In this piece, we will take a look at the top 11 stocks to buy now according to Chet Kapoor’s Tenzing Global. If you want to skip the details about Mr. Kapoor and his investment firm, then head over to the top five stocks in the list by checking out 5 Stocks to Buy Now According to Chet Kapoor’s Tenzing Global.
Tenzing Global Investors, LLC is a hedge fund based out of San Francisco, California. It was founded by Mr. Chet Kapoor in 2011, who is also its managing partner and chief investment officer. The investment firm seeks to take a non-traditional approach to investment, by targeting companies that it believes have been neglected by large Wall Street hedge funds. It takes both long and short equity positions in small and medium cap companies. In financial terminology, a short investment is when a firm borrows and then sells the shares of a company on the market with hopes of its price dropping. Should the price drop, the short seller then repurchases the shares at a discount, and returns them to their owners, keeping the difference as a profit.
Mr. Kapoor is a graduate of Rice University and the Stanford Graduate School of Business. He received his bachelor’s in sciences and bachelor’s in arts from the former in 1997, following which he took a five-year break from the academic world. During this time period, the hedge fund executive started his career in the financial world by working as an analyst in Credit Suisse and as an associate at Blum Capital. In 2002 he went on to attend the Stanford Graduate School of Business for his Master’s of Business Administration. Following his graduation two years later, he spent six years at Perry Capital before settling down at Tenzing Global.
The investment firm has a modestly sized portfolio that was worth $295 million as of the end of the third quarter of this year. True to its philosophy, this collection of fourteen companies does not have any big technology names such as Amazon.com, Inc. (NASDAQ:AMZN) or Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL). Its biggest holdings are in Gogo Inc. (NASDAQ:GOGO), Uber Technologies, Inc. (NYSE:UBER), and Yelp Inc. (NYSE:YELP). Cumulatively, the top holdings represent roughly two-thirds of the $295 million portfolio.
Photo by Zhuo Cheng you on Unsplash
Our Methodology
To pick out Tenzing Global and Mr. Kapoor’s top 11 investments, we scanned through the former’s 13-F filings for the third quarter of this year. Once we had picked out the companies, we then went through their quarterly earnings reports, analyst ratings, other large shareholders, and hedge fund sentiment determined through both investor letters and Insider Monkey’s survey of 867 funds for Q3 2021.
Stocks to Buy Now According to Chet Kapoor’s Tenzing Global
11. Compass, Inc. (NYSE:COMP)
Tenzing Global’s Holdings: $1.9 million
Percentage of Tenzing Global Portfolio: 0.67%
Number of Hedge Fund Holders: 25
Compass, Inc. (NYSE:COMP) is a real estate brokerage located in the United States that uses artificial intelligence and cloud computing to provide its customers with services such as advertising, relationship management, and operations. It is headquartered in New York, New York.
Compass, Inc. (NYSE:COMP) earned $1.7 billion in revenue and -$0.25 in GAAP EPS for its third fiscal quarter, beating analyst estimates for revenue only. Its price target was reduced to $18 from $23 by Needham in November 2021, with the firm outlining that while the brokerage’s fundamentals remained strong, the price target reduction was part of a broader technology sector downgrade.
Mr. Kapoor’s Tenzing Global held 150,000 Compass, Inc. (NYSE:COMP) shares as of the third quarter of this year. These were worth $1.9 million and represented 0.67% of its portfolio. During the same time period, 25 of the 867 hedge funds polled by Insider Monkey had holdings in the brokerage.
Compass, Inc. (NYSE:COMP)’s largest investor is Rob Citrone’s Discovery Capital Management who owns 33.6 million shares worth $445 million.
In its Q2 2021 investor letter, ClearBridge Investments mentioned Compass, Inc. (NYSE:COMP). It outlined that:
“We established five new positions during the quarter across four sectors, supporting our approach of seeking to participate in a broad range of growth opportunities among mid cap companies. We also participated in the IPO of Compass, a real estate technology company disrupting the residential brokerage industry by improving agent efficiency, leading to rapid market share gains.”
Compass, Inc. (NYSE:COMP) joins Uber Technologies, Inc. (NYSE:UBER), Gogo Inc. (NASDAQ:GOGO), and Yelp Inc. (NYSE:YELP) in the list of Mr. Kapoor’s favorite stocks.
10. Kaltura, Inc. (NASDAQ:KLTR)
Tenzing Global’s Holdings: $2.3 million
Percentage of Tenzing Global Portfolio: 0.78%
Number of Hedge Fund Holders: 15
Kaltura, Inc. (NASDAQ:KLTR) is an American company that offers video-based tools for several uses. These include video conferencing, training, webinars, lecture capture, and virtual classrooms. Additionally, the firm also provides advertising and television services.
During its third quarter, Kaltura, Inc. (NASDAQ:KLTR) raked in $42 million in revenue and $0.26 in GAAP EPS. The firm’s price target was reduced to $10 from $16 by Canaccord in November 2021, due to worries about Q4 guidance and sales hiring targets.
Tenzing Global held 225,000 Kaltura, Inc. (NASDAQ:KLTR) shares worth $2.3 million as Q3 2021 ended. Similarly, 15 of the 867 hedge funds polled by Insider Monkey for Q3 2021 had held stakes in the video firm.
9. Overstock.com, Inc. (NASDAQ:OSTK)
Tenzing Global’s Holdings: $3.8 million
Percentage of Tenzing Global Portfolio: 1.3%
Number of Hedge Fund Holders: 26
Overstock.com, Inc. (NASDAQ:OSTK) is an American online retailer which offers several products covering the home decoration and furniture segments. The company also provides a platform for its partners to streamline their logistics and inventory management.
As Q3 2021 came to an end, Mr. Kapoor’s investment firm held 50,000 shares of Overstock.com, Inc. (NASDAQ:OSTK). These were worth $3.8 million and they made up 1.3% of the investment firm’s portfolio. 26 of the 867 hedge funds polled by Insider Monkey for the same time period held shares in the retailer.
Overstock.com, Inc. (NASDAQ:OSTK) brought in $689 million in revenue and $0.54 in non-GAAP EPS for its Q3, beating analyst estimates for both. Its price target was raised to $157 from $130 by DA Davidson in October 2021, with the firm highlighting that the company’s fourth-quarter will be better than its third and second quarters.
D. E. Shaw’s investment firm D E Shaw is Overstock.com, Inc. (NASDAQ:OSTK)’s largest investor. It owns 620,069 shares worth $48 million.
8. VIZIO Holding Corp. (NYSE:VZIO)
Tenzing Global’s Holdings: $5.3 million
Percentage of Tenzing Global Portfolio: 1.79%
Number of Hedge Fund Holders: 19
VIZIO Holding Corp. (NYSE:VZIO) is a home entertainment products provider. Its products include televisions, smart bars, and other accessories alongside a smart television operating system that provides streaming and software applications. It is headquartered in Irvine, California.
For its Q3, VIZIO Holding Corp. (NYSE:VZIO) beat Wall Street revenue estimates by raking in $588 million. It also met estimates for GAAP EPS by posting -$0.10 in the segment. Piper Sandler reduced the company’s price target to $29 from $31 in November 2021, outlining that its strong growth is marred by logistical challenges.
Mr. Kapoor’s Tenzing Global owned a stake of $5.3 million in VIZIO Holding Corp. (NYSE:VZIO) as of Q3 2021, through a stake of 250,000 shares. The investment made up 1.79% of its portfolio. Out of the 867 hedge funds polled by Insider Monkey during the same time period, 19 had invested in the company.
VIZIO Holding Corp. (NYSE:VZIO)’s largest investor is Steven Ng and Andrew Mitchell’s Ophir Asset Management which owns 1.3 million shares worth $28 million.
In its Q2 2021 investor letter, Argosy Investors had the following to say about the entertainment hardware firm:
“So how are our largest holdings affected in a world of higher wage inflation? As a general rule, I will evaluate current and potential future holdings on their capital intensivity and their ability to raise prices. Vizio is now (a part of) our top 5 largest equity holdings. Vizio, a new position this quarter, could be negatively impacted in producing its low-margin TV’s, although wage inflation might be a lower impact event than any material shortages such as on computer chips. Their advertising business should be fairly well-insulated, but given their relatively minor position in the Connected TV market today, they may have less ability to raise advertising prices than industry leaders like Roku may be able to.”
7. Enovix Corporation (NASDAQ:ENVX)
Tenzing Global’s Holdings: $7.5 million
Percentage of Tenzing Global Portfolio: 2.5%
Number of Hedge Fund Holders: 23
Enovix Corporation (NASDAQ:ENVX) is one of the companies that lie at the heart of the emerging and popular electric vehicle segment. It manufactures and sells lithium-ion batteries for the industry, and it is also developing custom energy storage solutions.
For the third quarter of this year, Tenzing Global owned 400,000 Enovix Corporation (NASDAQ:ENVX) shares, which were worth $7.5 million and represented 2.5% of its portfolio. 23 of the 867 hedge funds scoured by Insider Monkey for Q3 2021 owned the battery company’s shares.
Enovix Corporation (NASDAQ:ENVX)’s loss per share stood at -$0.08 during its Q3, beating analyst estimates by $0.02. Oppenheimer raised the company’s price target to $38 from $32 in a November 2021 analyst note outlining that the company is improving manufacturing and sales capabilities.
Enovix Corporation (NASDAQ:ENVX)’s biggest investor is Peter S. Park’s Park West Asset Management. It has a $228 million stake in the firm through owning 12.7 million shares.
6. Peloton Interactive, Inc. (NASDAQ:PTON)
Tenzing Global’s Holdings: $8.7 million
Percentage of Tenzing Global Portfolio: 2.94%
Number of Hedge Fund Holders: 62
Peloton Interactive, Inc. (NASDAQ:PTON) is an American firm that sells fitness products and online streams that allow its customers to exercise from the comfort of their homes. The company is headquartered in New York, New York, and its services include electronic exercise bicycles and treadmills.
For its Q1 FY2022, Peloton Interactive, Inc. (NASDAQ:PTON) brought in $805 million through revenue and -$1.25 in GAAP earnings share, missing analyst estimates on both counts. Stifel reduced its price target to $56 from an earlier $70 in a November 2021 analyst note. The firm cited supply chain constraints and market recovery as some of the reasons behind the reduction.
Mr. Kapoor’s investment firm held 100,000 Peloton Interactive, Inc. (NASDAQ:PTON) shares that were worth $8.7 million and represented 2.94% of its portfolio by Q3 2021 end. Out of 867 hedge funds, 62 held a stake in the company revealed a third-quarter 2021 Insider Monkey survey.
Peloton Interactive, Inc. (NASDAQ:PTON)’s largest investor is Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, which owns 7.1 million shares worth $626 million.
In its second quarter 2021 investor letter, Carillon Tower Advisers mentioned Peloton Interactive, Inc. (NASDAQ:PTON). It stated that:
“Peloton Interactive operates a connected fitness platform offering live and on-demand classes allowing users to exercise at home. The firm’s shares were pressured in the quarter after Peloton announced a voluntary recall for both its legacy treadmill (Peloton Tread+) and its newly-launched base model treadmill (Peloton Tread). The issue surrounding the latter is somewhat troubling, as it appears it may be the result of an engineering flaw. This new treadmill offering was expected to be a key growth driver in the second half of 2021, and this development reduces our confidence in Peloton’s product pipeline. Therefore, we sold the stock.”
Just like Yelp Inc. (NYSE:YELP), Gogo Inc. (NASDAQ:GOGO), and Uber Technologies, Inc. (NYSE:UBER), Peloton Interactive, Inc. (NASDAQ:PTON) is one of Mr. Kapoor’s favorite stocks.
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Disclosure. None. 11 Stocks to Buy Now According to Chet Kapoor’s Tenzing Global is originally published on Insider Monkey.
