In this article, we present the list of top 10 stock picks of Ari Zweiman’s 683 Capital Partners at the end of the second quarter. If you want to skip the fund’s history, recent performance and details about its overall portfolio, please go directly to 5 Best Stocks to Buy According to Ari Zweiman’s 683 Capital Partners.
683 Capital Partners is a secretive hedge fund based out of New York. The fund and its founder Ari Zweiman have done an excellent job of shielding themselves from coverage in mainstream financial media and the unnecessary performance pressure it brings. When a fund delivers outsized returns to its investors, the mainstream media pushes it to the pedestal only to take a jibe at it in years of underperformance. 683 Capital Partners was founded by Mr. Zweiman in 2006, and as of March this year, the fund managed assets worth close to $3 billion but had only three clients. Mr. Zweiman got his undergraduate degree from Yale University. He followed it up by getting a masters in economics from Stanford University and a Juris Doctor degree (J.D.) from Harvard Law School in 1999. Before founding 683 Capital Partners, Mr. Zweiman worked at several financial institutions.
683 Capital Partners’ Portfolio
683 Capital Partners’ recent 13F filing shows that the aggregate value of its holdings dropped to $1.416 billion from $1.868 billion in the period between March 31 and June 30. During the second quarter, the fund sold its entire stake in 102 companies and reduced its holdings in 29 stocks. In addition, the fund initiated a stake in 16 stocks and made additional purchases in 43 stocks during that time. The fund’s portfolio was majorly disposed to finance and health care sectors, which accounted for nearly 47% and 21.03% of its aggregate value at the end of June. The filing also revealed that Carvana Co. (NYSE:CVNA), Enova International Inc (NYSE:ENVA), and Opendoor Technologies Inc. (NASDAQ:OPEN) continued to remain 683 Capital Partners’ most loved stocks at the end of Q2.
Photo by Yiorgos Ntrahas on Unsplash
Our Methodology
At Insider Monkey, we cover the portfolios of 895 hedge funds, closely tracking the stocks they buy and sell. We selected the ten stocks discussed in this article based on the 13F regulatory filing submitted by 683 Capital Partners with the SEC for the quarter ending June 30.
10 Best Stocks to Buy According to Ari Zweiman’s 683 Capital Partners
10. Tailwind Acquisition Corp. (NYSE:TWND)
683 Capital Partners’ Stake Value: $29,851,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.1%
Number of Hedge Fund Holders: 31
Tailwind Acquisition Corp. (NYSE:TWND) is a special purpose acquisition company (SPAC) founded in 2020. It was created with intentions to effect an asset acquisition, stock purchase, merger, capital stock exchange, reorganization, or similar business combination with one or more public or private businesses. The number of hedge funds tracked by Insider Monkey that disclosed a stake in this SPAC has increased almost consecutively every quarter to 34 at the end of June this year from 26 at the end of the first quarter of 2021.
On August 8, Colorado-based industrial laser development and manufacturing company Nuburu announced that it would go public by merging with Tailwind Acquisition Corp. (NYSE:TWND) in a deal that priced the pre-money enterprise value of the merged entity at $350 million. Tailwind Acquisition Corp. (NYSE:TWND) had tried to merge with risk analytics company Qomplx in August last year, but that deal was terminated mutually by the involved parties. After the closing of the Nuburu and Tailwind Acquisition Corp. (NYSE:TWND) deal, the former will start trading under the ticker symbol “BURU.”
9. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX)
683 Capital Partners’ Stake Value: $30,431,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.14%
Number of Hedge Fund Holders: 24
Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) is a small clinical-stage biopharmaceutical company based out of Waltham, Massachusetts, developing therapies for the treatment of cancer. It was founded in 2006 and currently employs 59 people. The popularity of Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) among smart money investors has declined considerably since the end of 2020. Only 25 of the 895 hedge funds tracked by Insider Monkey disclosed a stake in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) at the end of June 2022, down substantially from 38 funds at the end of December 2020.
Apart from 683 Capital Partners, other hedge funds tracked by us that disclosed a stake in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) at the end of June included David Witzke And Michael Gregory’s Avidity Partners Management and Samuel Isaly’s OrbiMed Advisors. For its most recent quarter, Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) announced a GAAP per share loss of $0.64 on no revenue. In its earnings release, the company also disclosed that it had cash, cash equivalents, short-term and long-term investments worth $378.9 million at the end of June.
8. Hess Corporation (NYSE:HES)
683 Capital Partners’ Stake Value: $30,998,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.18%
Number of Hedge Fund Holders: 35
This year’s surge in energy prices has propelled most oil and gas stocks, including that of Hess Corporation (NYSE:HES), which is trading up by more than 60% year-to-date. With inflation running high and the energy sector being the last refuge for investors who want to protect their portfolios, Hess Corporation (NYSE:HES) is among the best bet in the oil and gas industry. Due to this reason, Insider Monkey recently picked it in our list of 10 Best Cyclical Stocks for Inflation.
On August 29, Ari Wald, Oppenheimer’s technical analysis team analyst, released a note to clients recommending they consider investing in the oil and gas sector if they want to diversify their portfolio amid weakness in broader markets. In his note, Mr. Wald mentioned Hess Corporation (NYSE:HES) among individual stocks that investors could buy in the sector and wrote:
“We used the (energy) sector’s pullback into its rising 200-day average as an opportunity to upgrade to Overweight in July. For the iShares Oil & Gas Exploration & Production ETF (BATS:IEO), we think recent strength is marking a resumption of a larger breakout above the ETF’s 2018 peak.”
7. Lennar Corporation (NYSE:LEN) (NYSE:LEN-B)
683 Capital Partners’ Stake Value: $34,856,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.46%
Number of Hedge Fund Holders: 47
683 Capital Partners almost doubled its stake in Lennar Corporation (NYSE:LEN) during the second quarter to 493,900 class A shares. John Smith Clark’s Southpoint Capital Advisors and billionaire Cliff Asness’ AQR Capital Management were other hedge funds tracked by Insider Monkey that upped their stake in Lennar Corporation (NYSE:LEN) during that period. While Southpoint Capital Advisors boosted its stake by 67% to 1 million shares, AQR Capital Management increased it by 50% to around 1.9 million shares.
The consecutive hike in interest rates this year has also pushed mortgage rates higher, which usually doesn’t work in the favor of homebuilders like Lennar Corporation (NYSE:LEN). This could be one of the reasons why its stock has lost one-third of its value in the current year. Nonetheless, this decline in the stock price has made the stock’s dividend yield attractive at current levels. Lennar Corporation (NYSE:LEN) has been making dividend payments to its investors every year for the last 18 years and currently pays a quarterly dividend of $0.375 per share, which based on the stock’s last closing price, translates into an annual dividend yield of above 2.5%.
6. Cardlytics, Inc. (NASDAQ:CDLX)
683 Capital Partners’ Stake Value: $37,587,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.65%
Number of Hedge Fund Holders: 23
Despite 683 Capital Partners boosting its stake in Cardlytics, Inc. (NASDAQ:CDLX) by 29% during the second quarter, the company got relegated to the sixth spot in the fund’s portfolio at the end of that period, down from the third spot it held at the beginning. A large part of why that happened can be attributed to Cardlytics, Inc.’s (NASDAQ:CDLX) stock price performance this year, as the stock has lost more than 85% of its value year-to-date.
Cardlytics, Inc. (NASDAQ:CDLX) operates an advertising platform that runs on digital channels of different banks. On July 20, the company announced the appointment of its new CEO, Karim Temsamani, who worked as Head of Global Partnerships at Stripe prior to taking up this role. Earlier this month Wells Fargo analyst Jeff Cantwell released a note downgrading most stocks from the Fintech sector post a hawkish commentary from Fed chair Jerome Powell late last month. Among the stocks downgraded by Mr. Cantwell was Cardlytics, Inc. (NASDAQ:CDLX), which he downgraded to ‘Underweight’ from ‘Equal Weight.’ Mr. Cantwell also lowered his price target on the stock to $13 from $14, representing an almost negligible upside from where it currently trades.
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Disclosure: None. 10 Best Stocks to Buy According to Ari Zweiman’s 683 Capital Partners is originally published on Insider Monkey.
