In this piece, we will take a look at the top 5 stock picks of Joel Ramin’s 12 West Capital. If you want a more detailed analysis of Mr. Ramin, his fund, and investment philosophy, head on over to the Top 10 Stock Picks of Joel Ramin’s 12 West Capital.
5. Roblox Corporation (NYSE:RBLX)
Mr. Ramin’s Stake Value: $163 million
Percentage of Mr. Ramin’s 13F Portfolio: 6.83%
Number of Hedge Fund Holders: 49
Roblox Corporation (NYSE:RBLX) is an American entertainment provider that is headquartered in San Mateo, California. It offers its users a 3D (three-dimensional) virtual environment where they can interact with each other and a platform that allows developers to build content and applications.
In its third quarter 2021 earnings report, Roblox Corporation (NYSE:RBLX) reported $509 million in revenue and -$0.13 in GAAP EPS, beating analyst estimates for EPS. Truist reduced the company’s share price target to $92 in October 2021 sharing that the firm was cautious about gaming curbs in China.
Mr. Ramin’s 12 West Capital held 1.8 million shares of Roblox Corporation (NYSE:RBLX) during the second quarter of this year, in a stake worth $163 million and 6.83% of its portfolio. During the same time, 49 of the 873 hedge funds polled by Insider Monkey had holdings in the entertainment company.
Roblox Corporation (NYSE:RBLX)’s largest shareholder is Chase Coleman and Feroz Dewan’s Tiger Global Management LLC who owns $2.4 billion of equity through 27 million shares.
In its third quarter 2021 investor letter, investment management firm Tao Value had the following to say about Roblox Corporation (NYSE:RBLX):
“Roblox is a new position of “Mindful Compounder” category and is a new breed of business that is hard to define at this point. It started with gaming but has the potential to evolve to a new being for human society. Roblox management calls it “human co-experience” and many practitioners call it “metaverse”.
Tao
The company made many “drastic and rational” decisions which shows deep mindfulness – an important trait I look for. The first thing caught my attention is management’s attitude towards security, privacy & trust. Different than Facebook, Roblox took trust and security seriously very early on. So serious that they actually report “Infrastructure and Trust & Safety“ as an accounting item in its operating expense breakdown, indicating that they see the trust & safety is an integral part of the infrastructure of the virtual world. Roblox didn’t just say it, but also did so. For example, Roblox doesn’t have voice chat functionality, which is a key engagement feature and is almost a standard setup for almost all gaming platforms. Yet it is also a feature that is very hard to moderate in real time with old day technologies and can be abused heavily. Roblox made a conscious decision to put security/trust before product stickiness and deferred the audio chat until recently (Roblox recently rolled out an alpha test moderated by AI-based technologies).
Roblox, as any other large social platforms (which becomes the human society itself), will unavoidably have the dark side of the humanity. One Wired article revealed the story about “How ‘Roblox’ Became a Playground for Virtual Fascists”. Yet it is how the platform sees and treats the problem matters. In Roblox’ case, it seems to me that they have a very strong stand on their responsibility (to be the trustee of its users). According to this article, a Roblox spokesperson said the company reviews “every single image, audio file, and video before it is uploaded.” Accordingly, Roblox disclosed that it has 3600 people (albeit outsourced) working on trust and safety, compared to only 1200 full time employees…”
4. Repligen Corporation (NASDAQ:RGEN)
Mr. Ramin’s Stake Value: $214 million
Percentage of Mr. Ramin’s 13F Portfolio: 8.99%
Number of Hedge Fund Holders: 35
Repligen Corporation (NASDAQ:RGEN) manufactures and sells technologies and systems for biological drug manufacturing. The company offers protein ligands, chromatography and filtration products.
By the end of the second quarter, Mr. Ramin held one million shares of Repligen Corporation (NASDAQ:RGEN) in a stake that is worth $214 million and represents 8.99% of his portfolio. The company earned $178 million in revenue and $0.78 in non-GAAP EPS in its third quarter, beating analyst estimates on both counts.
In an September 2021 investment note, Craig-Hallum raised Repligen Corporation’s (NASDAQ:RGEN) price target to $368 sharing that the company’s protein segment is set to benefit in the wake of the ongoing pandemic. Insider Monkey’s second quarter survey of 873 hedge funds revealed that 35 held a stake in Repligen Corporation (NASDAQ:RGEN).
Repligen Corporation (NASDAQ:RGEN)’s largest stakeholder is Robert Joseph Caruso’s Select Equity Group who owns 1.2 million shares worth $258 million.
In its third-quarter 2021 investor letter, Alger, an investment management firm mentioned Repligen Corporation (NASDAQ:RGEN) and stated:
“Repligen Corporation was among the top contributors to performance. Repligen is aleading provider of advanced bioprocessing technologies and solutions used in manufacturing biologic drugs. Repligen’s main product areas are in filtration, which involves removing cellular metabolic waste during fermentation; chromatography, which purifies the final biologic drugs; growth factor products, which are used during manufacturing; and process analytics, which is used to analyze the purity of drug substances. The performance of Repligen shares benefited from the company announcing in July that it generated strong second quarter results. Repligen posted impressive organic growth resulting from strong demand for its core products and COVID-19 vaccine manufacturing. In addition, Repligen closed the acquisition of Polymem SA in July to significantly expand its filtration manufacturing capacity and add new technologies. The company also announced the acquisition of Avitidei, which could strengthen its protein and growth factor business.”
3. Shake Shack Inc. (NYSE:SHAK)
Mr. Ramin’s Stake Value: $231 million
Percentage of Mr. Ramin’s 13F Portfolio: 9.71%
Number of Hedge Fund Holders: 20
Shake Shack Inc. (NYSE:SHAK) is an American fast food provider that is based out of New York, New York after being founded in 2001. The company is known for its hamburgers, hot dogs, shakes, beers and other food items. It operates both globally and domestically.
In its third quarter 2021 earnings report, Shake Shack Inc. (NYSE:SHAK) reported $193.9 million in revenue and -$0.06 in GAAP EPS, beating analyst estimates for both. Northcoast downgraded the company’s shares to Neutral in a November 2021 analyst note, after the earnings, citing weak Q4 guidance and a worry that the company might not be able to turn revenue into earnings.
Mr. Ramin’s 12 West Capital held 2 million shares of Shake Shack Inc. (NYSE:SHAK) during the second quarter of this year, in a stake worth $231 million and representing 9.71% of its portfolio. During the same time, 20 of the 873 hedge funds polled by Insider Monkey had holdings in the company.
Shake Shack Inc. (NYSE:SHAK)’s largest shareholder after 12 West Capital is Robert Joseph Caruso’s Select Equity Group who owns $102 million of equity through 954,928 shares.
In its third-quarter 2021 investor letter, investment firm Alger had the following to say about Shake Shack Inc. (NYSE:SHAK):
“Shake Shack, Inc. was among the top detractors from performance. Shake Shack is a modern day “roadside” burger stand serving a classic American menu of premium burgers, hot dogs, crinklecut fries, shakes, frozen custard, beer and wine. Founded by Danny Meyer’s Union Square Hospitality Group (“USHG”), Shake Shack was created by leveraging USHG’s expertise in sourcing premium ingredients, community building, hospitality, fine dining and restaurant operations. There are currently 339 locations, including restaurants in 32 U.S. states and the District of Columbia and 116 international locations in cities like London, Hong Kong, Shanghai, Singapore, the Philippines, Mexico, Istanbul, Dubai, Tokyo, Seoul and more.
Shares of Shake Shack underperformed in the third quarter due to a slower-than-expected recovery in urban locations and a lower-than-expected margin outlook. Sales at Urban locations were still down 18% year over year in July compared to a 23% decline in May, a modest improvement but less than expectations. We believe a delay in return to work has caused a temporary stalling in the company’s margin recovery, but this should improve as urban mobility increases and tourism from foreigners normalizes. On margins, the company guided to 15%-17% restaurant-level margins, which was below expectations of 18.9%. This margin outlook factored in higher wage inflation, which the company will begin to offset with a 3.5% price increase in the coming months. We believe margin recovery can potentially follow a sales recovery so near-term revenue choppiness may result in margin weakness but we believe the company is well positioned for when the environment normalizes as the pandemic winds down. Ultimately, we believe the pandemic accelerated Shake Shack’s digital efforts, so the company is currently positioned to benefit from a strong online presence. Digital was only 12% of sales in the early months of 2020, but that increased to 47% as of the second quarter of this year.”
2. 10x Genomics, Inc. (NASDAQ:TXG)
Mr. Ramin’s Stake Value: $376 million
Percentage of Mr. Ramin’s 13F Portfolio: 15.77%
Number of Hedge Fund Holders: 28
10x Genomics, Inc. (NASDAQ:TXG)’s largest shareholder is Catherine D. Wood’s ARK Investment Management who owns 4.3 million shares worth $842 million.
In its third quarter 2021 earnings report, 10x Genomics, Inc. (NASDAQ:TXG) reported $125 million in revenue and -$0.15 in GAAP EPS, beating analyst estimates for both. BofA downgraded the company’s shares to Neutral in a September 2021 analyst note with a $180 price target, sharing that a ‘negative tone’ during earnings cast a shadow on the company’s future.
1. GDS Holdings Limited (NASDAQ:GDS)
Mr. Ramin’s Stake Value: $749 million
Percentage of Mr. Ramin’s 13F Portfolio: 31.43%
Number of Hedge Fund Holders: 38
GDS Holdings Limited (NASDAQ:GDS) is a Chinese company headquartered in Shanghai, China and founded in 2001. It operates data centers in the Asian country and provides services such as consulting to several industries such as finance, internet and cloud.
GDS Holdings Limited (NASDAQ:GDS)’s biggest hedge fund holder after Mr. Ramin is Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, which holds 2.5 million shares that are roughly worth $201 million.
By the end of the second quarter of this year, Mr. Ramin’s 12 West Capital held 9.5 million shares of GDS Holdings Limited (NASDAQ:GDS) with the stake equaling $749 million and representing 31.43% of the investment firm’s portfolio. At the same time, 38 of 873 hedge funds polled by Insider Monkey held shares of GDS Holdings Limited (NASDAQ:GDS).
GDS Holdings Limited (NASDAQ:GDS) reported $288 million in revenue for its second quarter, alongside GAAP EPS of -$0.03 as it met analyst estimates for revenue and beat them for EPS. In a November 2021 analyst note, RBC Capital lowered the company’s price target to $82 and kept an Outperform rating for GDS Holdings Limited (NASDAQ:GDS) shares, highlighting that it expected strong operating performance but regulatory uncertainty was creating headwinds.
Baron Funds, in its third-quarter 2021 investor letter, mentioned GDS Holdings Limited (NASDAQ:GDS) and highlighted that:
“GDS Holdings Limited: Following several years of delivering strong shareholder returns for the Fund, we exited our position in GDS, the leading developer and operator of data centers in China. Though we hold management in high regard and believe there is potential for strong long-term growth, we are uncomfortable with the political landscape in China, including the scrutiny of the technology industry. We will continue to monitor developments and perhaps acquire shares again in the future.”
Disclosure: None. You can also take a peek at the 10 Best Consumer Finance Stocks To Buy Now and 10 Best Augmented Reality Stocks to Buy Now.
