4. Compass, Inc. (NYSE:COMP)
Number of Hedge Fund Holders: 13
Share Price as of September 7: $2.895
Compass, Inc. (NYSE:COMP) is a New York-based real estate brokerage firm that uses a cloud-based platform for seamless customer relationship management, marketing, client service, and other functionalities in the real estate industry. The company reported a Q2 revenue of $2.02 billion, climbing 3.6% year over year. It is one of the best penny stocks to consider for a diversified portfolio.
Needham transferred its coverage of Compass, Inc. (NYSE:COMP) to analyst Bernie McTernan on September 1, who assigned a Buy rating to the stock with a price target of $5. Compass, Inc. (NYSE:COMP) represents the preferred way to play the difficult US real estate market, with room for cost control that will pave a path to profitability even if the macro environment remains difficult, the analyst told investors. Compass, Inc. (NYSE:COMP)’s performance over the last quarter and updated guidance represents a clearing event to take expectations lower, and he sees a large but favorable risk/reward from here, the analyst added.
According to Insider Monkey’s data, 13 hedge funds were long Compass, Inc. (NYSE:COMP) at the end of June 2022, with collective stakes worth $128 million. Jacob Mitchell’s Antipodes Partners is the leading position holder in the company, with 12.7 million shares worth over $46 million.
Here is what Artisan Small Cap Fund has to say about Compass, Inc. (NYSE:COMP) in its Q3 2021 investor letter:
“We added several new GardenSM positions in Q3 including Compass. Compass is a real estate brokerage firm which provides its agents with a proprietary, end-to-end cloud-based platform. The company helps address the needs of buying and selling homes from client prospecting to closing, which includes customer relationship management, AI-driven prospecting, marketing (digital, social, email, video, print, signage, lead generation), market analysis and collaboration tools. The platform also uses machine learning, artificial intelligence and other advanced data analytics strategies to draw insights across the platform, allowing agents to be more efficient and informed in their selling efforts. We believe this technology advantage is key to the company continuing to disrupt and capture real estate commission market share. We have been impressed with the company’s ability to capture 4% market share since it was founded in 2012 (vs. Redfin, founded in 2002, holding a 1% market share). The company’s profit cycle can also be boosted by adding on additional services such as title insurance referral and escrow services, real estate marketing, home renovation referrals, home insurance and home warranty referrals—all of which we believe have a significantly larger addressable market than commissions (~7X).”
