In this article, we discuss 4 stocks to buy according to Alexander Captain’s Cat Rock Capital. If you want to read our detailed analysis of Captain’s investment philosophy and performance, go directly to 8 Stocks to Buy According to Alexander Captain’s Cat Rock Capital.
4. Meta Platforms, Inc. (NASDAQ:META)
Cat Rock Capital’s Stake Value: $56,468,000
Percentage of Cat Rock Capital’s 13F Portfolio: 12.01%
Number of Hedge Fund Holders: 184
Alexander Captain’s Cat Rock Capital trimmed its stake in American multinational tech company Meta Platforms, Inc. (NASDAQ:META) by 57% in Q2 2022. This leaves the investment value at 350,192 shares worth $56.47 million.
The number of hedge funds tracked by Insider Monkey holding stakes in Meta Platforms, Inc. (NASDAQ:META) declined to 184 in Q2, down from 200 in the preceding quarter. The aggregate value of these stakes is over $18.20 billion.
On October 13, Cowen analyst John Blackledge maintained an ‘Outperform’ rating while reducing his price objective on Meta Platforms, Inc. (NASDAQ:META) from $250 to $205. Due to a mix of macroeconomic and foreign exchange headwinds, the move to short-form video monetisation, and a worse-than-anticipated 3Q22 Digital ad expert check call, the analyst cut his 2022–2027 advertising predictions.
In its Q3 2022 investor letter, Wedgewood Partners mentioned Meta Platforms, Inc. (NASDAQ:META). Here is what the fund said:
“Meta Platforms, Inc. (NASDAQ:META) detracted from performance during the quarter. Meta’s advertising revenue grew +3% (currency-adjusted) over 2021 and is up +70% since 2019 (pre-pandemic). The shift of advertisers and consumers to social media has been fairly dramatic and sticky. The company reported $2.88 billion “daily active people” of its Family of Apps (as of June 2022) and is +35% higher than the comparable month pre-COVID (June 2019). Meta also serves over 10 million advertisers which is up from 8 million in January 2020. In spite of these impressive gains, the stock now trades at absolute levels well below where it traded before the pandemic. We suspect much of the market’s concern revolves around slowing revenue growth. It is fairly evident that there was a tremendous pull-forward of demand for many businesses and services over the past couple of years, and that the normalization of revenue growth from that “pull-forward” is hardly an existential crisis. Further, while Meta’s profit margins have fallen below pre-pandemic levels, it’s important to note that the company likely hired well in excess of what it needed because it assumed the pandemic induced growth would continue. Meta has plenty of room to moderate its expense base and drive significant value by repurchasing shares at today’s historically depressed multiples.”
