In this article, we present the list of top 10 stock picks of Ari Zweiman’s 683 Capital Partners at the end of the second quarter.
683 Capital Partners is a secretive hedge fund based out of New York. The fund and its founder Ari Zweiman have done an excellent job of shielding themselves from coverage in mainstream financial media and the unnecessary performance pressure it brings. When a fund delivers outsized returns to its investors, the mainstream media pushes it to the pedestal only to take a jibe at it in years of underperformance. 683 Capital Partners was founded by Mr. Zweiman in 2006, and as of March this year, the fund managed assets worth close to $3 billion but had only three clients. Mr. Zweiman got his undergraduate degree from Yale University. He followed it up by getting a masters in economics from Stanford University and a Juris Doctor degree (J.D.) from Harvard Law School in 1999. Before founding 683 Capital Partners, Mr. Zweiman worked at several financial institutions.
683 Capital Partners’ Portfolio
683 Capital Partners’ recent 13F filing shows that the aggregate value of its holdings dropped to $1.416 billion from $1.868 billion in the period between March 31 and June 30. During the second quarter, the fund sold its entire stake in 102 companies and reduced its holdings in 29 stocks. In addition, the fund initiated a stake in 16 stocks and made additional purchases in 43 stocks during that time. The fund’s portfolio was majorly disposed to finance and health care sectors, which accounted for nearly 47% and 21.03% of its aggregate value at the end of June. The filing also revealed that Carvana Co. (NYSE:CVNA), Enova International Inc (NYSE:ENVA), and Opendoor Technologies Inc. (NASDAQ:OPEN) continued to remain 683 Capital Partners’ most loved stocks at the end of Q2.
Photo by Yiorgos Ntrahas on Unsplash
Our Methodology
At Insider Monkey, we cover the portfolios of 895 hedge funds, closely tracking the stocks they buy and sell. We selected the ten stocks discussed in this article based on the 13F regulatory filing submitted by 683 Capital Partners with the SEC for the quarter ending June 30.
10 Best Stocks to Buy According to Ari Zweiman’s 683 Capital Partners
10. Tailwind Acquisition Corp. (NYSE:TWND)
683 Capital Partners’ Stake Value: $29,851,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.1%
Number of Hedge Fund Holders: 31
Tailwind Acquisition Corp. (NYSE:TWND) is a special purpose acquisition company (SPAC) founded in 2020. It was created with intentions to effect an asset acquisition, stock purchase, merger, capital stock exchange, reorganization, or similar business combination with one or more public or private businesses. The number of hedge funds tracked by Insider Monkey that disclosed a stake in this SPAC has increased almost consecutively every quarter to 34 at the end of June this year from 26 at the end of the first quarter of 2021.
On August 8, Colorado-based industrial laser development and manufacturing company Nuburu announced that it would go public by merging with Tailwind Acquisition Corp. (NYSE:TWND) in a deal that priced the pre-money enterprise value of the merged entity at $350 million. Tailwind Acquisition Corp. (NYSE:TWND) had tried to merge with risk analytics company Qomplx in August last year, but that deal was terminated mutually by the involved parties. After the closing of the Nuburu and Tailwind Acquisition Corp. (NYSE:TWND) deal, the former will start trading under the ticker symbol “BURU.”
9. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX)
683 Capital Partners’ Stake Value: $30,431,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.14%
Number of Hedge Fund Holders: 24
Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) is a small clinical-stage biopharmaceutical company based out of Waltham, Massachusetts, developing therapies for the treatment of cancer. It was founded in 2006 and currently employs 59 people. The popularity of Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) among smart money investors has declined considerably since the end of 2020. Only 25 of the 895 hedge funds tracked by Insider Monkey disclosed a stake in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) at the end of June 2022, down substantially from 38 funds at the end of December 2020.
Apart from 683 Capital Partners, other hedge funds tracked by us that disclosed a stake in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) at the end of June included David Witzke And Michael Gregory’s Avidity Partners Management and Samuel Isaly’s OrbiMed Advisors. For its most recent quarter, Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) announced a GAAP per share loss of $0.64 on no revenue. In its earnings release, the company also disclosed that it had cash, cash equivalents, short-term and long-term investments worth $378.9 million at the end of June.
8. Hess Corporation (NYSE:HES)
683 Capital Partners’ Stake Value: $30,998,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.18%
Number of Hedge Fund Holders: 35
This year’s surge in energy prices has propelled most oil and gas stocks, including that of Hess Corporation (NYSE:HES), which is trading up by more than 60% year-to-date. With inflation running high and the energy sector being the last refuge for investors who want to protect their portfolios, Hess Corporation (NYSE:HES) is among the best bet in the oil and gas industry. Due to this reason, Insider Monkey recently picked it in our list of 10 Best Cyclical Stocks for Inflation.
On August 29, Ari Wald, Oppenheimer’s technical analysis team analyst, released a note to clients recommending they consider investing in the oil and gas sector if they want to diversify their portfolio amid weakness in broader markets. In his note, Mr. Wald mentioned Hess Corporation (NYSE:HES) among individual stocks that investors could buy in the sector and wrote:
“We used the (energy) sector’s pullback into its rising 200-day average as an opportunity to upgrade to Overweight in July. For the iShares Oil & Gas Exploration & Production ETF (BATS:IEO), we think recent strength is marking a resumption of a larger breakout above the ETF’s 2018 peak.”
7. Lennar Corporation (NYSE:LEN) (NYSE:LEN-B)
683 Capital Partners’ Stake Value: $34,856,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.46%
Number of Hedge Fund Holders: 47
683 Capital Partners almost doubled its stake in Lennar Corporation (NYSE:LEN) during the second quarter to 493,900 class A shares. John Smith Clark’s Southpoint Capital Advisors and billionaire Cliff Asness’ AQR Capital Management were other hedge funds tracked by Insider Monkey that upped their stake in Lennar Corporation (NYSE:LEN) during that period. While Southpoint Capital Advisors boosted its stake by 67% to 1 million shares, AQR Capital Management increased it by 50% to around 1.9 million shares.
The consecutive hike in interest rates this year has also pushed mortgage rates higher, which usually doesn’t work in the favor of homebuilders like Lennar Corporation (NYSE:LEN). This could be one of the reasons why its stock has lost one-third of its value in the current year. Nonetheless, this decline in the stock price has made the stock’s dividend yield attractive at current levels. Lennar Corporation (NYSE:LEN) has been making dividend payments to its investors every year for the last 18 years and currently pays a quarterly dividend of $0.375 per share, which based on the stock’s last closing price, translates into an annual dividend yield of above 2.5%.
6. Cardlytics, Inc. (NASDAQ:CDLX)
683 Capital Partners’ Stake Value: $37,587,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.65%
Number of Hedge Fund Holders: 23
Despite 683 Capital Partners boosting its stake in Cardlytics, Inc. (NASDAQ:CDLX) by 29% during the second quarter, the company got relegated to the sixth spot in the fund’s portfolio at the end of that period, down from the third spot it held at the beginning. A large part of why that happened can be attributed to Cardlytics, Inc.’s (NASDAQ:CDLX) stock price performance this year, as the stock has lost more than 85% of its value year-to-date.
Cardlytics, Inc. (NASDAQ:CDLX) operates an advertising platform that runs on digital channels of different banks. On July 20, the company announced the appointment of its new CEO, Karim Temsamani, who worked as Head of Global Partnerships at Stripe prior to taking up this role. Earlier this month Wells Fargo analyst Jeff Cantwell released a note downgrading most stocks from the Fintech sector post a hawkish commentary from Fed chair Jerome Powell late last month. Among the stocks downgraded by Mr. Cantwell was Cardlytics, Inc. (NASDAQ:CDLX), which he downgraded to ‘Underweight’ from ‘Equal Weight.’ Mr. Cantwell also lowered his price target on the stock to $13 from $14, representing an almost negligible upside from where it currently trades.
5. General Motors Company (NYSE:GM)
683 Capital Partners’ Stake Value: $38,284,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.7%
Number of Hedge Fund Holders: 75
General Motors Company (NYSE:GM) was the only stock amongst 683 Capital Partners’ top 10 13F holdings in which the fund initiated its stake during the second quarter itself. However, unlike 683 Capital Partners, several other hedge funds tracked by Insider Monkey unloaded their entire stake in the legacy car company during that period. Billionaire Ken Fisher’s Fisher Asset Management and Joshua Pearl’s Hickory Lane Capital Management were among such funds.
In the recently concluded Goldman Sachs’ Communacopia + Technology Conference, the CEO of General Motors Company’s (NYSE:GM) Cruise unit, Kyle Vogt, revealed that Cruise would be launching a revenue-generating rideshare service on its autonomous vehicles in 90 days in two cities – Austin and Phoenix. Mr. Vogt also guided that by 2025 the Cruise unit expects to bring in $1 billion in revenue. On the same day before Mr. Vogt spoke, Marry Barra, CEO of General Motors Company (NYSE:GM), divulged that the car and SUV giant expects to invest $2 billion annually in Cruise.
4. Carvana Co. (NYSE:CVNA)
683 Capital Partners’ Stake Value: $40,645,000
Percentage of 683 Capital Partners’ 13F Portfolio: 2.87%
Number of Hedge Fund Holders: 47
If you had any reservations about following the consensus stock picks of hedge funds and the benefits of doing so, look no further than what has been happening with Carvana Co. (NYSE:CVNA). The stock might have crashed this year – losing almost 90% of its value year-to-date – but smart money started fleeing from it all the way back in early 2021. Among the hedge funds tracked by Insider Monkey, the number of funds with ownership in Carvana Co. (NYSE:CVNA) had declined consecutively every quarter since the first quarter of 2021, when 64 funds disclosed a stake in the company and stood at 47 at the end of June.
The collapse of Carvana Co.’s (NYSE:CVNA) stock price may have made it “grossly undervalued”, according to analysts at Piper Sandler. In a recently released note, they upgraded the stock to ‘Overweight’ from ‘Neutral’ while reducing their price target on it to $73 from $98, which still represents a potential upside of 100%. In their note, the analysts mentioned:
“Before we get to the punchline, please note that yes, we are aware that used vehicle prices are falling. We know that rising interest rates are a risk, and we know that bankruptcy is a real possibility. But CVNA is now 1/10th as valuable as it was 12 months ago, and after running a detailed sensitivity analysis, we think many realistic scenarios suggest that CVNA is grossly undervalued.”
3. Opendoor Technologies Inc. (NASDAQ:OPEN)
683 Capital Partners’ Stake Value: $44,415,000
Percentage of 683 Capital Partners’ 13F Portfolio: 3.13%
Number of Hedge Fund Holders: 39
Opendoor Technologies Inc. (NASDAQ:OPEN) must be finding itself in a problematic predicament as it operates a tech platform that deals in real estate, and stocks from both those industries have been crushed this year. Seen in that context, it is not difficult to explain why Opendoor Technologies Inc.’s (NASDAQ:OPEN) stock is trading down by 70% year-to-date. Opendoor became a publicly traded company in late 2020 through a merger with a SPAC.
After making its debut, the stock more than tripled to over $30 from $10 in a short span but lost most of those gains amid the crash in the broader market at the onset of the COVID-19 pandemic. It again made a recovery and was trading close to the $20 level during the third quarter of 2020 when 683 Capital Partners initiated its stake in the company. Since then, it has only gone downhill as it currently trades below the $5 mark.
Despite its recent performance, most analysts who cover the stock on Wall Street remain bullish on its future trajectory. 9 of the 15 Wall Street analysts covering the stock currently have a ‘Buy’ rating on it with a consensus price target of $13.14, representing a potential upside of a whooping 188% from the stock’s last closing price.
2. IAC/InterActiveCorp (NASDAQ:IAC)
683 Capital Partners’ Stake Value: $46,585,000
Percentage of 683 Capital Partners’ 13F Portfolio: 3.29%
Number of Hedge Fund Holders: 39
While 683 Capital Partners upped their stakes in IAC/InterActiveCorp (NASDAQ:IAC) only slightly by 3% during the second quarter, and the stock of the media company lost 25% of its value during that time, IAC/InterActiveCorp (NASDAQ:IAC) still managed to climb up three spots and became 683 Capital Partners second most loved stock at the end of June.
For its fiscal 2022 second quarter, IAC/InterActiveCorp (NASDAQ:IAC) reported a GAAP per share loss of $10.02 on revenue of $1.36 billion on August 9. Analysts had expected the company to report a per share loss of only $1.64 on revenue of $1.383 billion for that period. Following the earnings release, several analysts on Wall Street reduced their price target on IAC/InterActiveCorp’s (NASDAQ:IAC) stock on August 11. Analysts at both Credit Suisse Group and Cowen reiterated their ‘Outperform’ rating, but the former reduced its price target to $121 from $127, and the latter to $124 from $130.
1. Enova International Inc (NYSE:ENVA)
683 Capital Partners’ Stake Value: $86,460,000
Percentage of 683 Capital Partners’ 13F Portfolio: 6.1%
Number of Hedge Fund Holders: 16
Enova International Inc (NYSE:ENVA) continued to be 683 Capital Partners’ most loved stock at the end of June despite the fund trimming its holdings in the company marginally by 2% during the second quarter. Enova International Inc (NYSE:ENVA) is also the oldest holding among 683 Capital Partners’ top 10 stock picks, with the fund disclosing a stake in the company for the first time during the third quarter of 2015.
Following 683 Capital Partners, the funds tracked by Insider Monkey that reported the largest stake in Enova International Inc (NYSE:ENVA) at the end of June were Michael A. Price And Amos Meron’s Empyrean Capital Partners and billionaire Jim Simons’ Renaissance Technologies. 683 Capital Partners, Empyrean Capital Partners, and Renaissance Technologies held 3 million, 1.12 million and 999,675 shares of the company, respectively.
Enova International Inc (NYSE:ENVA) is a Chicago-based financial technology (Fintech) company founded in 2011. It is one of the largest licensed lenders in the U.S. and is a member of both the Innovative Lending Platform Association (ILPA) and Online Lenders Alliance (OLA). Since its inception, the company has catered to more than 7 million customers providing them with over $40 billion in funding. All of the three analysts on Wall Street who cover the stock currently have a ‘Buy’ rating on it with a consensus price target of $48.67%, representing a potential upside of close to 50% from the stock’s last closing price.
You can also look at 12 Best IPO Stocks To Buy Now and 16 Best Penny Stocks To Buy.
[daily-newsletter][/daily-newsletter]
Follow Insider Monkey on Twitter
Suggested articles:
Disclosure: None. 10 Best Stocks to Buy According to Ari Zweiman’s 683 Capital Partners is originally published on Insider Monkey.
