Below we present the list of the top 5 stocks for 2022 according to Chet Kapoor’s Tenzing Global Investors. For our methodology and a more comprehensive list, go directly to Top 10 Stocks for 2022 According To Chet Kapoor’s Tenzing Global Investors.
5. Peloton Interactive, Inc. (NASDAQ:PTON)
Closing out the first part of our list of Tenzing Global’s top stocks for 2022 is fitness product manufacturer Peloton Interactive, Inc. (NASDAQ:PTON). The firm initiated a new position in the company consisting of 100,000 PTON shares valued at $8.71 million at the end of Q3.
Peloton Interactive, Inc. (NASDAQ:PTON) shares have crashed by nearly 85% from their peak in February 2021, when surging demand for their connected-fitness devices had the market salivating. The company struggled to meet the intense demand, which it compensated for by spending over $800 million to buy another fitness bike manufacturer, Precor, as well as build another new plant in Ohio.
However, with competition in the space intensifying and gyms reopening, demand for Peloton Interactive, Inc. (NASDAQ:PTON)’s equipment has begun to slacken, making those expenditures look like huge mistakes for the company. Peloton’s connected-fitness device revenue fell by 17% year-over-year in Q3 and the company has hired consulting firm McKinsey with the goal of cutting costs. Nonetheless, Tenzing clearly believes that PTON shares were a good buying opportunity and that the company will find its footing as a leader in the connected-fitness space.
Miller Value Partners, an investment management firm, published its “Miller Opportunity Equity” fourth quarter 2021 investor letter and mentioned Peloton Interactive, Inc. (NASDAQ:PTON). Here is what the fund said:
“Money losing growth stocks posted the biggest losses late in the year. Jim Cramer termed this behavior getting “pelotoned,” as Peloton is the poster child for what we experienced. At recent prices ($31.33 as of close 1/14/22), Peloton is more than 80% off its highs. It’s reversed nearly all its pandemic gains, trading at levels close to the IPO price ($29).
We previously owned Peloton, so we know the company well. We bought Peloton after the IPO based on our belief it was a misunderstood consumer brand pegged as a faddish hardware company.
It benefited enormously from the pandemic as demand surged and customer acquisition costs plummeted. We expected these dynamics to reverse as the environment normalized from stay-at-home. We sold in late 2020 because we thought it was fully valued around $100. Growing risks created a poor risk/reward.
At current prices, it’s interesting once again and we’ve resumed work on it. Market sentiment towards money losers remains quite negative. Peloton’s prospects, like others, ultimately depend on its ability to drive free cash flow over the long term. We reference Peloton because it’s an extreme example of behavior we’ve seen more broadly.”
4. Brightcove Inc. (NASDAQ:BCOV)
Former Brightcove Inc (NASDAQ:BCOV) board member Chet Kapoor remains an investor in the cloud-based video distribution platform despite his 2017 resignation from the said board, which resulted from a reported disagreement over the board’s composition and the company’s governance structure. Tenzing Global owned 3.5 million BCOV shares on September 30, selling a net total of 500,000 during the quarter and has been a shareholder of the company since Q4 of 2016.
Brightcove Inc (NASDAQ:BCOV)’s leadership instability has loomed large in the stock’s recent disappointing results, with shares down by over 50% during the last year as CEO Jeff Ray is scheduled to retire at the end of 2022. Weak guidance for the fourth quarter also dented the stock’s performance in recent weeks, as the company predicted between $51 and $52 million of revenue and 0.02 to $0.04 in earnings per share, figures which would both represent small declines from a year earlier.
Brightcove Inc (NASDAQ:BCOV) just announced that it has acquired audience insights company Wicker Labs, which will further augment Brightcove’s video analytics capabilities, which provide real-time engagement feedback to streamers.
3. Gogo Inc. (NASDAQ:GOGO)
Topping the list of Tenzing Global Investors’ top stocks for 2022 is Gogo Inc (NASDAQ:GOGO), which functions as a service provider for the airline industry. Tenzing owned 4.2 million GOGO shares on September 30, with the stock becoming its top pick for the first time.
While Gogo Inc (NASDAQ:GOGO) has a dominant position in the airline wireless communication field at present, with 80% market share, that really leaves it with nowhere to go but down, which is what Morgan Stanley is predicting as the competition begins to heat up. The investment bank believes that Gogo will control just half of the market within two years, which no doubt factors into the stock being so heavily shorted by investors and having fallen by 32% since that report.
Nonetheless, Gogo Inc (NASDAQ:GOGO) is coming off a strong third quarter in which sales rose by 31% on the strength of growing airline demand, while the company was able to increase both the number of aircraft it services as well as its average monthly revenue per aircraft. And despite Morgan Stanley’s predictions, the company believes that it will achieve a 15% compound annual growth rate through 2025.
2. Yelp Inc. (NYSE:YELP)
Tenzing has also been a shareholder of Yelp Inc (NYSE:YELP) since the final quarter of 2016, a lengthy period during which YELP shares have actually declined in value. Tenzing owned 1.76 million YELP shares at the end of Q3, being one of 26 of the hedge funds tracked by Insider Monkey to own the stock.
Yelp Inc (NYSE:YELP) shares have rebounded by 75% since the end of October 2020 on the back of stronger results in 2021 as the effect of the pandemic began to lessen and restaurant activity in particular improved. Yelp’s revenue rose by 52% during the second quarter of 2021, while its Q3 revenue of $269.1 million also topped estimates. Yelp Inc (NYSE:YELP) has also been successful when it comes to improving its bottom-line results, with past investments in its ad products paying huge dividends in recent quarters.
1. Uber Technologies, Inc. (NYSE:UBER)
Ranking second on this list is Uber Technologies, Inc. (NYSE:UBER), which Tenzing has owned since the third quarter of 2019. The money manager added another 250,000 shares of the ride-sharing operator to its 13F portfolio during Q3, lifting its holding to 1.33 million shares valued at $59.36 million.
Uber Technologies, Inc. (NYSE:UBER) has proven to be extremely popular among hedge funds over the past two years, with ownership of the stock tripling during that time. UBER shares have tumbled by 39% over the past nine months however as the company remains unable to generate net income or free cash flow.
Its food delivery and freight services may be able to help in this regard in the future, as the financials for both are improving and Uber Technologies, Inc. (NYSE:UBER)’s ride-sharing platform appears to be hitting its stride again coming out of the worst of the pandemic, with bookings hitting a record high in October. The company was also EBITDA positive in Q3 with expectations for the same in Q4.
ClearBridge Investments, an investment management firm, published its “Large Cap Growth Strategy” third quarter 2021 investor letter and mentioned Uber Technologies, Inc. (NYSE:UBER). Here is what the fund said:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
You can also take a peek at 10 Tech Stocks To Buy According To Billionaire George Soros and Analysts Think These 10 Stocks Are Overvalued.
