In this article article, we reviewed Jay Chen’s investment philosophy and portfolio management strategies. We also examined 10 growth stocks to buy according to Jay Chen’s Himension Capital.
Jay Chen, the founder of the Chinese investment bank CVCapital as well as the fintech company CVInfo, has been managing the Singapore-based Himension Capital since August of last year. In order to generate absolute returns, Jay Chen’s Himension Capital focuses on companies that benefit from emerging technologies or business innovations. Using this approach, Himension maintains long-term positions in underappreciated mid to large-size companies that have the potential to become industry titans and make outsized returns for investors.
Founded in 2018, Himension Capital’s 13F securities portfolio value exploded to over $1 billion as of the end of June quarter from $463 million in the prior quarter, driven mostly by new investments in growth stocks. In addition to initiating new positions in growth stocks such as CRISPR Therapeutics AG (NASDAQ:CRSP), Coinbase Global, Inc. (NASDAQ:COIN), and Coupa Software Incorporated (NASDAQ:COUP), the firm also substantially lifted its existing positions in fast-growing companies like Tesla, Inc. (NASDAQ:TSLA) and Intellia Therapeutics, Inc. (NASDAQ:NTLA).
Chen’s enthusiasm for growth stocks doesn’t end here as his hedge fund substantially increased its stake in its top five stock holdings. These stocks made up over 70% of the 13F portfolio at the end of the second quarter. Among the biggest position increases he made were 460% in Roblox Corporation (NYSE:RBLX) and 92% in Shopify Inc. (NYSE:SHOP) and 87% in Teladoc Health, Inc. (NYSE:TDOC).
As of the end of the second quarter, the video game developer Roblox Corporation (NYSE:RBLX) accounted for 16.34% of Himension Capital’s portfolio. The enthusiasm of hedge funds towards Roblox Corporation (NYSE:RBLX) has increased dramatically since the company debuted on the New York Stock Exchange. Of the 873 hedge funds tracked by Insider Monkey, 49 were bullish on the video gaming developer compared to 45 positions in the March quarter.
Canada-based Shopify Inc. (NYSE:SHOP), which extended its stunning share price performance into 2021, represented 15.46% of Jay Chen’s hedge fund’s second-quarter 13F portfolio. The stock price of Shopify Inc. (NYSE:SHOP) surged 32.45% in the last six months compared to the S&P 500 growth of around 9.50%.
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Our Methodology
Let’s start examining the 10 growth stocks to buy according to Jay Chen’s Himension Capital. For this article, we analyzed top growth stocks from Himension Capital’s 13F portfolio as of the end of the second quarter.
Why pay attention to hedge fund sentiment while choosing stocks? 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 86 percentage points since March 2017. Between March 2017 and October 8th 2021, our monthly newsletter’s stock picks returned 190%, vs. 100% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by 90 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Growth Stocks to Buy According to Jay Chen’s Himension Capital
10. CRISPR Therapeutics AG (NASDAQ:CRSP)
Himension Capital’s Stake Value: $25.5 million
Percentage of Himension Capital’s 13F Portfolio: 2.47%
Number of Hedge Fund Holders: 34
CRISPR Therapeutics AG (NASDAQ:CRSP), a gene-editing company, is one of the best growth stocks to buy on the dip. Its share price surged from $16 in 2016 and reached an all-time high of $220 at the beginning of this year before experiencing a sharp sell-off in the past six months amid broader market trends and analysts’ mixed views about allogeneic CAR-T therapy. Piper Sandler analyst Edward Tenthoff provided an overweight rating with a $180 price target, urging investors to buy the dip in CRISPR Therapeutics AG (NASDAQ:CRSP) stock.
Hedge funds sentiment also increased in CRISPR Therapeutics AG (NASDAQ:CRSP). Of the 873 elite funds tracked by Insider Monkey, 34 were bullish on the company compared to 29 bullish positions in the prior quarter. Popular funds such as Catherine D. Wood’s ARK Investment Management were the leading stakeholder in the company while John Overdeck and David Siegel’s Two Sigma Advisors is the second-largest shareholder of CRISPR Therapeutics AG (NASDAQ:CRSP).
Like CRISPR Therapeutics AG (NASDAQ:CRSP), Catherine D. Wood’s ARK Investment Management has been holding stakes in Roblox Corporation (NYSE:RBLX) and Shopify Inc. (NYSE:SHOP) and Teladoc Health, Inc. (NYSE:TDOC).
9. Coinbase Global, Inc. (NASDAQ:COIN)
Himension Capital’s Stake Value: $33.4 million
Percentage of Himension Capital’s 13F Portfolio: 3.24%
Number of Hedge Fund Holders: 49
The largest US-based cryptocurrency exchange, Coinbase Global, Inc. (NASDAQ:COIN), is one of the top growth stocks to buy amid expectations for further crypto mainstream adoption. The market cap for the nascent market topped $2.65 trillion for the first time in history, while bitcoin reached a new all-time high above $66,000. Recent gains are attributed to the launch of the first U.S. bitcoin exchange-traded fund (ETF), ProShares Bitcoin Strategy ETF, which investors believe could pave the way for the approval of a spot bitcoin ETF.
The performance of Coinbase Global is directly correlated to the growth in the overall crypto market. Elite funds including Catherine D. Wood’s ARK Investment Management piled up large stakes in Coinbase Global, Inc. (NASDAQ:COIN) on its debut on NASDAQ in April this year. The number of long hedge funds positions stood at 49 in Coinbase Global, Inc. (NASDAQ:COIN) at the end of the second quarter.
Like Roblox Corporation (NYSE:RBLX), Shopify Inc. (NYSE:SHOP) and Teladoc Health, Inc. (NYSE:TDOC), Coinbase Global, Inc. (NASDAQ:COIN) is a disruptive technology company with a potential for generating outsized returns for investors in the years ahead.
8. Coupa Software Incorporated (NASDAQ:COUP)
Himension Capital’s Stake Value: $35.6 million
Percentage of Himension Capital’s 13F Portfolio: 3.45%
Number of Hedge Fund Holders: 54
Jay Chen took advantage of the dip in Coupa Software Incorporated’s (NASDAQ:COUP) stock price as an entry point. After hitting an all-time high of $377 a share earlier this year, shares of Coupa Software Incorporated (NASDAQ:COUP) fell back to $250 range amid a broader market downturn for growth stocks. Himension Capital bought 135,900 shares of the spend management platform during the second quarter.
In their second quarter investor letter, Artisan Partners stated that Coupa Software Incorporated (NASDAQ: COUP) is set to disrupt the B2B market. Here is what Artisan Partners stated about Coupa Software Incorporated (NASDAQ: COUP).
“Coupa is a leading provider of cloud-based business spend management software. The company helps over 1,400 customers process over $2 trillion in annual spend across more than 5 million suppliers. We initiated our position in Q4 2020 as we anticipated Coupa Pay—a recently introduced set of cloud services seeking to process B2B payments (not just invoices) across its large network— was on the cusp of a compelling profit cycle. B2B payments have seen far less innovation in recent years compared to B2C (PayPal, Venmo, Square), and we believed Coupa was well-positioned to disrupt this market. However, the company has made several acquisitions recently, which we believe will require substantial operational focus and inhibit the company from aggressively pursuing the B2B payments opportunity over the near to intermediate term. With our thesis stalled, we exited our position.”
7. Tesla, Inc. (NASDAQ:TSLA)
Himension Capital’s Stake Value: $42.8 million
Percentage of Himension Capital’s 13F Portfolio: 4.16%
Number of Hedge Fund Holders: 60
Jay Chen’s Himension Capital also used the share price dip in Tesla, Inc. (NASDAQ:TSLA) stock price as a buying opportunity. His firm lifted its existing stake by 189% to over 63,000 shares. Since the beginning of the second half of 2021, shares of Tesla, Inc. (NASDAQ:TSLA) have rebounded strongly and reached an all-time high of $900 a share. The upward momentum is backed by strong operational and financial performance, with record third-quarter revenue and profits. The automaker reported a 64% year-over-year increase in vehicle production growth in Q3 while vehicle deliveries jumped 73%.
Compared to Roblox Corporation (NYSE:RBLX), Shopify Inc. (NYSE:SHOP), Teladoc Health, Inc. (NYSE:TDOC), and Coinbase Global, Inc. (NASDAQ:COIN), Tesla will benefit significantly from the world’s shift to clean energy to meet carbon emission targets contained in the Paris climate accord, a global treaty on climate change signed in 2015.
In the third quarter investor letter, Worm Capital LLC, an investment management firm, highlighted the confidence in the company’s business model and growing margins. Here is what Worm Capital LLC said:
“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…” (Click here to see the full text)
6. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Himension Capital’s Stake Value: $48.6 million
Percentage of Himension Capital’s 13F Portfolio: 4.72%
Number of Hedge Fund Holders: 41
Jay Chen’s strategy of increasing his firm’s stake in Intellia Therapeutics, Inc. (NASDAQ:NTLA) by almost 1200% seems to be working. Shares of Intellia Therapeutics, Inc. (NASDAQ:NTLA) surged 76% in the last six months alone, extending the twelve months gain to 430%. Intellia Therapeutics, Inc. (NASDAQ:NTLA) plans to initiate first-in-human studies for both NTLA-2002 for hereditary angioedema and NTLA-5001 for acute myeloid leukemia this year.
Like CRISPR Therapeutics AG (NASDAQ:CRSP), Roblox Corporation (NYSE:RBLX), Shopify Inc. (NYSE:SHOP), Teladoc Health, Inc. (NYSE:TDOC) and Tesla, Inc. (NASDAQ:TSLA), Intellia Therapeutics, Inc. (NASDAQ:NTLA) is one of the top growth stocks to buy and hold for the long-term gains.
In the second quarter investor letter, Carillon Tower Advisers, an investment management firm, expressed confidence in the ongoing phase 1 clinical study of Intellia Therapeutics, Inc. (NASDAQ:NTLA) in vivo gene editing candidate. Here is what Carillon Tower Advisers stated about Intellia Therapeutics, Inc. (NASDAQ:NTLA).
“Intellia Therapeutics is a clinical-stage genome editing company focused on the development of proprietary, potentially curative therapeutics. The company’s stock soared after announcing positive interim data from an ongoing phase 1 clinical study of its in vivo gene editing candidate, which is being developed as a single-dose treatment for hereditary transthyretin (ATTR) amyloidosis. This specific form of therapy would be the first of its kind resulting in the precision editing of a gene in a target tissue in the human body.”
5. Sea Limited (NYSE:SE)
Himension Capital’s Stake Value: $91.1 million
Percentage of Himension Capital’s 13F Portfolio: 8.85%
Number of Hedge Fund Holders: 104
Sea Limited (NYSE:SE) is among the top growth stocks that have extended the share price momentum even in the post-pandemic situation. The company’s share price surged 78% so far this year, driven by its expansion plans along with robust growth in the gaming market. The company is working on plans of raising more than $6 billion for business expansion. Jay Chen’s Himension Capital lifted its existing position in Sea Limited by 61% to 8.85% of the entire portfolio.
In the second quarter investor letter, Tao Value, an investment management firm, stated that Sea continued to execute above expectation. Here is what Tao Value said about Sea Limited:
“Sea continued to execute above expectation. The gaming business continued strong momentum, recording bookings of $1.1 billion, growing 117% y-o-y. The major franchise Free Fire showed no sign of slowing down in established ASEAN & LatAm markets and received positive reception from new markets like the US. On the e-commerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now the top downloaded e-commerce app in Brazil, almost 2x of the second-place local leader Mercado Libre (MELI). I also see the most promising development is in its FinTech business – SeaMoney, which more than doubled its revenue in Q1 2021 from the previous quarter! With online lending products rolling out, SeaMoney is poised to grow rapidly, becoming the 3rd growth curve for Sea.”
4. Teladoc Health, Inc. (NYSE:TDOC)
Himension Capital’s Stake Value: $132.2 million
Percentage of Himension Capital’s 13F Portfolio: 12.84%
Number of Hedge Fund Holders: 43
Jay Chen’s Himension Capital raised its stake in Teladoc Health, Inc. (NYSE:TDOC) by 87% to around 795,000 shares during the second quarter. The shares of the $22 billion virtual healthcare service company have been under pressure over the last couple of months amid short-term headwinds. Nevertheless, disruptive technology investors like Catherine D. Wood’s ARK Investment Management see the dip in share price as a buying opportunity.
The number of bullish hedge fund positions rose by 1 in recent months. Teladoc Health was in 43 hedge funds’ portfolios at the end of the second quarter of 2021 compared to 42 positions in the prior quarter.
3. Shopify Inc. (NYSE:SHOP)
Himension Capital’s Stake Value: $159.3 million
Percentage of Himension Capital’s 13F Portfolio: 15.46%
Number of Hedge Fund Holders: 85
Jay Chen’s firm doubled down its position in Shopify Inc. (NYSE:SHOP) during the second quarter of 2020. His strategy appears to be working once again as shares of the e-commerce platform have extended the upside momentum into 2021, with shares up 25% so far this year amid robust financial numbers. The company’s subscription solutions revenue grew 70% year-over-year in the second quarter while merchant solutions revenue soared 52%. Moreover, the company expects its full-year 2021 adjusted operating income to top the level achieved in 2020.
In the second quarter investor letter, ClearBridge Investments, an investment management firm, mentioned a few stocks including Shopify. Here is what ClearBridge Investments stated:
“Shopify (is one of the) companies that have become go-to platforms for small and medium-size businesses (SMBs) engaged in e-commerce and social media marketing, rebounded strongly in the quarter after being caught in the selloff among high-multiple growth names since Vaccine Monday. These and the portfolio’s other disruptors had thrived through the first part of the pandemic, leading us to trim positions into strength and reallocate cash into more attractively priced evolving opportunities and steady compounders that had been overly punished by lockdowns and a drop in economic activity.”
2. Roblox Corporation (NYSE:RBLX)
Himension Capital’s Stake Value: $168.3 million
Percentage of Himension Capital’s 13F Portfolio: 16.34%
Number of Hedge Fund Holders: 49
Jay Chen’s hedge fund first initiated a position in Roblox Corporation (NYSE:RBLX) on its debut on NASDAQ in the first quarter of 2021 and lifted that position by 460% during the second quarter. The company’s growth strategy is likely to add to investors’ sentiments. The online entertainment platform reported a 127% increase in third-quarter revenue compared to the prior quarter, while free cash flows grew 70% over the same time period.
In the second quarter investor letter, Guardian Fund, an investment management firm, stated that growth opportunities for the Roblox platform are massive.
“The wonder-tale stories of children’s books show us that there are infinite possibilities of stories and worlds. The metaverse, the idea that describes the shared 3D spaces in a virtual universe, is enabling people to create fiction. Over the past six months, we initiated a new investment in Roblox. The firm was founded in 1989 by David Baszucki and Erik Kassel when they programmed a physics lab where students could study how cars would crash.
Today, Roblox has become a leading platform with a mission to build a human co-experience that enables billions of users to play, learn, and build friendships in the metaverse. Recent advances in cloud computing, computing devices, and machine learning, enable the materialization of the metaverse. Take what we have in virtual reality today and fast-forward a few decades. Humans will be able to experience unimaginable things and in a couple of millennia virtual economies are likely to become bigger than the physical trade on planet Earth.
Over the first quarter of 2021, Roblox reported 140% revenue growth, 42.1 million daily active users, and 9.7 billion engaged hours. The opportunity for this platform is massive.”
1. DoorDash, Inc. (NYSE:DASH)
Himension Capital’s Stake Value: $204.4 million
Percentage of Himension Capital’s 13F Portfolio: 19.85%
Number of Hedge Fund Holders: 45
DoorDash, Inc. (NYSE:DASH), a logistics platform that connects merchants, consumers, and dashers, is the largest stock holding Jay Chen’s Himension Capital, according to second-quarter filings. Furthermore, it appears that the Singapore-based hedge fund is benefiting from its big bet on DoorDash as shares of the company have rallied 49% so far in 2021.
Of the 873 hedge funds tracked by Insider Monkey DoorDash, Inc. (NYSE:DASH) was in 45 hedge funds’ portfolios at the end of the second quarter of 2021 compared to 38 positions in the prior quarter. Chase Coleman’s Tiger Global Management LLC and Philippe Laffont’s Coatue Management are among the leading shareholders in the company.
You can also take a look at Top Investors’ Stock Portfolio: 10 Mid-cap Stocks To Buy and Mark Cuban Stock Portfolio: 10 Stocks To Consider.
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Disclosure: None. 10 Stocks to Buy According to Jay Chen’s Himension Capital is originally published on Insider Monkey.
