In this article, we discuss the top 5 stock picks of Tom Purcell’s Alua Capital Management based on Q2 holdings of the fund. If you want to read our detailed analysis of Purcell’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stock Picks of Tom Purcell’s Alua Capital Management.
5. ICICI Bank Limited (NYSE:IBN)
Alua Capital Management Stake Value: $210.4 million
Percentage of Alua Capital Management’ 13F Portfolio: 10.96%
No. of Hedge Fund Holders: 28
ICICI Bank Limited (NYSE: IBN) is a bank based in India. It offers various services like loans, debit, credit cards, mortgages, insurance, banking and investment services. It is fifth on our list of top stock picks of Tom Purcell’s Alua Capital Management.
India’s economy is expected to rise by 9.5% in 2021 according to IMF’s predictions. ICICI Bank Limited (NYSE: IBN) could profit from increased loan and deposit growth as one of India’s top banks. The banks core profit grew by 16.9% year over year in 2021. Similarly account profits increased by 25.5% during fiscal year 2021.
Our data shows that Lone Pine Capital is one of the biggest stakeholders of ICICI Bank Limited (NYSE: IBN) with 43 million shares worth $737.9 million.
At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in ICICI Bank Limited (NYSE: IB), down from 31 the preceding quarter worth $1.9 billion.
4. CIT Group Inc. (NYSE:CIT)
Alua Capital Management Stake Value: $231.4 million
Percentage of Alua Capital Management’ 13F Portfolio: 12.05%
No. of Hedge Fund Holders: 30
CIT Group Inc. (NYSE: CIT), headquartered in New York City, is a bank holding company as well as a financial holding company. The company mainly serves middle-market enterprises in North America and provides financing, leasing, and advising services to them. It is fourth on our list of top stock picks of Tom Purcell’s Alua Capital Management.
On April 29, investment advisory Wells Fargo kept an Equal Weight rating on CIT Group Inc. (NYSE: CIT) stock and increased the price target to $54 from $38, following good quarterly results.
Our data shows that Alua Capital Management is one of the biggest stakeholders of CIT Group Inc. (NYSE: CIT) with 4.5 million shares worth $231.4 million.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $751.8 million in CIT Group Inc. (NYSE: CIT), up from 28 the preceding quarter worth $802 million.
3. Carvana Co. (NYSE:CVNA)
Alua Capital Management Stake Value: $244.9 million
Percentage of Alua Capital Management’ 13F Portfolio: 12.76%
No. of Hedge Fund Holders: 63
Carvana Co. (NYSE: CVNA) is an e-commerce company headquartered in Tempe, Arizona. The company sells secondhand vehicles online. It is third on our list of top stock picks of Tom Purcell’s Alua Capital Management.
On August 9, investment advisory Needham kept a Buy rating on Carvana Co. (NYSE: CVNA) stock and increased the price target to $400 from $325, appreciating the company’s second quarter results of 2021.
Our data shows that Tiger Global Management LLC is one of the biggest stakeholders of Carvana Co. (NYSE: CVNA) with 6.4 million shares worth $1.9 billion.
At the end of the second quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $8.9 billion in Carvana Co. (NYSE: CVNA), down from 64 the preceding quarter worth $7.5 billion.
2. Herbalife Nutrition Ltd. (NYSE:HLF)
Alua Capital Management Stake Value: $274.9 million
Percentage of Alua Capital Management’ 13F Portfolio: 14.32%
No. of Hedge Fund Holders: 40
Herbalife Nutrition Ltd. (NYSE: HLF), headquartered in Los Angeles, California, is a nutrition company. The company offers services like weight management, sports and fitness, targeted nutrition, healthy meals and snacks and personal care products. The company is second on our list of top stock picks of Tom Purcell’s Alua Capital Management.
The company has a market cap of $4.9 billion. In the second quarter of 2021 Herbalife Nutrition Ltd. (NYSE: HLF) reported an EPS of $1.52, beating estimates by $0.24. The company’s revenue in the second quarter came in at $1.55 billion, an increase of 14.8% year over year.
On September 15, investment advisory B. Riley kept a Buy rating on Herbalife Nutrition Ltd. (NYSE: HLF) stock and lowered the price target from $70 to $ 61, quoting that the company’s valuation was attractive despite lowered estimates.
Our data shows that Renaissance Technologies is one of the biggest stakeholders of Herbalife Nutrition Ltd. (NYSE: HLF) with 8.9 million shares worth $469 million.
At the end of the second quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $2.1 billion in Herbalife Nutrition Ltd. (NYSE: HLF), same as the preceding quarter worth $1.9 billion.
Appleseed Fund, an investment management firm, published its Q2 2021 investor letter and mentioned Herbalife Nutrition Ltd. (NYSE: HLF). Here is what Appleseed Fund has to say about the company:
“For long-term investors in Appleseed Fund, Herbalife should be a familiar name, as this will now be the third time that we have purchased Herbalife shares. We only hope that the third time will be as profitable for Appleseed Fund shareholders as the first two times. For those unfamiliar with the company, Herbalife is a global marketer of nutritional products to consumers worldwide. With just 20% of revenues attributable to the United States, the company markets its products through a multi-level distributor network. The business is currently growing at a double-digit annual rate and is generating gross margins of more than 75%, making Herbalife a quickly growing and we believe an attractive business. Herbalife’s business is “capital-light,” which means that the company does not require much in the way of capital investment to grow, allowing Herbalife to generate free cash flow that can mostly be returned to shareholders. Since 2013, Herbalife has used its free cash flow to buy back its stock, resulting in a share count that has declined by more than a third since 2013. Herbalife has a clean bill of health from a regulatory standpoint; its compliance function is the gold standard within the multi-level marketing industry.
At our purchase price, Herbalife shares were trading at the same share price as 2018. The company is firing on almost all cylinders right now, but its shares are undervalued for two reasons. First, the company’s China business has been struggling. We are not so worried about Herbalife’s China business because China represents only 5.5% of company revenues. Moreover, we believe the setbacks are temporary, and management has put a plan in place to reinvigorate revenue growth in China. Second, investors are worried that the company’s growth rate will be harmed as the economy opens up again. We conservatively assume that the company’s long-term growth rate will be 5% per annum, which is quite a bit lower than the 19% growth rate that Herbalife posted in Q1 2021. However, even assuming a 5% growth rate, Herbalife shares are significantly undervalued. Herbalife was trading at less than 10x earnings per share when we bought the stock, which represented an outstanding bargain, in our view.”
1. Sea Limited (NYSE:SE)
Alua Capital Management Stake Value: $290.3 million
Percentage of Alua Capital Management’ 13F Portfolio: 15.12%
No. of Hedge Fund Holders: 104
Sea Limited (NYSE: SE), headquartered in Singapore, is a gaming and e-commerce company. The company provides electronic commerce, digital entertainment and digital financial services through its integrated platform. Sea Limited (NYSE: SE) stands first on our list of top stock picks of Tom Purcell’s Alua Capital Management.
The company has a market cap of $175 billion. In the second quarter of 2021 Sea Limited (NYSE: SE) reported an EPS of -$0.61, beating estimates by $0.07.
On September 15, investment advisory Stifel upgraded Sea Limited (NYSE: SE) stock to Buy from Hold rating and increased the price target to $400 from $325, appreciating the company’s growth potential.
Our data shows that Aubrey Capital Management is one of the biggest stakeholders of Sea Limited (NYSE: SE) with 218,115 shares worth $59.9 billion.
At the end of the second quarter of 2021, 104 hedge funds in the database of Insider Monkey held stakes worth $12.2 billion in Sea Limited (NYSE: SE), up from 98 the preceding quarter worth $10.4 billion.
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