea, Chile, Ireland, and Spain, among others. 11 Capital Partners held a $33.9 million position in Aramark (NYSE:ARMK) as of Q3 2021, which represents 6.87% of the fund’s total 13F securities.
On January 5, Aramark (NYSE:ARMK) entered into a strategic partnership with Patient Engagement Advisors (PEA), and the access to PEA’s technology and service platform positions Aramark (NYSE:ARMK) to assist health systems in managing post-discharge patient care and reduce costly readmissions. The strategic partnership aligns with Aramark (NYSE:ARMK)’s growth strategy and enhances the overall client and customer experience.
Aramark (NYSE:ARMK) declared on February 2 a $0.11 per share quarterly dividend, in line with previous. The dividend is payable on March 2, to shareholders of record on February 16.
Stifel analyst Shlomo Rosenbaum believes that Aramark (NYSE:ARMK) is on track to generate solid new business wins, accelerate organic revenue growth, and improve its margins and free cash flow. The analyst kept a Buy rating and a $48 price target on Aramark (NYSE:ARMK) shares on December 10.
A total of 29 hedge funds were bullish on Aramark (NYSE:ARMK) as of Q3 2021, down from 36 funds in the quarter earlier. Thomas Steyer’s Farallon Capital is the biggest Aramark (NYSE:ARMK) stakeholder, with 18.3 million shares worth roughly $602 million.
3. Microsoft Corporation (NASDAQ:MSFT)
11 Capital Partners’ Stake Value: $39,264,000
Percentage of 11 Capital Partners’ 13F Portfolio: 7.94%
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT), one of the Big Five American technology firms, is one of the most significant holdings of 11 Capital Partners, with the hedge fund owning 139,275 shares of the company, worth $39.2 million. The stock accounts for 7.94% of the fund’s Q3 13F portfolio.
Microsoft Corporation (NASDAQ:MSFT) posted its Q4 financial results on January 25, announcing earnings per share of $2.48, beating estimates by $0.16. Microsoft Corporation (NASDAQ:MSFT)’s revenue jumped 20.09% year-over-year to $51.73 billion, outperforming estimates by $938.45 million.
Tigress Financial analyst Ivan Feinseth on February 4 raised the price target on Microsoft Corporation (NASDAQ:MSFT) to $411 from $366 and kept a Buy rating on the shares after the company reported “another strong quarter”. According to the analyst, a strong revenue and profit driver for Microsoft Corporation (NASDAQ:MSFT) is the ongoing enterprise digitization trend that continues to drive increasing cloud migration.
In the third quarter of 2021, the long hedge fund positions in Microsoft Corporation (NASDAQ:MSFT) increased to 250, up from 238 funds in the preceding quarter. Arrowstreet Capital is one of the prominent Microsoft Corporation (NASDAQ:MSFT) stakeholders, with roughly 18 million shares worth over $5 billion.
Here is what Alger Spectra Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Class A shares of the Alger Spectra Fund underperformed the Russell 3000 Growth Index during the fourth quarter of 2021. Microsoft Corp. was among the top contributors to performance. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s CEO believes technology spending as a percent of GDP is likely to jump from about 5% today to 10% in a few years and that Microsoft will continue to take market share Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 50% inthe past quarter. This high unit volume growth is a primary driver of the company’s higher share price, but 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.”
2. Alphabet Inc. (NASDAQ:GOOG)
11 Capital Partners’ Stake Value: $40,103,000
Percentage of 11 Capital Partners’ 13F Portfolio: 8.11%
Number of Hedge Fund Holders: 156
11 Capital Partners acquired a stake in Alphabet Inc. (NASDAQ:GOOG) in Q3 2021, buying 15,000 shares worth $40.1 million. Alphabet Inc. (NASDAQ:GOOG) is a California-based multinational technology conglomerate that became the parent company of Google and several former Google subsidiaries on October 2, 2015.
Alphabet Inc. (NASDAQ:GOOG) reported its fourth quarter earnings on February 1, reporting an EPS of $30.69, beating estimates by $3.41. Revenue over the period increased 32.39% year-over-year to $75.33 billion, surpassing estimates by $3.50 billion.
Monness Crespi analyst Brian White on February 2 raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,850 from $3,660 and kept a Buy rating on the shares as he raised estimates after the company reported “strong” Q4 results that demonstrate resilient digital ad trends and continued cloud momentum. Alphabet Inc. (NASDAQ:GOOG) should continue to benefit from secular digital ad trends, see strength in the cloud, and introduce metaverse innovations, according to the analyst.
In Q3 2021, 156 hedge funds were long Alphabet Inc. (NASDAQ:GOOG), with stakes totaling roughly $35 billion, as compared to 155 funds in the quarter earlier, holding stakes in Alphabet Inc. (NASDAQ:GOOG) worth $33.79 billion. TCI Fund Management is the largest Alphabet Inc. (NASDAQ:GOOG) stakeholder as of the close of the third quarter of 2021, with 2.95 million shares valued at $7.8 billion.
Here is what Weitz Investment Management has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2021 investor letter:
“A couple of other platform companies deserve a mention as well. Meta Platforms and Alphabet have both been under regulatory scrutiny that has affected their valuations. The threats of punitive action are real, but we have tried to be imaginative about how onerous any fines, rule changes or forced divestitures might be, and we believe that the five year outlook for each is well above average under almost any scenario. So, we include these two in the list of the under-appreciated.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
11 Capital Partners’ Stake Value: $42,991,000
Percentage of 11 Capital Partners’ 13F Portfolio: 8.70%
Number of Hedge Fund Holders: 242
Jeff Bezos’ Amazon.com, Inc. (NASDAQ:AMZN) is the most significant holding of 11 Capital Partners, with the hedge fund elevating its position in the company by 20% in Q3 2021, holding 13,087 shares worth roughly $43 million. Amazon.com, Inc. (NASDAQ:AMZN) stock represents 8.70% of the fund’s 13F securities for the period.
Publishing its Q4 results on February 3, Amazon.com, Inc. (NASDAQ:AMZN) posted earnings per share of $27.75, topping estimates by $24.09. The 137.41 billion revenue jumped 9.44% from the prior-year quarter, but missed estimates by $173.16 million.
On February 4, after Amazon.com, Inc. (NASDAQ:AMZN) delivered better-than-expected operating income results and guidance, Jefferies analyst Brent Thill said that operating income is likely to improve throughout 2022, as capital spending moderates and the U.S. Prime fees increase. The fourth quarter also represented the fourth consecutive acceleration in Amazon Web Services sales growth, noted the analyst, who kept a Buy rating and a $4,000 price target on Amazon.com, Inc. (NASDAQ:AMZN) shares.
According to Insider Monkey’s third quarter database, 242 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), with stakes amounting to $42.5 billion, as compared to 271 funds in the quarter earlier, holding stakes in Amazon.com, Inc. (NASDAQ:AMZN) worth $60.4 billion. Tiger Global Management is one of the leading Amazon.com, Inc. (NASDAQ:AMZN) stakeholders, with 567,870 shares worth $1.86 billion.
Here is what Weitz Investment Management, Inc. has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2021 investor letter:
“Several “platform” companies thrived during COVID and have been very strong stocks. In 2021, their businesses continued to thrive, though their stock prices cooled off. Amazon continues to steamroll the competition and grow rapidly, but its stock ended the year about where it began.”
You can also take a look at Michael Burry Stock Portfolio Performance in 2021: 8 Best Picks and Top 10 Stock Picks of Matthew Halbower’s Pentwater Capital Management.
