In this article, we will look at the top 10 stocks to invest in according to Victor Ho’s Yarra Square Partners.
Yarra Square Partners is an American investment firm that focuses on investing in stocks after conducting in-depth, bottom-up research. The firm was founded by its portfolio manager Mr. Victor Ho in 2016, and it was formerly known as Sutton Square. Therefore, when compared to some of the large hedge funds out there, Yarra Square is a younger firm.
Its founder Mr. Ho is a graduate of the Harvard Business School, where he received his Master’s in Business Administration (MBA) in 2002. Since then, he has spent his time in the financial industry and worked at several different companies. He started his post-MBA career in Castle Haran as an associate, a role in which he worked for 3 years. Then, in 2005, he joined Och-Ziff Capital Management as an analyst, and departed in 2007, joining Conatus Capital as a managing director. Mr. Ho then spent nine years at the firm before going on to set up Yarra Square.
When we look at Yarra Square’s portfolio size, it appears modest as compared to some of the large hedge funds who often have holdings in billions of dollars. As opposed to this, Yarra Square manages a portfolio worth $117 million and while its investments are concentrated primarily in the technology industry, it also targets other sectors such as hospitality.
Some of Yarra Square’s largest holdings are in Amazon.com, Inc. (NASDAQ:AMZN), Liberty Broadband Corporation (NASDAQ:LBRDA) and Marriott Vacations Worldwide Corporation (NYSE:VAC).
Our Methodology
In order to determine which stocks are on Victor Ho and Yarra Square’s radar, we took a look at the investment firm’s 13-F filings with the Securities and Exchange Commission (SEC) for the second quarter. This enabled us to sift out which stocks are his favorite.
Why pay attention to hedge fund holdings? 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 more than 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.
Stocks to Invest in According to Victor Ho’s Yarra Square Partners
10. Freeport-McMoRan Inc. (NYSE:FCX)
Mr. Ho’s Stake Value: $4.8 million
Percentage of Mr. Ho’s 13F Portfolio: 4.13%
Number of Hedge Fund Holders: 76
Freeport-McMoRan Inc. (NYSE:FCX) is an American company that focuses on mining minerals, meta, and petroleum products. Its operations are based in North and South America and in Indonesia. Some of the products that it mines include metals such as copper, gold, and silver, with oil and gas also making the cut.
Mr. Ho’s Yarra Square held 131,292 shares of Freeport-McMoRan Inc. by the close of the second quarter of this year. These were worth $4.8 million and represented 4.13% of the overall portfolio. During the same time period, 76 of the 873 hedge funds polled by Insider Monkey had held a stake in the company.
Freeport-McMoRan Inc.’s largest shareholder is Ken Fisher’s Fisher Asset Management who owned 46 million shares worth $1.5 billion by the end of the third quarter of 2021.
Freeport-McMoRan Inc. joins Mr. Ho’s top stock picks, with the others being Amazon.com, Inc., Liberty Broadband Corporation and Marriott Vacations Worldwide Corporation.
9. McAfee Corp. (NASDAQ:MCFE)
Mr. Ho’s Stake Value: $6.5 million
Percentage of Mr. Ho’s 13F Portfolio: 5.53%
Number of Hedge Fund Holders: 18
McAfee Corp. (NASDAQ:MCFE) is an American software services provider that is well known for its computer protection software.
Mr. Ho’s Yarra Square held 232,600 McAfee Corp. shares by the end of the second quarter, which was a new position for the firm. This stake was worth $6.5 million and represented 5.53% of Yarra Square’s portfolio. During the same time period, 18 of the 873 hedge funds polled by Insider Monkey held a stake in McAfee Corp..
McAfee Corp.’s largest shareholder is Peter S. Park’s Park West Asset Management who holds 1.3 million shares worth $36 million.
8. XPO Logistics, Inc. (NYSE:XPO)
Mr. Ho’s Stake Value: $6.6 million
Percentage of Mr. Ho’s 13F Portfolio: 5.6%
Number of Hedge Fund Holders: 18
XPO Logistics, Inc. (NYSE:XPO) is a transportation and logistics provider that is headquartered in Greenwich, Connecticut. It offers services to freight carriers and also enables its customers to find the right companies for their shipping needs. Additionally, the company also offers warehousing and other services.
Mr. Ho’s Yarra Square held 47,162 shares of XPO Logistics, Inc. during the second quarter of this year, in a stake that equaled $6.5 million and represented 18% of the overall portfolio. During the same time, 18 of the 873 hedge funds polled by Insider Monkey had holdings in the logistics company.
XPO Logistics, Inc.’s largest shareholder is William B. Gray’s Orbis Investment Management who owns $1.5 billion of equity through 11 million shares.
7. Vroom, Inc. (NASDAQ:VRM)
Mr. Ho’s Stake Value: $6.8 million
Percentage of Mr. Ho’s 13F Portfolio: 5.77%
Number of Hedge Fund Holders: 21
Vroom, Inc. (NASDAQ:VRM) is an American company that provides its customers with a platform for selling used cars. It is headquartered in New York, New York and in addition to its platform, it also provides financing services.
Vroom, Inc. is a part Mr. Ho’s elite stock picks, with others being Marriott Vacations Worldwide Corporation, Amazon.com, Inc. and Liberty Broadband Corporation.
Mr. Ho and his investment firm held 162,546 Vroom, Inc. shares during the second quarter, in a stake worth $6.8 million and representing 5.77% of Yarra Square’s portfolio. During the same time, 21 of the 873 hedge funds polled by Insider Monkey had invested in the company.
Vroom, Inc.’s largest shareholder is Bill Miller’s Miller Value Partners, which owns 2.5 million shares worth $106 million.
6. ServiceNow, Inc. (NYSE:NOW)
Mr. Ho’s Stake Value: $6.81 million
Percentage of Mr. Ho’s 13F Portfolio: 5.9%
Number of Hedge Fund Holders: 91
ServiceNow, Inc. (NYSE:NOW) is an enterprise cloud software services provider that is headquartered in Santa Clara, California and was founded in 2004. Its platform automates services for customers and allows them to utilize artificial intelligence and machine learning for their requirements.
Mr. Ho’s Yarra Square held 12,468 ServiceNow, Inc. shares in the second quarter of this year, which were worth $6.8 million and represented 5.8% of the investment company’s portfolio. Similarly, in the second quarter, out of 873 hedge funds polled by Insider Monkey, 91 had held a stake in the company.
Oppenheimer raised the company’s price target to $775 in an October 2021 investor note, outlining that strong spending estimates and a good customer base will serve the company well.
Alexander Becker’s Codex Capital is ServiceNow, Inc.’s biggest investor, with a stake of $5.4 billion through 9,850 shares
In its first-quarter 2021 investor letter, Palm Capital mentioned ServiceNow, Inc. and stated that:
“ServiceNow is run by a highly rated management team. Its founder is still Chairman. And while its CEO and CFO have recently changed, the new CEO, Bill McDermott left enterprise software titan, SAP, to join the company. Furthermore, the company has substantial management depth.
The company has a net cash position of $1.5b on its balance sheet and generated $1b of free cashflow in 2020 that we expect to grow above 20% per annum over the next five years. Based on the price we paid for the business, we expect to earn more than 8% per annum in US$ from our investment and it is the type of business we would like to own for a long time.”
5. Vimeo, Inc. (NASDAQ:VMEO)
Mr. Ho’s Stake Value: $7.4 million
Percentage of Mr. Ho’s 13F Portfolio: 6.3%
Number of Hedge Fund Holders: 48
Vimeo, Inc. (NASDAQ:VMEO) is a platform that allows users all over the world to share their ideas and communicate by uploading videos. Due to its nature, this platform serves a large category of users, which range from personal, to non profits to corporate and governmental.
Vimeo, Inc.’s largest shareholder is Joshua Kushner’s Thrive Capital who owns in $286 million equity through 5.8 million shares.
4. Facebook, Inc. (NASDAQ:FB)
Mr. Ho’s Stake Value: $8.4 million
Percentage of Mr. Ho’s 13F Portfolio: 7.17%
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is the largest social media company in the world. Headquartered in the American state of California, it started out as a simple platform that lets its users connect with each other and share their life updates. Now Facebook, Inc. is working on a metaverse alongside having increased the scope of its product.
Mr. Ho’s Yarra Square owned 24,294 million Facebook, Inc. shares that were worth $8.4 million and represented 7.17% of his total portfolio value by the end of the second quarter. During the same time period, 266 of the 873 hedge funds polled by Insider Monkey held stakes in the company.
Facebook, Inc.’s largest shareholder is Alexander Becker’s Codex Capital who owns 27,950 shares worth $9.6 billion.
Truist, in an October 2021 note, lowered the company’s share price target to $400, but highlighted that recent advertisement challenges are only temporary.
In its third quarter 2021 investor letter, Wedgewood Partners had the following to say about Facebook, Inc.:
“Facebook detracted from performance despite posting a staggering +56% growth in advertising revenues. Much of the stock’s underperformance was driven by nonoperating concerns that we view as mostly political in nature. The Company’s digital properties command a massive audience of over 2.7 billion daily users, so any government or state actor would be able to wield tremendous power by controlling that audience and it should not be a surprise when those actors attempt to do that. However, Facebook has invested aggressively in its content curation capabilities that address many of the concerns raised by media and political critics. We continue to carry Facebook at our maximum weighting as the stock is trading in line with a market multiple despite unrivaled competitive positioning and rapid growth, representing one of the best risk-rewards available in the market.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Mr. Ho’s Stake Value: $8.5 million
Percentage of Mr. Ho’s 13F Portfolio: 7.25%
Number of Hedge Fund Holders: 271
Mr. Ho’s holdings in the company are through 2,482 shares that are worth $8.5 million and represent 7.25% of his firm’s portfolio. At the end of the second quarter of this year, 271 out of the 873 hedge funds polled by Insider Monkey held a stake in the company. Credit Suisse lowered Amazon.com, Inc.’s price target to $4,200 in an October 2021 note, worrying that the retailer’s expenses would increase.
Amazon.com, Inc.’s largest shareholder is Alexander Becker’s Codex Capital who owns 2,850 shares worth $9.8 billion.
In its third quarter 2021 investor letter, Madison Funds had the following to say about Amazon.com, Inc.:
“We did add a modest new position weight to the portfolio in the quarter in Amazon.com, Inc. stock (AMZN). We acknowledge that many aspects of Amazon’s merit as an investment are well appreciated. However, our work leads us to conclude that shares are attractive. Leadership positions in both e-commerce and cloud computing provide the company with significant durable competitive advantages in industries that we think can produce above average growth over the next decade. Over the past year, AMZN shares have trailed the market as investors debate near-term growth prospects following the pandemic-induced e-commerce demand. Additionally, margins have been depressed due to Amazon’s unprecedented increases in spending to build out fulfillment and in-house logistics capabilities – Amazon will build out more square footage this year and last than it did cumulatively over the previous 10 years, more than doubling its in-house delivery capacity. We like the investments Amazon is making and believe they will further advantage the company relative to other retailers, making it nearly impossible for competitors to match the same level of delivery speed and convenience. With its large and frequently engaged customer base, Amazon has multiple mechanisms to make money, including selling advertising and enhanced subscription services. Within the cloud business, we forecast Amazon Web Services (AWS) leveraging its strengths in Infrastructure-as-a-service (IaaS) to move into higher value segments of cloud computing (such as platform-as-a-service: PaaS), allowing the company to continue outgrowing the overall IT sector with strong profitability. While Amazon shares have performed extremely well over the long-term, we think near-term concerns about whether Amazon will earn a return on its accelerated investments provide an opportunity now for investors willing to look through the investment period. Our view is that the investments likely earn strong returns and extend Amazon’s competitive advantages and above average growth.”
2. Liberty Broadband Corporation (NASDAQ:LBRDA)
Mr. Ho’s Stake Value: $8.6 million
Percentage of Mr. Ho’s 13F Portfolio: 7.34%
Number of Hedge Fund Holders: 28
Liberty Broadband Corporation is an internet and video streaming service provider in the United States.
Mr. Ho’s Yarra Square held 49,790 Liberty Broadband Corporation shares by the end of this year’s second quarter, which was worth $8.6 million and represented 7.34% of its portfolio. Out of the 873 hedge funds profiled by Insider Monkey by Q2 2021 end, 28 held stakes in the company.
Boykin Curry’s Eagle Capital Management is Liberty Broadband Corporation’s largest shareholder since it holds 9.1 million shares worth $1.5 billion.
Alphyn Capital Management, in its first quarter 2021 investor letter, mentioned Liberty Broadband Corporation and outlined that:
“Liberty Broadband completed its merger with GCI, thereby collapsing one layer of the double discount to Charter Communications, presenting a good opportunity to trim that position as well.”
1. Marriott Vacations Worldwide Corporation (NYSE:VAC)
Mr. Ho’s Stake Value: $8.7 million
Percentage of Mr. Ho’s 13F Portfolio: 7.41%
Number of Hedge Fund Holders: 35
Marriott Vacations Worldwide Corporation is headquartered in Florida and it provides vacation services to its customers through using its own properties. Some of the brands associated with the company include Sheraton Vacation Club, Hyatt Residence Club, and Grand Residences by Marriot.
Marriott Vacations Worldwide Corporation earned $58.7 million in revenue and $0.15 in EPS during its second quarter, beating analyst estimates for revenue. Jefferies lowered the company’s price target to $190 in a September 2021 investor note, basing his estimates on a recent recovery from the ongoing pandemic.
Richard Mashaal’s Rima Senvest Management is Marriott Vacations Worldwide Corporation largest shareholder, owning a stake of $154 million through 971,737 shares.
In its second quarter 2021 investor letter, Baron Funds mentioned Marriott Vacations Worldwide Corporation and stated that:
“Marriott Vacations Worldwide Corp.: Marriott Vacations is a leading owner, operator, and developer of real estate timeshare resorts. With the company’s 100% focus on leisure travelers, we believe Marriott Vacations is ideally positioned for a robust travel recovery as more and more people are vaccinated. We believe the long-term growth prospects for Marriott Vacations are compelling and the shares remain attractively valued.”
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This article is originally published at Insider Monkey.
