In this article, we will be taking a look at the top 5 stock picks of Jeffrey Diehl’s Adams Street Partners. To read our detailed analysis, you can go directly to see Top 10 Stock Picks of Jeffrey Diehl’s Adams Street Partners.
5. Couchbase, Inc. (NASDAQ:BASE)
Adams Street Partners’ Stake Value: $31.040 million
Number of Hedge Fund Holders: 8
Couchbase, Inc. (NASDAQ:BASE) is a NoSQL cloud database, with its aim being to provide a modern database for enterprise applications. While Couchbase, Inc. (NASDAQ:BASE) has lost 32% in share price YTD during 2022, it has started to recover a bit in the past month, rising by nearly 18%.
Baron Funds published its Q3 investor letter, where Couchbase, Inc. (NASDAQ:BASE) was mentioned. Here is what it said:
“Couchbase, Inc., a new position in the Fund after a successful IPO, provides a modern database that collects and stores data and powers enterprise applications, for which there is no tolerance for disruption, inaccuracy, or downtime. The Couchbase database is based on a platform called NoSQL, which means that rather than having a predetermined rigid structure to store data (like legacy relational database software), it stores data in documents, making it easy to have a flexible set of items that can move into and out of each record. Its solution is fast as it utilizes caching, or retrieval from memory, versus hard drives; scales to large numbers of records, which is expensive for old-style relational databases and not even possible with some of the other NoSQL solutions; and works in all settings (on-premise, in the cloud, or in mixed hybrid environments). Couchbase is addressing a large total market of $62 billion, which is slowly migrating to the cloud and using less rigid database structures. We believe Couchbase can win its fair share of these workloads over time given its unified platform, ability to scale run anywhere, and its familiar query language that makes it easier for developers to quickly create solutions. The company’s growth rate is currently being impacted by COVID (about 15% of Couchbase’s customers are in the travel and hospitality industries), but we believe a return to normal pre-COVID spending levels later this year and into early 2022 should help to accelerate growth. Longer term, we believe that management will improve its go-to market efficiency, which will further accelerate growth. Given that revenues are only about $150 million now, it has a huge opportunity in this $62 billion marketplace, and we expect that Couchbase will be a profitable investment for many years to come.”
4. Q2 Holdings, Inc. (NYSE:QTWO)
Adams Street Partners’ Stake Value: $47.937 million
Number of Hedge Fund Holders: 19
Q2 Holdings, Inc. (NYSE:QTWO) provides end-to-end banking services and has services for both the consumer as well as the commercial industry. Making up nearly 9% of the total portfolio, Q2 Holdings, Inc. (NYSE:QTWO) is one of the top 10 stock picks of Jeffrey Diehl’s Adams Street Partners.
Q2 Holdings, Inc. (NYSE:QTWO) has been in the news while piquing the interest of investors as it announced that it would be considering sale offers. However, Q2 Holdings, Inc. (NYSE:QTWO) decided to hold off for the moment as the bids that were coming in were lower than what the company had anticipated.
Artisan Partners published its Q3 2021 investor letter, where it mentioned Q2 Holdings, Inc. (NYSE:QTWO). Here is what it said:
“Among our bottom contributors was Q2 Holdings. Q2 Holdings is a leading provider of secure, cloud-based virtual banking solutions for smaller regional and community banks. Shares have been pressured alongside slowing in the company’s bookings backlog as it faces difficult year-over-year growth comparisons and recovers from an air pocket of bookings caused by delays in bank decision-making during the harshest of pandemic lockdowns. We expect these headwinds to abate over the near-to-intermediate term. We believe several areas of Q2’s business appear lowly penetrated— RCFI regional and community financial institutions—and given recent client wins, a reasonable valuation and an improving selling environment, we are remaining patient.”
3. Paylocity Holding Corporation (NASDAQ:PCTY)
Adams Street Partners’ Stake Value: $122.063 million
Number of Hedge Fund Holders: 30
Paylocity Holding Corporation (NASDAQ:PCTY) provides cloud-based payroll and HR software, which is built to free the recipient company of arduous tasks. Founded in 1997, Paylocity Holding Corporation (NASDAQ:PCTY) has grown significantly in the past 5 years, with its share price increasing by more than 293% in the time period, despite the recent decrease in 2022.
Paylocity Holding Corporation (NASDAQ:PCTY) was also mentioned by Polen Capital in its Q4 2021 investor letter. Here is what it said:
“All our Portfolio companies, detractors included, are delivering on our long-term expectations and continue to have compelling growth prospects… We also reduced our position in Paylocity. This was purely a risk management decision, as we are still very positive on each company and its prospects.”
2. Vacasa, Inc. (NASDAQ:VCSA)
Adams Street Partners’ Stake Value: $129.851 million
Number of Hedge Fund Holders: 20
Vacasa, Inc. (NASDAQ:VCSA) is a vacation rental management company that manages properties in several countries including North America, and it has a presence in 34 American states. Vacasa, Inc. (NASDAQ:VCSA) reported $889 million in revenue in 2021. While the market has been neutral on Vacasa, Inc. (NASDAQ:VCSA) lately, its director Karl Peterson recently purchased 500,000 shares of the company for a transaction worth $1.385 million.
1. Rimini Street, Inc. (NASDAQ:RMNI)
Adams Street Partners’ Stake Value: $136.68 million
Number of Hedge Fund Holders: 16
With a position worth $136.68 million, Rimini Street, Inc. (NASDAQ:RMNI) is the top stock pick of Jeffrey Diehl’s Adams Street Partners. Rimini Street, Inc. (NASDAQ:RMNI) is a small-cap tech company which claims to be the “leading provider of independent, third-party enterprise software support services, driving substantial savings and better business outcomes”.
Rimini Street, Inc. (NASDAQ:RMNI) has increased its active clients by 13% to just under 2,900 and has some promising indicators but large sales of its shares made by the CEO are a bit discouraging, along with the fact that there is a lot of competition in the same space. Rimini Street, Inc. (NASDAQ:RMNI) also recently announced a stock repurchase plan, upping the amount from $15 million to $50 million.
You can also take a look at 10 Best Real Estate Stocks To Buy Now and 10 Cheap Stocks Leon Cooperman Is Buying.
