In this article, we discuss 10 stocks to buy according to John Hurley’s Cavalry Asset Management.
Cavalry Asset Management is a San Francisco-based hedge fund established by John Hurley in 2003. In 1986, Hurley earned his degree from Princeton University, where he served as chairman of The Daily Princetonian. After completing his degree and being commissioned as a second lieutenant, he spent five years in the U.S. Army. Before starting Cavalry Asset Management, he worked as an analyst and portfolio manager at Fidelity Investments and as the managing partner of Bowman Capital Management after getting his MBA from the Stanford GSB in 1993.
Cavalry Asset Management invests primarily in publicly traded technology companies on behalf of prominent financial institutions, academic organizations, and family offices. It uses a variety of investment strategies, and its holdings include long/short or derivative positions in common stocks, stock warrants and rights, private or restricted securities, preferred stocks, options, swaps, other derivative instruments, debt instruments, commodities, and exchange-traded funds (ETFs).
Cavalry Asset Management’s 13F portfolio contained $1.31 billion in assets spread across 30 equities at the end of the first quarter of 2022. As of the end of the first quarter, some notable stock picks of the hedge fund include Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), QUALCOMM Incorporated (NASDAQ:QCOM), and Microsoft Corporation (NASDAQ:MSFT).
Our Methodology
With this context in mind, here is our list of 10 stocks to buy according to John Hurley’s Cavalry Asset Management. We picked these stocks from the Q1 13F portfolio of Hurley’s hedge fund. All hedge fund data is based on Insider Monkey’s exclusive list of 900+ funds that submitted 13Fs for the first quarter of 2022.
Stocks to Buy According to John Hurley’s Cavalry Asset Management
10. Juniper Networks, Inc. (NYSE:JNPR)
Cavalry Asset Management’s Stake Value: $55,314,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 4.22%
Number of Hedge Fund Holders: 35
In addition to Taiwan Semiconductor Manufacturing Company Limited, QUALCOMM Incorporated, and Microsoft Corporation, John Hurley’s Cavalry Asset Management recommends .Juniper Networks, Inc. (NYSE:JNPR), the U.S.-based producer of networking solutions. Juniper Networks, Inc. is a new arrival in Cavalry Asset Management’s portfolio, as the hedge fund bought about 1.49 million shares worth $55.3 million in Q1.
One of Australia’s top diversified real estate groups and an Australian division of the global Frasers Property Limited, Frasers Property Australia and Frasers Property Industrial announced on August 1 that they chose Juniper Networks, Inc. to upgrade their network infrastructure in order to increase their business agility and IT efficiency throughout Australia.
After Juniper Networks, Inc. reported positive sales growth in the June quarter but “disappointing” EPS, Evercore ISI analyst Amit Daryanani eliminated the stock from the firm’s “Tactical Outperform” list on August 1, while maintaining an ‘In Line’ rating and $33 price target.
As of the end of the first quarter of 2022, 35 hedge funds had ownership positions in Juniper Networks, Inc., up from 25 hedge funds a quarter earlier. Whale Rock Capital Management, with a nearly $222 million stake, is a significant shareholder of Juniper Networks, Inc..
9. Tesla, Inc. (NASDAQ:TSLA)
Cavalry Asset Management’s Stake Value: $56,025,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 4.27%
Number of Hedge Fund Holders: 80
Tesla, Inc. (NASDAQ:TSLA) develops, produces, and markets electric automobiles and the batteries that drive them. On August 2, Itay Michaeli, a Citi analyst, increased his price target on Tesla, Inc. from $375 to $424 while maintaining a ‘Sell’ rating for the stock. Before turning optimistic, he wants further evidence of L4/RoboTaxi progress, and he thinks Tesla, Inc.’s (NASDAQ:TSLA) value “remains challenged.”
In the latest attempt by automakers to secure supply despite the escalating competition, Tesla, Inc. inked new long-term contracts on August 1 with two of its current Chinese battery-materials suppliers, Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co.
ARK Investment Management is a prominent stakeholder of Tesla, Inc., with 1.44 million shares of the company, worth over $1.09 billion. Insider Monkey found 80 hedge funds bullish on Tesla, Inc. at the close of the first quarter of 2022. Those funds held collective stakes in the company valued at $11.3 billion, down from $12.9 billion in the fourth quarter of 2021, when 91 hedge funds were long TSLA shares.
Here is what Grantham Mayo Van Otterloo & Co. LLC had to say about Tesla, Inc. in its Q1 2022 investor letter:
“To put the demand growth for clean energy materials into perspective, let’s look at Tesla. At its Battery Day last year, Tesla projected three terawatt hours of lithium-ion battery capacity needed in 2030 for the EVs and storage they expect to produce. To reach this target, Tesla alone would gobble up approximately 75% of the world’s current nickel production and four times the world’s current lithium production. These numbers are astounding enough, but when one considers that EVs currently represent just 15% of global nickel demand and about 45% of lithium demand and that Tesla will likely be producing only a small proportion of the world’s EVs in 2030, the implications are staggering. Clean energy materials companies will make a lot more money in the decades to come than they ever have both because they will be selling a lot more metric tons of material and because there are certain to be shortages where supply can’t keep up with the rapidly growing demand.”
8. Booking Holdings Inc. (NASDAQ:BKNG)
Cavalry Asset Management’s Stake Value: $60,207,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 4.59%
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) provides online travel and related services to clients and local partners through its six primary brands: Booking.com, KAYAK, Agoda, Priceline, Rentalcars.com, and OpenTable. Booking Holdings Inc. has more than 2.3 million listings across 220 countries.
On July 26, OpenTable, a division of Booking Holdings Inc., inked a contract to work with Marriott International, Inc. (NASDAQ:MAR) as their preferred provider of restaurant technology. More than 1,400 restaurants operated by Marriott hotels are currently available for bookings through OpenTable, with locations across 56 countries.
On August 1, analyst Lee Horowitz at Deutsche Bank maintained a ‘Buy’ recommendation on Booking Holdings Inc., while lowering his price objective from $2,880 to $2,300. Despite obstacles brought on by growing input costs and labor scarcity, the analyst has watched the travel sector gradually return capacity to pre-COVID levels during the past few months.
Booking Holdings Inc. has experienced an increase in hedge fund interest recently. The company was in 99 hedge funds’ portfolios at the end of the first quarter of 2022. There were 92 funds in our database with Booking Holdings Inc. at the end of the fourth quarter of 2021.
In its Q2 2022 investor letter, LRT Capital Management, an investment management firm, mentioned Booking Holdings Inc.. Here is what the fund said:
“Booking Holdings was formerly Priceline.com but has changed its name to reflect that source of most of its revenue: Booking.com. Booking.com is the largest online travel agency (OTA) in the world, connecting travelers and hotels. The company has over 2.3 million properties in 220 countries on its site, along with photos, reviews and details about the amenities offered by each property. The accommodations offered range from hotels, motels, homes & apartments, hostels, and bed & breakfasts. The company occupies a dominant position in the travel booking funnel and collects revenue from hotel reservations booked through its site. Booking.com is particularly strong in Europe, where chain hotels are less dominant and smaller independent hotel rely on it to fill their rooms. …. (Click here to read the full text)”.
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Cavalry Asset Management’s Stake Value: $63,462,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 4.84%
Number of Hedge Fund Holders: 63
Marvell Technology, Inc. (NASDAQ:MRVL) provides semiconductor products for data infrastructure. Jericho Capital Asset Management is the largest stakeholder of Marvell Technology, Inc., holding 2.32 million shares worth about $166 million.
On July 25, Blayne Curtis of Barclays maintained an ‘Overweight’ rating on Marvell Technology, Inc. and reduced his price objective to $60 from $80. In a research note, Curtis advised investors that the recent semiconductor rebound should fade because it is too early to purchase the drop.
In the first quarter of 2022, 63 hedge funds were long Marvell Technology, Inc., with a total stake value of $2.40 billion. Cavalry Asset Management increased its stake in Marvell Technology, Inc. by 92% in the first quarter, ending the period with $63.5 million worth of the company’s stock.
ClearBridge Investments, in its Q4 2021 investor letter, mentioned Marvell Technology, Inc.. Here is what the fund said:
“The ClearBridge Mid Cap Growth Strategy continued to deliver strong absolute and relative returns as our focus on de-risking investments prior to purchase and managing position sizes has made a difference through recent market turbulence. Marvell Technology, a leader in semiconductor manufacturing, is in the second-largest position in the Strategy but just one of three stocks with a weighting of over 3% in a diversified growth portfolio of over 70 names. With a wide range of exposure to fast-growing IT subsectors, including 5G telecommunications, data centers, cloud computing, and electric vehicles, Marvell’s ability to secure a crucial supplier position at the nexus of these technologies leaves it well-positioned to participate in their long-term growth. Strength in companies like Marvell offset weakness in higher multiple growth names that were dragged down by negative sentiment or short-term execution issues.”
6. Expedia Group, Inc. (NASDAQ:EXPE)
Cavalry Asset Management’s Stake Value: $64,269,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 4.9%
Number of Hedge Fund Holders: 88
Expedia Group, Inc. (NASDAQ:EXPE) is an online travel agency that provides leisure and business travelers with goods and services through its retail, business-to-business, and trivago business sectors. Expedia Group, Inc. has lessened the epidemic’s consequences, but it is still unclear how quickly the company will bounce back. Russia’s invasion of Ukraine has had an impact on tourism throughout Europe. Rising inflation has also caused consumer spending to decline.
On August 1, Deutsche Bank analyst Lee Horowitz reiterated a ‘Buy’ rating on Expedia Group, Inc. shares but dropped the price objective to $130 from $235. Investors are unsure if the substantial increase in demand will last into 2023 for the online travel sector after Q2, as the summer vacation season gets started, according to a research note by Horowitz.
Cavalry Asset Management held 328,457 shares of Expedia Group, Inc. on March 31, amounting to a $64.3 million stake and representing 4.9% of the fund’s portfolio value. 88 hedge funds from the first quarter database of Insider Monkey reported long bets on Expedia Group, Inc., with combined positions worth $6.34 billion. One of the firm’s notable shareholders is Thomas Bailard’s Bailard Inc, which recently reduced its stake by 12% to come in at roughly $4.02 million.
In its Q2 2022 investor letter, Artisan Global Value Fund mentioned Expedia Group Inc.. Here is what the fund said:
“Expedia declined 52% during the quarter due to concerns a consumer recession will reduce spending on discretionary items like travel, as well as concerns that the company is losing market share to other online travel agencies. While the fears of a potential recession are real, the current environment is actually pretty good. This summer will be one of the busiest travel seasons. As recently as June, Expedia’s management signaled it had yet to see any signs of a slowdown. It could certainly happen, but it has not yet…. (Click here to read the full text)”.
Just like Taiwan Semiconductor Manufacturing Company Limited, QUALCOMM Incorporated, and Microsoft Corporation, Expedia Group, Inc. is one of the stocks in the first quarter portfolio of John Hurley’s Cavalry Asset Management.
5. Uber Technologies, Inc. (NYSE:UBER)
Cavalry Asset Management’s Stake Value: $72,029,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 5.5%
Number of Hedge Fund Holders: 144
Uber Technologies, Inc. (NYSE:UBER) is a mobility technology firm located in California. As of August 1, the stock has fallen by about 47% year-to-date. Uber Technologies, Inc. is expanding in the massive ridesharing and delivery industry, but is struggling to remain profitable even as drivers bear more than 75% of the costs.
In the first quarter of 2022, Cavalry Asset Management purchased 2.02 million shares of Uber Technologies, Inc., worth $72.03 million. That represented 5.5% of the hedge fund’s portfolio value. Out of the hedge funds tracked by Insider Monkey, 144 reported having ownership stakes in Uber Technologies, Inc. as of the end of the first quarter of 2022, down from 153 a quarter earlier. The aggregate value of hedge funds’ Q1 holdings stood at $8.48 billion.
In advance of the company’s Q2 results, Deutsche Bank analyst Benjamin Black reiterated a ‘Buy’ recommendation on Uber Technologies, Inc., while cutting his price objective to $40 from $50. According to the expert, there is far greater concern about the issuer’s supply side, which is negatively affects investor sentiment.
On August 2, Uber Technologies, Inc. reported its financial results for the second quarter, posting a loss per share of $1.33, missing estimates by $1.06. However, Monthly Active Platform Consumers (“MAPCs”) was up 21% from the prior-year quarter, reaching 122 million.
ClearBridge Investments mentioned Uber Technologies, Inc. in its Q3 2021 investor letter. Here’s what it said:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber Technologies, Inc. will also be a key player in the transition from internal combustion engines to EVs.”
4. Monolithic Power Systems, Inc. (NASDAQ:MPWR)
Cavalry Asset Management’s Stake Value: $72,412,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 5.52%
Number of Hedge Fund Holders: 29
Monolithic Power Systems, Inc. (NASDAQ:MPWR) designs, develops and distributes integrated power semiconductor systems and power delivery architectures. Monolithic Power Systems, Inc.’s revenue has increased at a CAGR of 23% over the previous five years, owing to its increasing and highly in-demand power product line. Cowen analyst Matthew Ramsay boosted his price objective on Monolithic Power Systems, Inc. to $600 from $550 on August 2 and maintained an ‘Outperform’ rating on the stock.
Securities filings reveal that Cavalry Asset Management boosted its stake in Monolithic Power Systems, Inc. by 139% during the first quarter of 2022. The fund thus owns 149,095 shares of Monolithic Power Systems, Inc., worth over $72.41 million, and representing 5.52% of the value of its 13F portfolio.
29 hedge funds tracked by Insider Monkey reported having bullish bets on Monolithic Power Systems, Inc. as of the end of the first quarter of 2022, with an aggregate worth of $1.19 billion. Whale Rock Capital Management, with a position worth $369 million, stood as the most significant shareholder of Monolithic Power Systems, Inc..
In its Q3 2021 investor letter, Alger, an investment management firm, mentioned Monolithic Power Systems, Inc. and discussed its stance on the firm. Here is what the fund said:
“Monolithic Power Systems, Inc. was among the top contributors to performance. Monolithic Power Systems is a semiconductor company that designs, develops and markets high-performance power solutions. Its core strengths include deep system-level applications knowledge, strong analog design expertise and innovative proprietary process technologies, which enable the company to deliver highly integrated products that are energy efficient, cost effective and easy to use. Monolithic serves the consumer, computing and storage, industrial, automotive and communications end markets. Its strong process technology and use of partners to produce silicon wafers is a unique combination that provides the company with an unencumbered ability to innovate and offer nimble yet scaled manufacturing. Shares of Monolithic outperformed after the company said it produced very strong second quarter results and provided third quarter guidance that exceeded consensus expectations. Monolithic’s revenue growth accelerated in an environment in which most analog and broader semiconductor peers have struggled with industry-wide supply constraints. The company is benefiting from its continuous investments in capacity and its ability to carry inventories during previous times of weak demand. The results also underscore the success the company is having with winning contracts to provide sockets, which connect computer motherboards to CPUs. We believe the results increased investor confidence that the company can sustain this strong revenue growth, which is well above the industry average, over the next one to two years.”
3. Lyft, Inc. (NASDAQ:LYFT)
Cavalry Asset Management’s Stake Value: $77,198,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 5.89%
Number of Hedge Fund Holders: 47
Lyft, Inc. (NASDAQ:LYFT) is the owner and operator of a ride-hailing company in the U.S., with market share of about 29%. It is available in more than 645 U.S. and 10 Canadian cities. Lyft, Inc.’s stock has faced problems this year, as the value of its shares has been reduced by more than 75% over the last 12 months and by 66.7% year-to-date.
In an extensive research note on ridesharing companies, MKM Partners analyst Rohit Kulkarni maintained a ‘Neutral’ rating on Lyft, Inc. while lowering his price objective from $32 to $17 on July 27. The analyst highlighted that the group has underperformed because investors are worried about demand expectations with rising inflation, supply dynamics with high oil prices, and profitability prospects beyond recovery tailwinds.
Cavalry Asset Management loaded up on Lyft, Inc. in the first quarter, increasing its holding in the company by 52%. The hedge fund owns 2.01 million shares of Lyft, Inc., worth $77.20 million. With combined positions worth $994 million, 47 hedge funds were long Lyft, Inc. at the end of the first quarter of 2022. This shows positive sentiment from the previous quarter, when 43 hedge funds had $762 million in Lyft, Inc. positions. Alkeon Capital Management is the biggest shareholder of Lyft, Inc. as of March 31, with a massive $218 million stake.
In its Q1 2022 investor letter, Rowan Street Capital LLC mentioned Lyft, Inc.. Here is what the fund said:
“Lyft, Inc.: We sold Lyft, Inc. in Q1 ’22 to fund the acquisitions of our 3 new positions as we’ve outlined. We had owned Lyft for a little less than 3 years and realized approximately 50% gain on the stock. The new companies we bought with the proceeds from the sale are significantly better businesses, in our view.”
2. Palo Alto Networks, Inc. (NASDAQ:PANW)
Cavalry Asset Management’s Stake Value: $100,551,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 7.67%
Number of Hedge Fund Holders: 87
Palo Alto Networks, Inc. (NASDAQ:PANW) provides businesses, service providers, and governmental organizations with network security solutions. Palo Alto Networks, Inc. shares have offered investors 24.68% returns over the past year as of August 1, despite the bear market in 2022.
On August 1, Wolfe Research analyst Joshua Tilton initiated coverage of Palo Alto Networks, Inc., rating the stock at ‘Outperform’ and with a price objective of $700. According to the analyst, Palo Alto Networks, Inc. is a “consensus long” because investors want to invest in firms that can offer both growth and free cash flow margins at alluring prices.
In the first quarter of 2022, 87 hedge funds were bullish on Palo Alto Networks, Inc., up from 73 funds in the preceding quarter. Joe Dimenna’s ZWEIG DIMENNA PARTNERS is a significant stakeholder of Palo Alto Networks, Inc., with 25,680 shares worth over $12.68 million.
Palo Alto Networks, Inc. is one of the newest acquisitions of Cavalry Asset Management, being added to the fund’s portfolio in Q1. The hedge fund held nearly $101 million in PANW shares, representing 7.67% of its 13F portfolio’s exposure.
1. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Cavalry Asset Management’s Stake Value: $129,870,000
Percentage of Cavalry Asset Management’s 13F Portfolio: 9.91%
Number of Hedge Fund Holders: 83
The American semiconductor company, beat Intel Corporation (NASDAQ:INTC) in terms of market cap on August 1. AMD’s market capitalization grew by 3.05% to $94.47 per share, pushing the company’s market cap to $153 billion. In contrast, shares of Intel decreased roughly 9% to $36.31 per share, giving the rival chipmaker a market value of $148 billion.
On July 20, Ross Seymore, an analyst at Deutsche Bank, reiterated a ‘Hold’ rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) while decreasing the price objective on the stock from $115 to $85. Seymore advised investors in a research note that the semiconductor cycle is still in a state of limbo.
Hedge funds were recently seen loading up on Advanced Micro Devices, Inc.. 83 hedge funds reported ownership of AMD positions as of the end of the first quarter of 2022, compared to 69 hedge funds as of the end of the fourth quarter of 2021. With a stake valued at more than $6.50 million, Crestwood Capital Management is a prominent stakeholder of Advanced Micro Devices, Inc..
In its Q4 2021 investor letter, Carillon Tower Advisers mentioned Advanced Micro Devices, Inc.. Here is what the fund said:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
You can also take a peek at 10 Stocks to Buy According to Francis Chou’s Chou Associates Management and 10 Stocks to Buy According to William Von Mueffling’s Cantillon Capital Management
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This article is originally published at Insider Monkey.
