In this article, we will discuss the 10 stocks to invest in according to Sean Murphy’s Game Creek Capital.
Hedge fund manager Sean Murphy serves as the president and chief investment officer at the Boston-based investment management fund Game Creek Capital. After earning his B.A. in Finance from the University of Notre Dame, Sean Murphy served as an equity research associate at Credit Suisse Boston till 2000. He later served as a senior analyst at Vardon Capital Management for over seven years, focusing on the media and consumer sectors, until taking over Game Greek Capital in 2010 after the death of the fund’s previous manager, Scott Mayo.
Game Creek Capital employs an absolute return, long/short strategy and mainly invests in the media, consumer, and telecom sectors. The fund makes use of bottom-up research to recognize companies that are currently undervalued and considers them for investment.
Some of the top stocks present in the investment portfolio of Game Creek Capital at the end of the second quarter of 2021 include Alphabet Inc. (NASDAQ:GOOG), General Motors Company (NYSE:GM), Salesforce.com, Inc. (NYSE:CRM) and Comcast Corporation (NASDAQ:CMCSA), among others discussed in detail below.
Photo by Yiorgos Ntrahas on Unsplash
Our Methodology
With this background in mind, let us now look towards the 10 stocks to invest in according to Game Creek Capital. We made use of Game Creek Capital’s 13F portfolio for the second quarter for this analysis.
Why should we pay attention to Sean Murphy’s 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 July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 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 Stocks To Invest In According To Game Creek Capital
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Game Creek Capital’s Stake Value: $5.43 million
Percentage of Game Creek Capital’s 13F Portfolio: 2.73%
Number of Hedge Fund Holders: 60
Cisco Systems, Inc. (NASDAQ:CSCO) is a California-based multinational tech conglomerate that manufactures, develops, and sells networking hardware, software, telecommunications and other high-tech equipment.
On September 20, MKM Partners analyst Fahad Najam raised the price target on Cisco Systems, Inc. to $69 from $60, and kept a Buy rating on the shares of the company.
ClearBridge Investments, an investment management firm, mentioned Cisco Systems, Inc. in its first-quarter 2021 investor letter. Here’s what they said:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
9. Comcast Corporation (NASDAQ:CMCSA)
Game Creek Capital’s Stake Value: $5.44 million
Percentage of Game Creek Capital’s 13F Portfolio: 2.73%
Number of Hedge Fund Holders: 84
Comcast Corporation is a multinational entertainment company based in Philadelphia that provides cable TV, high-speed internet and home phone services to its customers.
Sean Murphy’s Game Creek Capital currently holds 95,500 shares of Comcast Corporation, amounting to over $5.44 million in worth and representing 2.73% of the fund’s portfolio. By the end of the second quarter of 2021, 84 hedge funds out of the 873 tracked by Insider Monkey held stakes in Comcast Corporation worth roughly $9.3 billion. This is compared to 88 hedge funds in the previous quarter with a total stake value of approximately $9.76 billion.
On September 29, Pivotal Research analyst Jeffrey Wlodarczak raised the his price target on Comcast Corporation to $75 from $72 and kept a Buy rating on the shares.
In the Q2 2021 investor letter of ClearBridge Investments, the fund mentioned Comcast Corporation. Here is what they said:
“We funded the shift primarily with trims in Comcast following big gains in this name. Comcast is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
Comcast, like Blackstone, has been a meaningful long-term holding whose stock performance has at times lagged its robust fundamental performance. Over the last nine months the stock price caught up some with the fundamentals and looked like it had more room to run. Our thesis on the name evolved, however, following the May 17 announcement that competitor Discovery was merging its operations with Time Warner. This deal positions the new company as a credible competitor to Netflix, Amazon Prime, Hulu and Disney, and results in Comcast being left without the proverbial dance partner in the evolving pay TV/DTC landscape. While we continue to believe Comcast’s cable systems business is well-positioned and that NBCUniversal remains valuable, the competitive dynamic for NBCUniversal has stiffened. Our reduced position size reflects both our continued enthusiasm for many parts of the franchise and emerging concerns given the evolving pay TV/DTC landscape.”
8. The Mosaic Company (NYSE:MOS)
Game Creek Capital’s Stake Value: $5.48 million
Percentage of Game Creek Capital’s 13F Portfolio: 2.75%
Number of Hedge Fund Holders: 43
The Mosaic Company (NYSE:MOS) is a Florida-based fertilizer company that is involved in the production of nutrients and fertilizers, including concentrated phosphate and potash.
As of Q2 2021, Sean Murphy’s hedge fund holds over 171,750 shares of the company, worth $5.48 million. The Mosaic Company currently accounts for 2.75% of the fund’s 13F portfolio. Of the 873 elite funds being tracked by Insider Monkey, 43 have positions in The Mosaic Company, up from 38 in the previous quarter. The total value of these stakes is roughly $809 million.
On October 12, Mizuho analyst Christopher Parkinson initiated coverage of The Mosaic Company with a Buy rating and a $55 price target.
Appleseed Fund mentioned The Mosaic Company in its Q1 2021 investor letter. Here is what the firm has to say:
“Our most significant contributors to the Fund’s equity performance during the quarter (includes) Mosaic Company (MOS). As for Mosaic, its share price has risen in sympathy with increasing grain prices, which should stimulate additional farmer investment into improving crop yields.”
7. Qurate Retail, Inc. (NASDAQ:QRTEA)
Game Creek Capital’s Stake Value: $5.8 million
Percentage of Game Creek Capital’s 13F Portfolio: 2.92%
Number of Hedge Fund Holders: 31
Qurate Retail, Inc. (NASDAQ: QRTEA), is a Colorado-based media conglomerate that provides e-commerce services for its customers worldwide. Ranked seventh on our list of the 10 stocks to invest in according to Game Creek Capital, Qurate Retail, Inc. has a market capitalization of $4.22 billion.
According to the latest filings, Game Creek Capital owned 444,000 shares in the firm at the end of June 2021 worth over $5.8 million, representing 2.92% of the fund’s portfolio.
By the end of the second quarter of 2021, 39 hedge funds out of the 873 tracked by Insider Monkey held stakes in Qurate Retail, Inc. worth about $889.7 million. This is compared to 31 hedge funds in the previous quarter with a total stake value of approximately $776.29 million.
White Brook Capital, in its Q3 2021 investor letter, mentioned Qurate Retail, Inc. (NASDAQ: QRTEA). Here is what the fund said:
“Qurate Retail (QRTEA) was bought during the 3rd quarter. Qurate’s largest business is broadcast video shopping channels Home Shopping Network (HSN) and QVC. These channels cater to an older, mostly female clientele and has proven to be more durable than many have expected. The opportunity for Qurate is in online video shopping – a category that is being unsuccessfully targeted by the largest players in online shopping – including Amazon, Facebook, Pinterest, and Google. Qurate has compelling personalities and the technical knowhow on how to best present and maximize sales in video format and can port those skills to the online format. The price for the stock indicates that the marginal seller of the stock doesn’t appreciate that online video shopping is different from shopping online as the presenter and the presentation – not only the good – is content and the reason that a potential consumer engages and then buys. This is hard, Qurate does it well, and many merchants need those skills.
The Company also has independent fulfillment – a boon for sellers who might not want to rely on Amazon or Facebook to succeed. Today, many publishers use Amazon affiliate links to derive 100% profit margin revenue by referring viewers of their content to Amazon to purchase covered items there. A good first step, but I expect content producers to move away from Amazon’s affiliate links and increasingly run independent e-commerce stores. Qurate has the assets and strategic flexibility to help provide those services.
Critically, this long term growth opportunity is occurring in the short term and the market should be able to understand whether Qurate has traction providing these services relatively quickly. Critically, repositioning assets for online video has few incremental costs for Qurate and the revenue opportunity is large. If they have any success pivoting online, I believe the stock is very undervalued, and we’ll do well, while if they do better than that, the returns could be great. If they are unsuccessful, the Company will continue to generate significant cash flow and is guided by owners and managers who understand the value of returning unproductive cash to shareholders – limiting the downside. There’s a likelihood they are able to do both – return capital and grow the business and total shareholder returns could be best in class over the next couple years.”
6. The Kroger Co. (NYSE:KR)
Game Creek Capital’s Stake Value: $5.85 million
Percentage of Game Creek Capital’s 13F Portfolio: 2.94%
Number of Hedge Fund Holders: 39
The Kroger Co. (NYSE:KR) is a retail corporation based in Cincinnati, Ohio. The company operates supermarkets and convenience stores throughout the United States, and is recognized as one of the country’s largest retailers.
Sean Murphy’s Game Creek Capital currently holds over 152,750 shares of The Kroger Co., amounting to more than $5.85 million in worth and representing 2.94% of the fund’s total portfolio. By the end of the second quarter of 2021, 39 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Kroger Co., worth around $3.56 billion. This is compared to 35 hedge funds in the previous quarter with a total stake value of approximately $3.15 billion.
5. Salesforce.com, Inc. (NYSE:CRM)
Game Creek Capital’s Stake Value: $6 million
Percentage of Game Creek Capital’s 13F Portfolio: 3.05%
Number of Hedge Fund Holders: 108
Of the 873 elite funds tracked by Insider Monkey, 108 were long in Salesforce.com, Inc. at the end of June, up from 91 in the first quarter of 2021. Sean Murphy of Game Creek Capital holds 24,875 shares of Salesforce.com, Inc.. These shares are valued at $6 million and make up 3.05% of his fund’s portfolio.
In its Q2 2021 investor letter RV Capital Management explains why it began its investment in Salesforce.com, Inc.. Here is what the fund said:
“Part 5: A New Investment in Salesforce.com
The assertion that mega caps can also be mispriced is a good segue to our second new investment in Salesforce.com. Salesforce is one of the largest software companies in the world with a market value of around US$ 250 bn. It is best known for its customer relationship management or “CRM” solution, known as its Sales Cloud. It has three additional clouds (“Service,” “Marketing” and “Commerce”) as well as a thriving platform business with both owned and 3rd party software solutions.
I first came across Salesforce in 2013. I was invested in Bechtle, a German company that provides companies with their in-house IT. I kept hearing about a strange new concept called “the Cloud” and wanted to get up to speed on the topic in case it was a risk to Bechtle. As a result, I picked up a copy of “Behind the Cloud”. It documents how Salesforce.com pioneered cloud-based software and revolutionised the software industry.
Since then, I have followed Salesforce from a distance and visited it several times in San Francisco. I did not consider it seriously as an investment though as for much of the period, I had not yet overcome my aversion to loss-making companies.
This changed in December last year when Salesforce announced the acquisition of Slack (a former investment of the Business Owner Fund, described in my 2020 half-year letter) for US$ 27 bn. On the date of announcement, Salesforce’s market value fell by around US$ 20 bn. Effectively, the market was saying that Slack was almost worthless, which, as an enthusiastic owner of Slack, I disagreed with. Initially, I decided to keep our Slack stock and roll it into Salesforce (as part of the consideration was in Salesforce’s own stock). As Salesforce’s price fell further in the subsequent months, I bought its stock directly to make it a full-size position post the closing of the Slack acquisition…” (Click here to see the full text)
4. Hess Corporation (NYSE:HES)
Game Creek Capital’s Stake Value: $6.7 million
Percentage of Game Creek Capital’s 13F Portfolio: 3.37%
Number of Hedge Fund Holders: 31
Hess Corporation (NYSE:HES) is a New York-based global energy company involved in the exploration and production of crude oil and natural gas.
According to the recent 13F Filings, Game Creek Capital holds 76,875 shares of Hess Corporation, worth more than $6.7 million and representing 3.37% of the fund’s investment portfolio. As of the second quarter of 2021, 31 hedge funds held stakes in Hess Corporation, worth more than $615.7 million. This is compared to 26 funds that held stakes in the company in the preceding quarter.
Earlier this September, Citi analyst Scott Gruber maintained a Buy rating on Hess Corporation, alongside a price target of $91.
3. Alphabet Inc. (NASDAQ:GOOG)
Game Creek Capital’s Stake Value: $9.68 million
Percentage of Game Creek Capital’s 13F Portfolio: 4.86%
Number of Hedge Fund Holders: 155
As of the end of the June quarter, 155 hedge funds out of the 873 tracked by Insider Monkey held stakes in Alphabet Inc.. Sean Murphy’s Game Creek Capital currently holds 3,965 shares in the company, worth more than $9.68 million, accounting for 4.86% of the fund’s total investment portfolio.
In its Q2 2021 investor letter, Mawer Investment Management named Alphabet Inc. among the companies that reported strong results. Here is what the fund said:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Alphabet. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
2. Pfizer Inc. (NYSE:PFE)
Game Creek Capital’s Stake Value: $11 million
Percentage of Game Creek Capital’s 13F Portfolio: 5.53%
Number of Hedge Fund Holders: 67
Pfizer Inc. (NYSE:PFE) is a multinational biotechnology and pharmaceutical company that develops and manufactures vaccines, medical devices and other consumer healthcare products. Based in New York, the company ranks second on our list of the 10 stocks to invest in according to Game Creek Capital.
By the end of the second quarter, Game Creek Capital held 281,250 shares of Pfizer Inc. in a stake that is worth over $11 million and represents 5.53% of its portfolio. During the same time period, 67 of the 873 hedge funds tracked by Insider Monkey held stakes in the company, up from 65 in the previous quarter.
On October 12, Morgan Stanley analyst Matthew Harrison raised the price target on Pfizer Inc. to $48 from $45, and kept an Equal Weight rating on the shares.
In its first quarter letter, ClearBridge Investments, an investment firm mentioned Pfizer and stated:
“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”
1. General Motors Company (NYSE:GM)
Game Creek Capital’s Stake Value: $11 million
Percentage of Game Creek Capital’s 13F Portfolio: 5.55%
Number of Hedge Fund Holders: 86
General Motors Company is a multinational automotive corporation that designs and manufactures automobiles, through the multiple brands the company owns, including Chevrolet, GMC and Cadillac.
At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $7.41 billion in General Motors Company. The number of hedge funds that held stakes in the automotive manufacturing company remained the same for the first and second quarters of 2021. Sean Murphy’s Game Creek Capital holds 186,750 shares of General Motors Company. These shares amount to $11 million and represent 5.55% of the hedge fund’s total portfolio value.
On October 22, JPMorgan analyst Ryan Brinkman raised the price target on General Motors Company to $80 from $77, and kept an Overweight rating on the shares of the company.
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This article is originally published at Insider Monkey.
