10 Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital

Published on October 3, 2022 at 9:04 am by Ruchi Gupta in Hedge Funds, News

In this article, we discuss 10 stocks to buy according to Richard Scott Greeder’s Broad Bay Capital. If you want to skip our detailed analysis of Greeder’s investment philosophy and performance, go directly to 5 Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital.

Richard Scott Greeder has been a founding partner and limited partner at Broad Bay Capital since November 1, 2015. He holds a more than 75% ownership stake in Broad Bay Capital. It is a New York-based hedge fund.

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At the end of Q2 2022, Broad Bay Capital’s 13F portfolio had a value of over $638.83 million, compared to $786.84 million in the previous quarter. The hedge fund made investments in several industries during the quarter, with materials, industrials, consumer staples, and information technology making up a smaller portion of the portfolio as compared to consumer discretionary, finance, and communications, which were more dominant in the portfolio composition. Some of the most prominent equities in the portfolio of Broad Bay Capital in the second quarter of 2022 are The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON), and Levi Strauss & Co. (NYSE:LEVI).

Our Methodology

We picked the top 10 stocks from the Q2 2022 portfolio of Greeder’s hedge fund. We sorted the list using data from Insider Monkey’s database of 895 elite hedge funds as of the second quarter of 2022, which was used to gauge hedge fund sentiment around the securities.

Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital

10. Boot Barn Holdings, Inc. (NYSE:BOOT)

Broad Bay Capital’s Stake Value: $29,838,000

Percentage of Broad Bay Capital’s 13F Portfolio: 4.67%

Number of Hedge Fund Holders: 34

Boot Barn Holdings, Inc. (NYSE:BOOT) manages specialty shopping malls. The business offers western and work-related footwear, clothes, and accessories in the United States. As of July 27, Boot Barn Holdings, Inc. (NYSE:BOOT) had added 11 more shops to its portfolio, bringing the total to 311. The ROCE for Boot Barn Holdings is 28%. That represents a reasonable return, above the industry average of 17% for Specialty Retail.

According to Insider Monkey’s database of elite hedge funds, 34 funds reported owning stakes in Boot Barn Holdings, Inc. (NYSE:BOOT) at the end of Q2 2022, up from 33 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP held a leading position in Boot Barn Holdings, Inc. (NYSE:BOOT), with almost 650,545 shares worth $44.83 million.

Boot Barn Holdings, Inc. (NYSE:BOOT) was no longer considered a favorable Fresh Pick by Baird analyst Jonathan Komp on August 12. However, he still maintained an ‘Outperform’ rating and a $90 price target on the stock.

Broad Bay Capital initiated its position in Boot Barn Holdings, Inc. (NYSE:BOOT) during the first quarter of 2020, purchasing shares worth over $2.47 million. At the end of Q2 2022, the hedge fund held stakes valued at $29.84 million in the company. Boot Barn Holdings, Inc. (NYSE:BOOT) represented 4.67% of the hedge fund’s 13F portfolio. In addition, the hedge fund raised its stake in the firm by a whopping 301%.

Like The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON), and Levi Strauss & Co. (NYSE:LEVI), Richard Scott Greeder was bullish on Boot Barn Holdings, Inc. (NYSE:BOOT) in the second quarter of 2022.

Wasatch Global Investors mentioned Boot Barn Holdings, Inc. (NYSE:BOOT) in its Q4 2021 investor letter. Here is what the fund said:

“The top contributor to Fund performance for the fourth quarter was Boot Barn Holdings, Inc. (BOOT)—a specialty retailer offering increasingly popular Western and work-related apparel, footwear and accessories. Boots are somewhat resistant to online competition because they often require specialized fitting. The company has benefited from its economies of scale and multi-channel business model, which have kept revenues flowing during virus-related shutdowns. Stimulus payments by the federal government to consumers have helped as well. Boot Barn’s private-label brands, built around well-known personalities in the music business, have enabled the company to convert higher portions of its revenues into bottom-line profits. For most of the period since March 2020, Boot Barn’s stock rallied on these positive conditions—and this rally continued in the fourth quarter. We consider Boot Barn’s management to be excellent, and we’ve continually added to our position on periodic price weakness within the context of an overall upward trajectory in the stock.”

9. Rover Group, Inc. (NASDAQ:ROVR)

Broad Bay Capital’s Stake Value: $30,926,000

Percentage of Broad Bay Capital’s 13F Portfolio 4.84%

Number of Hedge Fund Holders: 17

Rover Group, Inc. (NASDAQ:ROVR) is based in Seattle and it operates an online pet care marketplace. Rover connects pet owners with service providers that offer both daytime services like dog boarding and in-home pet sitting, as well as services like dog day-care, dog walking, and drop-in visits.

Robert Mollins, an analyst at Gordon Haskett, downgraded Rover Group, Inc. (NASDAQ:ROVR) from ‘Buy’ to ‘Hold’ on August 9 and lowered his price objective from $5.50 to $3.50. The number of hedge funds tracked by Insider Monkey reported owning stakes in Rover Group, Inc. (NASDAQ:ROVR) stood at 17 in Q2 2022, declining from 25 in the previous quarter.

Broad Bay Capital reduced its position in Rover Group, Inc. (NASDAQ:ROVR) by 3% in the second quarter of 2022. This makes Broad Bay Capital’s stake in Rover Group, Inc. (NASDAQ:ROVR) amount to $30.93 million. David Zorub’s Parsifal Capital Management is the most significant stakeholder of Rover Group, Inc. (NASDAQ:ROVR), with 8.59 million shares worth almost $32.28 million.

8. Planet Fitness, Inc. (NYSE:PLNT)

Broad Bay Capital’s Stake Value: $32,985,000

Percentage of Broad Bay Capital’s 13F Portfolio: 5.16%

Number of Hedge Fund Holders: 28

Planet Fitness, Inc. (NYSE:PLNT) runs and franchises gyms under the Planet Fitness name. On September 8, Stifel analyst Chris O’Cull retained a ‘Buy’ recommendation on Planet Fitness, Inc. (NYSE:PLNT) while trimming his price objective from $85 to $82. During the previous two weeks, the stock underperformed the market, which, in his opinion, was caused by a “surprise” senior management resignation.

Broad Bay Capital started building its position in Planet Fitness, Inc. (NYSE:PLNT) in the first quarter of 2020. In Q2 of 2022, the hedge fund held 485,000 shares in the company, valued at $32.99 million. The company represented 5.16% of the hedge fund’s 13F portfolio. Broad Bay Capital elevated its position in Planet Fitness, Inc. (NYSE:PLNT) by 204% in Q2 2022.

Many institutional investors have recently modified their positions in Planet Fitness, Inc. (NYSE:PLNT), as 28 hedge funds held stakes in the company at the end of June 2022, down from 33 in the previous quarter.

In its Q1 investor letter, Wasatch Global Investors mentioned Planet Fitness, Inc. (NYSE:PLNT). Here is what the fund said:

“At the other end of the spectrum, we completely sold our position in Planet Fitness, Inc. (PLNT) even though some speculators would consider the stock to be a reopening play. The company owns and runs a chain of fitness clubs. The stock spiked on optimism that people will return to pre-pandemic levels of exercise at group facilities. But recent earnings for Planet Fitness didn’t impress us, and we decided the stock was too expensive based on our projection for the company’s growth rate.”

7. Ingevity Corporation (NYSE:NGVT)

Broad Bay Capital’s Stake Value: $50,512,000

Percentage of Broad Bay Capital’s 13F Portfolio: 7.9%

Number of Hedge Fund Holders: 19

Ingevity Corporation (NYSE:NGVT), based in North Charleston, South Carolina, is a leading manufacturer of specialized chemicals and high-performance activated carbon products. The ROE for Ingevity Corporation (NYSE:NGVT) is 21.70%, higher than the industry average for Chemicals of 17%.

In the second quarter of 2022, Jeff Ubben’s Inclusive Capital disclosed a prominent position in Ingevity Corporation (NYSE:NGVT), consisting of 2.15 million shares worth about $135.84 million. In addition, according to Insider Monkey’s Q2 data, 19 hedge funds were long Ingevity Corporation (NYSE:NGVT), compared to 20 funds in the prior quarter.

The fund first bought a stake in Ingevity Corporation (NYSE:NGVT) in the second quarter of 2019. As a result, Broad Bay Capital owned 800,000 shares in Ingevity Corporation (NYSE:NGVT) at the end of Q2 2022, valued at over $50.51 million, representing 7.9% of the portfolio of the hedge fund.

6. Eventbrite, Inc. (NYSE:EB)

Broad Bay Capital’s Stake Value: $50,837,000

Percentage of Broad Bay Capital’s 13F Portfolio: 7.95%

Number of Hedge Fund Holders: 21

Eventbrite, Inc. (NYSE:EB) is an event management and ticketing website with headquarters in San Francisco, which allow users to search, create, and promote nearby events. On July 14, Piper Sandler analyst Matt Farrell initiated Eventbrite, Inc. (NYSE:EB)’s coverage, rating the stock as ‘Overweight’ with a $13 price target.

Eric Bannasch’s Cadian Capital reported a significant stake in Eventbrite, Inc. (NYSE:EB) in the second quarter of 2022, with 7.32 million shares worth $75.23 million. In addition, according to Insider Monkey’s Q2 database, 21 hedge funds were long Eventbrite, Inc. (NYSE:EB), compared to 18 funds in the prior quarter.

At the end of Q2 2022, Broad Bay Capital held a stake worth $50.84 million in Eventbrite, Inc. (NYSE:EB), selling 50,000 shares during the quarter. As a result, the company represented 7.95% of the hedge fund’s portfolio.

In addition to The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON), and Levi Strauss & Co. (NYSE:LEVI), Eventbrite, Inc. (NYSE:EB) was one of the top stocks to buy according to Richard Scott Greeder’s Broad Bay Capital in the second quarter.

In its second-quarter 2021 investor letter, Artisan Partners mentioned Eventbrite, Inc. (NYSE:EB). Here is what the fund said:

“Eventbrite is the largest software and ticketing platform helping event creators plan, promote and produce live events in small-and-mid markets. The company generates revenue by charging a per-ticket fee on paid tickets and has a strong foothold in the small-and-mid markets—nearly 20X the size of the next largest competitor. We believe Eventbrite is well-positioned to benefit from a sharp increase in demand for live events amid the broader re-opening of the US economy—a dynamic it has already witnessed in Australia with live events bouncing back to approximately 90% of 2019 levels. We expect this to be amplified by significant cost cuts made during the pandemic (>30% of 2019 revenue) remaining in place. Longer term, we believe Eventbrite should benefit from the secular trend toward consumer experiences, an industry growing over 8% per year prior to the pandemic.”

Click to continue reading and see 5 Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital.

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