In this article, we discuss 10 stocks to buy based on Michael Pausic’s Foxhaven Asset Management portfolio. If you want to skip our detailed analysis of these stocks, go straight to the 5 stocks to buy according to Michael Pausic’s Foxhaven asset management portfolio.
Michael Pausic is co-founder and portfolio manager of Foxhaven Asset Management. Pausic began his career as a media and communications banker. Prior to that, he earned his BS in Engineering from the University of Virginia in 1986 and his MBA from Duke University Fuqua School of Business in 1989.
Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN) and Visa Inc. (NYSE:V) are some of the notable names in Foxhaven Asset Management’s portfolio. These three companies make up approximately 25.37% of the fund’s portfolio, and Meta Platforms, Inc. (NASDAQ: FB) is the company’s largest holding.
Our Methodology
Here’s our list of 10 stocks to buy based on Michael Pausic’s Foxhaven Asset Management portfolio. These were selected from Foxhaven Asset Management’s portfolio at the end of Q3 2021.
10 stocks to buy based on Michael Pausic’s Foxhaven Asset Management portfolio
10. Hilton Worldwide Holdings Inc. (NYSE: HLT)
Value of Foxhaven Asset Management stake: $162.9 million
Percentage of Foxhaven Asset Management’s 13F portfolio: 4.69%
Number of hedge fund holders: 44
Hilton Worldwide Holdings Inc. (NYSE: HLT) is a multinational hospitality company headquartered in Virginia, USA. The company has around 6500 locations worldwide and around 18 different brands covering different market segments.
On Oct. 10, BMO Capital analyst Ari Klein raised Hilton Worldwide Holdings Inc.’s (NYSE:HLT) price target from $135 to $144, retaining a market performance rating. The company suffered a small downfall during the pandemic; however, analysts are bullish on the company’s recovery.
Hilton Worldwide Holdings Inc. (NYSE: HLT) is a Foxhaven Asset Management top pick along with Meta Platforms, Inc. (NASDAQ: FB), Amazon.com, Inc. (NASDAQ: AMZN) and Visa Inc. (NYSE :V).
Pershing Square Holdings, Ltd. mentioned Hilton Worldwide Holdings Inc. (NYSE: HLT) in its letter to investors for the second quarter of 2021. Here is what the firm had to say:
“While the hospitality industry has been extremely impacted by the COVID-19 pandemic, Hilton has done an excellent job of managing industry volatility, which is a testament to the high-quality, asset-light, margin-based business model high and the company’s superb management team. From the onset of the pandemic, Hilton’s management team took decisive action to ensure that the company not only ran what it knew to be challenging times, but also positioned the business to generate improved margins, cash flow and returns on investment once business returns to pre-COVID-19 demand levels.
Industry RevPAR (the industry measure for same-store sales at a given hotel) bottomed out in April 2020 and showed sequential improvement each quarter as travel and mobility recovered with the deployment of the COVID-19 vaccine and a resumption of travel. In recent months, there has been growing evidence that a robust recovery scenario is underway, led by domestic leisure travel opportunities currently trending above 2019 demand levels. For all three first weeks of July, the most recent data provided by the company, RevPAR has already recovered 85% of 2019 levels – a significant improvement over previous months thanks to increased hotel occupancy and a recovery fast rate.
While management anticipates a moderation in leisure demand at the end of the summer, it expects the moderation in leisure travel to be offset by a more pronounced recovery in occasional business travel. when the offices reopen this fall. Although there remains short-term uncertainty in domestic travel given the increase in the number of COVID-19 cases following the arrival of the Delta variant in the United States, we believe that the medium-term outlook continue to point to a robust recovery scenario. Throughout the pandemic, Hilton has taken steps to reduce corporate spending by approximately 20% from 2019 levels.
Simultaneously, the company provided resources and support to the Hilton ownership community, which solidified Hilton as a preferred franchise partner, expanding Hilton’s portfolio of units worldwide.
During the last quarter, Hilton affi rmed its near- to mid-term outlook for net single-digit net unit growth and a resumption of its historic net unit growth of 6-7% from 2023-2024, growth higher than that of its competitors, and further proof of Hilton’s unique business model.
We believe Hilton will continue to grow market share over time given increased interest from independent hotels in seeking affiliation with global brands, particularly in the wake of the pandemic. Although the recovery may continue to be uneven, Hilton has made tremendous strides that will help it become an even more profitable and stronger business in the future.
9. Visa Inc. (NYSE: V)
Value of Foxhaven Asset Management stake: $166.15 million
Percentage of Foxhaven Asset Management’s 13F portfolio: 4.78%
Number of hedge fund holders: 143
Visa Inc. (NYSE:V) is a California-based multinational corporation that provides financial services primarily in electronic funds transfers worldwide. The most common forms of its products are credit, debit and prepaid cards.
According to Q3 13F filings, Foxhaven Asset Management owns 745,908 shares of Visa Inc. (NYSE:V) worth $166.5 million, or 4.78% of the fund’s portfolio.
L1 Capital mentioned Visa Inc. (NYSE:V) in its third quarter letter to investors. Here is what the firm said:
“In our view, the payment network company, Visa, remains very well positioned to participate in an ever-expanding market for electronic payments. Over time, “Buy Now, Pay Later” may have a modest impact on Visa’s transaction volumes, but overall we believe it will have the greatest effect in supporting the growth of electronic payments more broadly. . In the shorter term, we believe that the resumption of international travel as the world gradually normalizes and learns to live with COVID-19 will be significantly positive for Visa’s financial performance. E-commerce will also remain a key positive driver for Visa’s growth.
8. Pegasystems Inc. (NASDAQ: PEGA)
Value of Foxhaven Asset Management stake: $171.29 million
Percentage of Foxhaven Asset Management’s 13F portfolio: 4.93%
Number of hedge fund holders: 25
Pegasystems Inc. (NASDAQ: PEGA) is a software company primarily focused on automation, robotic process automation and artificial intelligence. The company has approximately 6,000 employees, 46 locations and more than 250 global partners around the world.
Investment management firm Carillon Tower Advisers mentioned Pegasystems Inc. (NASDAQ:PEGA) in its Q2 2021 letter to investors. Here’s what it said:
“Pegasystems develops software used to automate business tasks. The company’s AI-powered recommendations for customer service contact centers are a key growth driver, and a mix shift to cloud computing should result in higher valuation over time. Investors appreciated this momentum, pushing stocks higher. »
7. Coupang, Inc. (NYSE:CPNG)
Value of Foxhaven Asset Management stake: $255.9 million
Percentage of Foxhaven Asset Management’s 13F portfolio: 7.37%
Number of hedge fund holders: 45
Coupang, Inc. (NYSE: CPNG) is a South Korean e-commerce and digital distribution company founded in 2010. The company is South Korea’s largest online marketplace. In 2021, Coupang, Inc. (NYSE: CPNG) announced the expansion of its operations in Japan and Taiwan.
In 2020, Coupang, Inc. (NYSE: CPNG) was the fastest growing company among 250 retailers globally.
In the third quarter of 2021, Coupang, Inc. (NYSE: CPNG) experienced some capacity limitations due to the warehouse fire and COVID-related costs. On Nov. 15, Mizuho analyst James Lee lowered the company’s price target from $40 to $32 and gave shares of Coupang, Inc. (NYSE:CPNG) a neutral rating.
6. Intuit Inc. (NASDAQ: INTU)
Value of Foxhaven Asset Management stake: $256.1 million
Percentage of Foxhaven Asset Management’s 13F portfolio: 7.38%
Number of hedge fund holders: 64
Intuit Inc. (NASDAQ: INTU) is an American company that provides enterprise application software to its customers. The company operates in 9 countries and its main products are TurboTax, QuickBooks, Mint and Credit Karma. In Q3 2021, Intuit Inc. (NASDAQ: INTU) also acquired Mailchimp, an email marketing service, for $12 billion.
Terry Smith’s Fundsmith LLP owns the most shares of Intuit Inc. (NASDAQ: INTU), with 4.58 million shares worth $2.47 billion, representing 6.83 % of Fundsmith’s portfolio. Foxhaven Asset Management reduced its business in Intuit Inc. (NASDAQ: INTU) by 13% in the third quarter of 2021.
Cooper Investors mentioned Intuit Inc. (NASDAQ: INTU) in its third quarter 2021 letter to investors. Here’s what they said:
“The other significant transaction in the quarter was Intuit’s acquisition of Mailchimp for $12 billion. Intuit has reinvented itself over the past decade and thrived with a leadership position in QuickBooks Online, the software accounting software for small businesses (actually the “Xero of the United States”) We originally invested in Intuit in February 2020, excited about the prospects of QuickBooks.
Management has executed exceptionally well on the opportunity set which has seen the stock double since our initial purchase. However, the company has now completed two significant deals in Mailchimp and Credit Karma worth a combined US$20 billion in the past 12 months. The investment proposition has shifted from a focus on QuickBooks to a financial and small business software conglomerate. We continue to greatly admire the company, but with Intuit now trading at 50x forward earnings, we no longer see such attractive latency nor the rewards for the level of execution risk and so we left the position.
Click to read on and see 5 stocks to buy based on Michael Pausic’s Foxhaven Asset Management portfolio.
Suggested items:
Disclosure: none. 5 stocks to buy based on Michael Pausic’s Foxhaven Asset Management portfolio is originally published on Insider Monkey.
