5. Twilio Inc. (NYSE:TWLO)
Foxhaven Asset Management’s Stake Value: $272 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 7.38%
Number of Hedge Fund Holders: 96
Michael Pausic’s Foxhaven Asset Management held a huge position in Twilio Inc. (NYSE:TWLO) since 2017. Its shares remained under pressure in 2021. Despite that, shares of cloud communication as a service company are up more than 500% in the past five years.
In the third quarter investor letter, RiverPark Funds, an investment management firm, mentioned a few stocks including Twilio. Here is what RiverPark Funds stated:
“TWLO shares were also a top detractor for the quarter. Just like after 1Q, despite another quarterly beat in 2Q, management guidance–which we believe to be conservative–disappointed some investors. Second quarter revenue of $669 million was up 67% year over year, significantly exceeding management’s guidance of 47%-50% revenue growth. Management guided 3Q21 revenue to 50%-52% revenue growth, which was ahead of expectations, but due to continued investment also guided to a non-GAAP operating loss of $25 million-$30 million, which was below the Street’s forecast of a $12 million loss.
The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Foxhaven Asset Management’s Stake Value: $278 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 8.02%
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ:AMZN) is the long-running stock holding of Michael Pausic’s Foxhaven Asset Management. The firm first initiated a position in the company in 2013. It was the fourth-largest stock holding of Foxhaven as of the end of September. Share of Amazon.com surged sharply in the past year amid people’s move towards online platforms.
In the third quarter investor letter, ClearBridge Investments, an investment management firm, expressed confidence in Amazon’s growth potential. Here is what ClearBridge said:
“While Amazon.com and Facebook, the Strategy’s overweights in the mega cap group, underperformed both their FAAMG peers and the benchmark in the third quarter, we maintain conviction in these names because they have the highest growth profiles. Amazon is projected to grow earnings per share at 19% next year and Facebook at 13%, while Apple is expected to see only breakeven earnings in 2022 (Exhibit 1). Amazon is spending at an elevated level right now, but the underlying demand trends are healthy, and we believe that once the rate of spending moderates, returns will improve.”
3. Mercadolibre, Inc. (NYSE:MELI)
Foxhaven Asset Management’s Stake Value: $279 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 8.05%
Number of Hedge Fund Holders: 68
The dip of more than 16% in Mercadolibre Inc (NYSE:MELI) stock price over the last 12 months could be an attractive buying opportunity for new investors. The e-commerce and online auctions platform is a member of Foxhaven Asset Management since the beginning of 2018.
In the third quarter investor letter, LRT Capital Management, an investment management firm, said that Mercadolibre is trading at attractive valuations. Here is what LRT Capital Management said:
“Mercadolibre, Inc. (MELI) – the LatAm eCommerce, shipping, and payments company, is now trading at a very attractive valuation – its lowest P/S ratio ever. The concerns here have to do with the recession in Brazil and slowing economic growth throughout the region.”
2. Atlassian Corporation PLC (NASDAQ:TEAM)
Foxhaven Asset Management’s Stake Value: $349 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 10.05%
Number of Hedge Fund Holders: 60
Atlassian Corporation PLC (NASDAQ:TEAM) generated nearly 30% stock price gain for shareholders in the past twelve months. The Australian software company is the second-largest stockholding of Foxhaven Asset Management as of September, according to data tracked by Insider Monkey.
ClearBridge Investments, an investment management firm, praised Atlassian’s performance in the third quarter investor letter. Here is what ClearBridge Investments stated:
“The ClearBridge Mid Cap Growth Strategy delivered positive absolute performance and outperformed the benchmark in the third quarter, with the primary differentiator being stock selection among our IT holdings. The tech names in the portfolio gained 10.1% for the quarter compared to a 2.2% gain for tech in the benchmark. Most of the heavy lifting was done by enterprise software holdings that are helping businesses analyze activity and execute more efficiently, such as Atlassian. The leading contributors to absolute returns during the third quarter included Atlassian.”
1. Meta Platforms, Inc. (NASDAQ:FB)
Foxhaven Asset Management’s Stake Value: $436 million
Percentage of Foxhaven Asset Management’s 13F Portfolio: 12.57%
Number of Hedge Fund Holders: 248
Meta Platforms, Inc. (NASDAQ:FB) was the largest stock holding of Michael Pausic’s Foxhaven Asset Management as of September. Its stock price soared more than 20% in the past twelve months. The company continues to generate double-digit revenue and earnings growth.
Facebook is the second most popular stock among 867 hedge funds tracked by Insider Monkey. Facebook Inc (NASDAQ:FB) was in 248 hedge funds’ portfolios at the end of September.
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