In this article, we discuss the top 5 stock picks in Osterweis Capital Management’s portfolio as of the end of the third quarter of 2021. If you want to read our detailed analysis of John Osterweis’ history, investment philosophy, and hedge fund performance, go directly to Was Osterweis Capital Management Right About These 10 Stocks?.
5. Amazon.com, Inc. (NASDAQ:AMZN)
Osterweis Capital Management’s Stake Value: $45.7 million
Performance of the stock over the past 12 months as of November 24: -47%
Multinational e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) has recently began making major moves in the financial technology industry, expanding its partnership with Affirm as its exclusive BNPL option through January of 2023. The company’s Amazon Pay, established in 2007, now represents its opportunity to establish itself as a fintech giant while leveraging its large amounts of data.
Osterweis Capital Management owns stakes worth $45.7 million in Amazon.com, Inc. (NASDAQ:AMZN) as of Q3. The company accounts for 2.49% of the hedge fund’s 13F portfolio.
Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what the firm has to say:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
4. Danaher Corporation (NYSE:DHR)
Osterweis Capital Management’s Stake Value: $50.7 million
Performance of the stock over the past 12 months as of November 24: -16%
Danaher Corporation (NYSE:DHR) is a Washington-based globally diversified conglomerate that is involved in the design, manufacture, and marketing of professional, medical, industrial, and commercial products and services.
On October 25, Argus analyst David Toung kept a Buy rating and $340 price target on Danaher Corporation (NYSE:DHR) after its “solid” Q3 results.
Here is what ClearBridge Investments has to say about Danaher Corporation (NYSE:DHR) in its Q2 2021 investor letter:
“Our differentiated positions in the health care sector also made strong contributions as the market began to reward the heavily discounted sector. Danaher, for example, is seeing customer activity approach pre-pandemic levels and is executing well. In addition to improving health through its life sciences (research tools for biopharmaceutical, food and beverage, medical, aerospace and microelectronics industries) and diagnostics (tools for use in labs and critical care settings) businesses, Danaher offers environmental and applied solutions that keep global food and water supplies safe.”
3. JPMorgan Chase & Co. (NYSE:JPM)
Osterweis Capital Management’s Stake Value: $53.3 million
Performance of the stock over the past 12 months as of November 24: -18%
The largest U.S. banking corporation based on total assets, JPMorgan Chase & Co. (NYSE:JPM) is a multinational financial services and investment banking firm that offers financial advisory services and solutions.
On October 25, Wells Fargo analyst Mike Mayo raised the price target on JPMorgan Chase & Co. (NYSE:JPM) to $210 from $200, and maintained an Overweight rating on the shares. The analyst cites confidence in the company’s earnings capacity and consistency.
2. Microsoft Corporation (NASDAQ:MSFT)
Osterweis Capital Management’s Stake Value: $82.2 million
Performance of the stock over the past 12 months as of November 24: -26%
As of Q3 2021, Osterweis Capital Management owns 291,806 shares in Microsoft Corporation (NASDAQ:MSFT), worth $82.2 million, representing 4.49% of the firm’s 13F portfolio.
On November 22, Wells Fargo analyst Micahel Turrin initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with an Overweight rating and $400 price target on its shares.
Here is what Polen Global Growth has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:
“After modest Portfolio activity during the second quarter of 2021, activity increased during the third quarter. We would broadly characterize the various trades into two objectives: 1) managing risk, and 2) managing valuation. In both cases, we aimed to maintain the Portfolio’s growth profile. In aggregate, we believe we were able to increase expected earnings growth while reducing risk and the overall portfolio valuation… We also trimmed Microsoft, which had grown to nearly 10% of the Portfolio. At an 8% weighting, it still represents one of our largest positions.”
1. Alphabet Inc. (NASDAQ:GOOG)
Osterweis Capital Management’s Stake Value: $104.4 million
Performance of the stock over the past 12 months as of November 24: -32%
Alphabet Inc. (NASDAQ:GOOG) is an American multinational tech conglomerate that operates as the parent company of the Google search engine, and provides online products like Google Maps and YouTube.
Osterweis Capital Management, as of the end of the third quarter, held 39,204 shares of Alphabet Inc. (NASDAQ:GOOG), amounting to more than $104.4 million in worth and accounting for 5.7% of the fund’s total portfolio value.
On November 2, Morgan Stanley analyst Brian Nowak raised the price target on Alphabet Inc. (NASDAQ:GOOG) shares to $3,200 from $3,000, and kept an Overweight rating on the shares of the company.
Here is what Giverny Capital Asset Management has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter:
“During the quarter we trimmed two positions, (which includes) Alphabet, after significant run-ups. Alphabet remains our largest holding at a 9% weight. When it rose above a 10% weight in late July, we brought it down a bit. I won’t automatically trim a position when it reaches the 10% threshold, but Alphabet nearly doubled from the summer of 2020 to 2021 and it felt responsible to take some gains.”
You can also take a look at Tech Stock Portfolio: 10 Tech Stock Picks from Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management and 10 Stocks to Buy in 2021 According to Guy Spier’s Aquamarine Capital.
