In this article, we discuss the 10 stocks to buy today according to David Brown’s Hawk Ridge Management based on Q2 holdings of the fund. If you want to skip our detailed analysis of Brown’s history, investment philosophy, and hedge fund performance, go directly to the 5 Stocks to Buy Today According to David Brown’s Hawk Ridge Management.
Hawk Ridge Management is a long-short equity hedge fund located in Los Angeles. It was established in 2005 by David Brown, the current portfolio manager, with only $4 million in assets. He acquired his Bachelor’s degree in Economics from Claremont Mckenna College. After that, he joined Credit Suisse as an analyst. Later, he honed his investment methodology at Brentwood Associates, a private equity firm.
Hawk Ridge Management’s investing strategy focuses on taking long positions in undervalued firms with promising business characteristics while taking short positions in companies with unduly high valuations and inferior business characteristics.
At the end of the second quarter of 2021, Hawk Ridge Capital Management’s 13F equity portfolio was valued $1.39 billion with a top 10 holdings concentration of 53.95%. The hedge fund made new purchases in 12 equities during the second quarter, increased interests in 8 stocks, dumped 19 and decreased holdings in 6 stocks.
As of the second quarter, Hawk Ridge Management holds significant stakes in many companies including Apollo Global Management, Inc. (NYSE:APO), Ferguson plc (NYSE:FERG), and Bath & Body Works, Inc. (NYSE:BBWI).
Hawk Ridge Management owns 1.81 million shares in Apollo Global Management, Inc. (NYSE:APO), worth $112.65 million. On November 2, the company declared a quarterly dividend of $0.50 per share, in line with the previous. In addition, the company has gained 69.51% in the past twelve months and 53.10% year to date.
Hawk Ridge Management bought 671,691 shares of Ferguson plc (NYSE:FERG) in the second quarter of 2021. In October, Morgan Stanley analyst Annelies Vermeulen increased her price target on Ferguson to 11,070 GBp from 9,970 GBp and reiterated an “Equal Weight” rating on the shares.
Another notable stock in David Brown’s portfolio is Bath & Body Works, Inc. (NYSE:BBWI). The investor owns a $52.94 million stake in the company. In September, Atlantic Equities analyst Daniela Nedialkova upgraded Bath & Body Works to “Overweight” from “Neutral” and gave a price target of $82. The shares have shown an impressive performance over the last twelve months, gaining 166.44% in value.
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Here is a list of 10 stocks to buy today according to David Brown’s Hawk Ridge Management.
We used Brown’s 13F portfolio for Q2 2021 for this analysis.
Stocks to Buy Today According to David Brown’s Hawk Ridge Management
10. Valvoline Inc. (NYSE:VVV)
Hawk Ridge Management Stake Value: $55,392,000
Percentage of Hawk Ridge Management’s 13F Portfolio: 3.97%
Number of Hedge Fund Holders: 26
Valvoline Inc. (NYSE:VVV) is a company based in the United States that produces and distributes Valvoline-branded automobile oil, additives, and lubricants. In October, Monness Crespi analyst Chris Shaw raised his price target on Valvoline to $40 from $36 and rated the stock as “Buy.” The company features on the list of 10 stocks to buy today according to David Brown’s Hawk Ridge Management.
On November 11, the company declared a quarterly dividend of $0.125 per share, in line with the previous. Valvoline Inc. also posted an EPS of $0.50 in Q4, beating market predictions by $0.03. In addition, the company’s revenue beat the analysts’ consensus by $6.12 million at $835 million. The stock gained 58.31% in the past twelve months.
As of Q3 2021, Renaissance Technologies is the largest shareholder of Valvoline Inc. (NYSE:VVV), owning shares worth $88.13 million. In addition to this, 26 hedge funds tracked by Insider Monkey are reported having stakes in the company in Q2, up from 23 in the previous quarter. These stakes are worth $644.05 million.
Along with Apollo Global Management, Inc. (NYSE:APO), Ferguson plc (NYSE:FERG) and Bath & Body Works, Inc. (NYSE:BBWI), Valvoline Inc. (NYSE:VVV) is one of the stocks to buy today according to David Brown’s Hawk Ridge Management.
In its second-quarter 2021 investor letter, Wasatch Core Growth Fund mentioned Valvoline Inc. (NYSE:VVV). Here is what the fund said:
“Another significant contributor was Valvoline, Inc. (VVV), a company that manufactures lubricants and car parts and operates oil-change service centers. In addition to benefiting from the economic reopening, the company has discovered the advantages of making a mobile app available. Valvoline customers can use the app to find the closest service center and view live estimated wait times. Certainly, the adoption of technology to improve productivity and convenience isn’t a new theme. But we see mobile digitalization as a highly disruptive innovation that creates additional relationships among companies, distributors and customers. As a result, mobile digitalization is a competitive consideration in more and more of the companies that we evaluate for investment. In the first quarter, Valvoline’s stock declined partially because investors worried about the increasing popularity of electric vehicles (EVs)—which are much less dependent on petroleum products. But the stock rebounded in the second quarter, we think partly based on the realization that EVs still represent a tiny percentage of new cars sold and an even smaller percentage of cars in service. Moreover, Valvoline reported strong earnings and raised projections for the future.”
9. Purple Innovation, Inc. (NASDAQ:PRPL)
Hawk Ridge Management Stake Value: $55,969,000
Percentage of Hawk Ridge Management’s 13F Portfolio: 4.01%
Number of Hedge Fund Holders: 25
Purple Innovation, Inc. (NASDAQ:PRPL) is a company that creates and sells comfort technology products. In Q3 2021, the company posted an EPS of -$0.07, missing the estimates by $0.22. In addition, purple Innovation, Inc. reported revenue of $170.8 million, down 8.7% from the prior-year quarter.
On November 10, Wedbush analyst Seth Basham trimmed his price target on Purple Innovation to $20 from $37 and kept an “Outperform” rating on the shares. According to the analyst, the company’s Q3 results fell short of sell-side and buy-side expectations, decreasing its 2021 prediction.
As of Q2 2021, 25 hedge funds tracked by Insider Monkey are reported to have stakes in Purple Innovation, Inc. (NASDAQ:PRPL), with a total value of over $459.61 million. The number of hedge funds having stakes in the company stood at 24 in the previous quarter, highlighting the positive hedge fund sentiment.
Just like Apollo Global Management, Inc. (NYSE:APO), Ferguson plc (NYSE:FERG) and Bath & Body Works, Inc. (NYSE:BBWI), Purple Innovation, Inc. (NASDAQ:PRPL) is one of the notable stocks in David Brown’s Hawk Ridge Management 13F portfolio in Q2.
8. Integer Holdings Corporation (NYSE:ITGR)
Hawk Ridge Management Stake Value: $57,377,000
Percentage of Hawk Ridge Management’s 13F Portfolio: 4.12%
Number of Hedge Fund Holders: 23
Integer Holdings Corporation (NYSE:ITGR) is a renowned medical device outsourcer. The company recently declared its Q3 results, with revenue reaching $305.57 million, up 29.51% from the prior-year quarter. In addition, the company’s sales increased by 30% to $306 million.
In October, Integer Holdings Corporation agreed to pay $200 million for Oscor, a privately held medical equipment company based in Florida. In September, Argus analyst Jasper Hellweg raised his price target on Integer to $105 from $100 and maintained a “Buy” rating on the shares.
Ken Fisher’s Fisher Asset Management is the biggest shareholder of Integer Holdings Corporation (NYSE:ITGR), with shares worth $48.76 million. Of the 873 hedge funds tracked by Insider Monkey, 23 hedge funds were bullish on Integer Holdings Corporation as of Q2 2021, up from 16 in the previous quarter.
7. Super Micro Computer, Inc. (NASDAQ:SMCI)
Hawk Ridge Management Stake Value: $64,797,000
Percentage of Hawk Ridge Management’s 13F Portfolio: 4.65%
Number of Hedge Fund Holders: 20
Super Micro Computer, Inc. (NASDAQ:SMCI) is a computer and server manufacturer. As of the end of the second quarter of 2021, 20 out of the 873 hedge funds tracked by Insider Monkey owned stakes of SMCI, up from 21 funds a quarter earlier.
On November 5, Loop Capital analyst Ananda Baruah increased his price target on Super Micro Computer to $60 from $50 and kept a “Buy” rating on the shares. According to the analyst, the firm recorded a very significant beat and rose with its Q1 results.
David Brown’s Hawk Ridge Management currently holds 1.84 million shares of Super Micro Computer, Inc. (NASDAQ:SMCI) that amounts $64.80 million. The company occupies 4.65% of the hedge fund’s total portfolio.
6. Frontdoor, Inc. (NASDAQ:FTDR)
Hawk Ridge Management Stake Value: $65,021,000
Percentage of Hawk Ridge Management’s 13F Portfolio: 4.66%
Number of Hedge Fund Holders: 33
Frontdoor, Inc. (NASDAQ:FTDR) is a home service provider based in the United States. Among the hedge funds being tracked by Insider Monkey, Rima Senvest Management is a leading shareholder in Frontdoor, Inc. (NASDAQ:FTDR), with 2.52 million shares worth more than $105.41 million.
In October, JPMorgan analyst Cory Carpenter downgraded Frontdoor, Inc. (NASDAQ:FTDR) to “Neutral” from “Overweight” with a price target of $45, down from $60.
Frontdoor, Inc. (NASDAQ:FTDR) shareholders have witnessed a decrease in hedge fund interest. At the end of the second quarter of 2021, the company was in the portfolios of 33 hedge funds. The all-time high for this statistic is 41. In addition, there were 36 hedge funds in our database with FTDR holdings in the first quarter of 2021.
Apollo Global Management, Inc. (NYSE:APO), Ferguson plc (NYSE:FERG), and Bath & Body Works, Inc. (NYSE:BBWI) are some of the notable stocks in David Brown’s Hawk Ridge Management 13F portfolio in Q2, just like Frontdoor, Inc. (NASDAQ:FTDR).
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Disclosure: None. 10 Stocks to Buy Today According to David Brown’s Hawk Ridge Management is originally published on Insider Monkey.
