In this article, we will discuss the 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. If you want to skip our detailed analysis of Lemann’s history, investment philosophy, and hedge fund performance, go directly to the 5 Best Stocks to Buy according to Brazilian Billionaire Jorge Paulo Lemann.
Jorge Paulo Lemann is a Brazilian billionaire investment banker and entrepreneur with Brazilian as well as Swiss citizenship. 3G Capital was established in 2004 by Jorge Paulo Lemann. Jorge Lemann’s net assets value is more than $10 billion. 3G Capital is administered by Alexandre Behring, who joined the firm in 2005.
The Brazilian billionaire, Jorge Paulo Lemann, is persistently influencing investors with his market-beating portfolio management policies. His hedge fund 3G Capital generated solid earnings in 2020 amid investments in infotech and consumer discretionary stocks. 3G Capital has extended its policy of retaining leading positions in robust growth stocks in 2021 despite other manager’s move towards value stocks. The hedge fund trimmed its stakes in communications stocks close to 4% of the overall portfolio at the end of Q4 2020 compared to almost 70% of portfolio weighting in the last year period. Moreover, he started betting on consumers’ shift to online payments platforms by initiating a big position in Square (NASDAQ: SQ). The hedge fund’s 13F portfolio is valued at approximately $269.32 million as of the end of the first quarter of 2021.
As of the first quarter of 2021, 3G Capital holds stocks in several big companies like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and Square, Inc. (NYSE: SQ).
Amazon.com, Inc. (NASDAQ: AMZN) is an American multinational technology company. Amazon shares have returned 21.17% to investors over the course of the past 12 months. On June 29, Amazon.com, Inc. (NASDAQ: AMZN) obtained “SmartLess” rights in a three-year agreement for $60-$80 million in its current podcast push. From August, fresh episodes will surface on Amazon Music and Amazon-possessed Wondery a week before striking other podcast outlets. On July 19, Mizuho analyst James Lee maintained a “Buy” rating on Amazon.com, Inc. (NASDAQ: AMZN) with a $4,400 price target. 3G Capital holds 3,200 shares in the company worth over $9 million, representing 3.67% of their portfolio. Lemann’s hedge fund increased its stake in the company by 34% in the first quarter.
Microsoft Corporation (NASDAQ: MSFT) is a multinational tech company. Microsoft currently has a $2.16 trillion market capitalization and was able to deliver a 43.77% return in the past 12 months. On July 11, Microsoft Corporation (NASDAQ: MSFT) has decided to acquire security software maker RiskIQ for an amount exceeding $500 million. In addition, Microsoft has been adding safety features to products such as Windows and Azure cloud services to prevent cyberattacks on networks. On July 23, Barclays analyst Raimo Lenschow raised the price target on Microsoft to $325 from $288 and maintained an “Overweight” rating. On June 16, Microsoft Corporation (NASDAQ: MSFT) declared a quarterly dividend of $0.56 per share, in line with the previous. 3G Capital holds 30,000 shares in the tech firm worth over $7 million, representing 2.62% of their investment portfolio.
Based on the latest 13F holdings for the first quarter of 2021, 3G Capital owns 85,000 shares in Square, Inc. (NYSE: SQ) after increasing its stake in the company by 127% from Q4 2020. On July 20, Square, Inc. added Square Banking to Square Financial Services. Square Banking includes three FDIC-insured main products that will help small firms administer cash flows all in the same place. On June 24, Christopher Brendler initiated a coverage on Square, Inc. (NYSE: SQ) with a “Buy” rating with a price target of $275. In addition, hedge funds are loading up on Square, Inc. (NYSE: SQ), as Insider Monkey’s data shows that 92 hedge funds held stakes in the company in the first quarter of 2021, compared to 89 funds a quarter earlier.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. We used Lemann’s 13F portfolio for the first quarter for this analysis.
Best Stocks to Buy According to Brazilian Billionaire Jorge Paulo Lemann
10. nCino, Inc. (NASDAQ: NCNO)
Lemann’s Stake Value: $1,668,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 0.61%
Number of Hedge Fund Holders: 21
nCino, Inc. (NASDAQ: NCNO) is a financial technology company. It was founded in 2011 and is placed tenth on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. nCino currently has a $6.46 billion market capitalization.
On June 2, nCino, Inc. (NASDAQ: NCNO) posted earnings for the first quarter of 2021. It reported earnings per share of -$0.04, beating market predictions by $0.01. The revenue for the first three months of 2021 was $62.4 million, beating the estimates by $3.04 million. In addition, subscription revenues was $51.0 million, up 47% from last year. On July 16, William Blair analyst Robert Napoli initiated a coverage of nCino with an “Outperform” rating and no price target.
3G Capital holds 25,000 shares in the company worth $1.67 million, representing 0.61% of their portfolio. Out of the hedge funds being tracked by Insider Monkey, HMI Capital is a leading shareholder in nCino, Inc. (NASDAQ: NCNO), with 2.39 million shares worth more than $159 million.
Just like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and Square, Inc. (NYSE: SQ), nCino, Inc. (NASDAQ: NCNO) is one of the best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann.
9. DoorDash, Inc. (NYSE: DASH)
Lemann’s Stake Value: $3,934,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 1.46%
Number of Hedge Fund Holders: 38
DoorDash, Inc. (NYSE: DASH) functions as an online food ordering and food delivery platform. It is the largest food supply company in the United States. It was incorporated in 2013 and stands ninth on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. DoorDash shares have offered investors returns exceeding 32% over the course of the past 12 months.
On June 21, DoorDash, Inc. (NYSE: DASH) announced an alliance with Albertsons Companies, Inc. (NYSE: ACI) to offer on-demand foodstuff delivery from nearly 2K shops in the U.S. Albertsons will offer above 40K grocery items from stores for delivery via DoorDash. On June 29, Wells Fargo analyst Brian Fitzgerald raised the price target on DoorDash to $215 from $170 and maintained an “Overweight” rating on the shares. On May 13, DoorDash, Inc. (NYSE: DASH) posted earnings results for the first three months of 2021. The earnings per share was -$0.34, missing market predictions by $0.11. The revenue over the period was $1.1 billion, beating the estimates by $102.04 million.
3G Capital holds 30,000 shares in the firm worth over $3 million. This represents 1.46% of their portfolio. The hedge fund’s stake in DoorDash, Inc. (NYSE: DASH) stock increased by 29,900% in the past few months, the latest data reveals. The biggest stakeholder of the company is Coatue Management, with 9.26 million shares worth $1.21billion.
Just like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and Square, Inc. (NYSE: SQ), DoorDash, Inc. (NYSE: DASH) is one of the best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann.
8. ZoomInfo Technologies Inc. (NASDAQ: ZI)
Lemann’s Stake Value: $4,890,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 1.81%
Number of Hedge Fund Holders: 24
ZoomInfo Technologies Inc. (NASDAQ: ZI) operates a cloud-based intelligence platform for merchandising teams. The company was founded in 2007 and stands eighth on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. ZoomInfo shares have gained about 35.99% in value over the last 12 months.
On July 14, ZoomInfo Technologies Inc. (NASDAQ: ZI) indirect subsidiary announced that it issued 3.875% senior unsecured notes due 2029, whose principal amount is $300 million. The proceeds will be used to repay outstanding borrowings and for general corporate purposes. On July 13, ZoomInfo decided to acquire Chorus.ai, a conversation intelligence company. ZoomInfo agreed to obtain the assets and specified liabilities of Chorus for about $575 million in cash, which includes tax benefit related to the asset procurement of over $100 million. On July 16, Stifel analyst J. Parker Lane kept a “Buy” rating on ZoomInfo Technologies Inc. (NASDAQ: ZI) with a price target of $65.
Jorge Paulo Lemann’s 3G Capital owns 100,000 shares of ZoomInfo Technologies Inc. (NASDAQ: ZI), worth $4.89 million. Alkeon Capital Management, with 1.44 million shares, is the biggest stakeholder in the company. Just like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and Square, Inc. (NYSE: SQ), ZoomInfo Technologies Inc. (NASDAQ: ZI) is one of the best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann.
7. ServiceNow, Inc. (NYSE: NOW)
Lemann’s Stake Value: $7,252,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 2.69%
Number of Hedge Fund Holders: 98
ServiceNow, Inc. (NYSE: NOW) is an American software company that develops cloud computing platforms. The company was previously known as Service-now.com. ServiceNow was incorporated in 2004 and stands seventh on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. ServiceNow shares have returned 37.86% to investors during the course of the past 12 months.
On April 28, ServiceNow, Inc. (NYSE: NOW) posted earnings for the first quarter of 2021. It reported earnings per share of $1.52, beating market predictions by $0.17. The revenue for the first three months of 2021 was over $1.36 billion, up 30.8% YoY, beating the estimates by $20 million. On July 16, Mizuho analyst Gregg Moskowitz raised the price target on ServiceNow to $640 from $590 and maintained a “Buy” rating on the shares.
The hedge fund managed by Jorge Paulo Lemann owns 14,500 shares in the tech company worth over $7 million, representing close to 2.69% of their portfolio. In addition, hedge fund sentiment increased for ServiceNow, Inc. (NYSE: NOW) in the first quarter of 2021. Insider Monkey’s data shows that 98 elite hedge funds held stakes in the company in the first quarter of 2021, up from 96 funds a quarter earlier. Just like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and Square, Inc. (NYSE: SQ), ServiceNow, Inc. (NYSE: NOW) is one of the best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann.
Palm Capital, in their first quarter 2021 investor letter, mentioned ServiceNow, Inc. (NYSE: NOW). Here is what the fund said:
“ServiceNow provides software solutions to structure and automate various task and processes for large businesses. The company began in 2004 with a solution to help businesses manage the IT services they offer employees and customers. Unlike the existing solutions in the market, ServiceNow’s offering was built using modern architecture that was flexible, modular, and user-friendly. And it left the incumbents – large companies such as BMC, IBM and MicroFocus – playing catch up.
As the company grew to dominate this market, it saw the opportunity to expand its offering to include the broader task of IT Operations Management – or the monitoring and control of an entire business’s IT infrastructure. And over time its success in improving productivity and user experience in IT resulted in customers asking the company to expand its offering into other business workflows including HR Management and Customer Services – which it has since done…” (Click here to see the full text)
6. Snowflake Inc. (NYSE: SNOW)
Lemann’s Stake Value: $9,171,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 3.4%
Number of Hedge Fund Holders: 71
Snowflake Inc. (NYSE: SNOW) provides a cloud-based data platform. It was incorporated in 2012 and ranks sixth on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. Snowflake shares have offered 12.43% in returns to investors over the course of the past 3 months.
On June 14, Deutsche Bank analyst Patrick Colville raised the price target on Snowflake to $265 from $248 and kept a “Buy” rating on the shares. On May 26, Snowflake Inc. (NYSE: SNOW) posted earnings for the first quarter of 2021. It reported earnings per share of -$0.70, missing market predictions by $0.19. The revenue for the first three months of 2021 was $228.9 million, up 110.4% YoY, beating the estimates by $15.54 million. Product revenue for the first quarter of 2021 was $213.8 million, up 110% year-over-year.
Jorge Paulo Lemann’s 3G Capital currently owns 40,000 shares of Snowflake Inc. (NYSE: SNOW) worth $9.17 million. Snowflake occupies 3.4% of 3G Capital’s overall equity. At the end of the first quarter of 2021, 71 hedge funds in the database of Insider Monkey held stakes worth $12.97 billion in Snowflake, up from 54 the preceding quarter worth $7.72 billion.
Just like Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), and Square, Inc. (NYSE: SQ), Snowflake Inc. (NYSE: SNOW) is one of the best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann.
In its first quarter 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks, and Snowflake Inc. (NYSE: SNOW) was one of them. Here is what the fund said:
“We also established a position in Snowflake during the quarter. Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a-service.” The data warehousing market—created by the massive, growing amount of user, customer, and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.
Snowflake requires absolutely no infrastructure management from its users, is fully scalable for each customer, runs on Amazon, Microsoft, or Google cloud platforms, and most critically, Snowflake helps companies analyze their data. The company also has a unique, customer-aligned billing model based on usage. All of which has led to Snowflake being among the leaders of this highly fragmented market, posting 124% revenue growth last year. SNOW’s growth comes from the combination of more customers—which grew 73% last year—and customers buying more services—the company boasts an amazing 150%+ net customer retention. The company’s growing scale has also led to increasing gross margin and operating leverage, up 1,100 basis points and 8,200 basis points, respectively, over the past two years. The company has guided to FCF break-even this year, and with the company’s capital expenditure-light model—Snowflake uses the public cloud for hosting—we expect FCF to grow much faster than revenue growth, which we forecast to grow comfortably more than 50% per year for the next several years. Additionally, we have great confidence in the SNOW management team, which previously had an enormously successful run guiding one of our other core Cloud software holdings ServiceNow.”
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Disclosure: None. 10 Best Stocks to Buy According to Brazilian Billionaire Jorge Paulo Lemann is originally published on Insider Monkey.
