5 Best Stocks to Buy According to Brazilian Billionaire Jorge Paulo Lemann

2. Carvana Co. (NYSE: CVNA)

Lemann’s Stake Value: $60,956,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 22.63%
Number of Hedge Fund Holders: 64

Carvana Co. (NYSE: CVNA) is an American company, which operates an e-commerce platform for buying and selling used cars. The company was founded in 2012 and stands second on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. Carvana shares have gained a whopping 128.44% over the last 12 months.

On June 25, Wells Fargo analyst Zachary Fadem raised the price target on Carvana to $360 from $340 and kept an “Overweight” rating on the shares. On May 6, Carvana Co. (NYSE: CVNA) posted earnings results for the first three months of 2021. The earnings per share was -$0.46, beating market predictions by $0.21. The revenue over the period was $2.25 billion, beating the estimates by $300 million. 

In the first quarter of 2021, 3G Capital increased its stake in Carvana Co. (NYSE: CVNA) by 133% to 232,300 shares. The company is also getting the attention of the smart money, as 64 hedge funds tracked by Insider Monkey reported owning stakes in the company in the first quarter of 2021, up from 63 funds a quarter earlier.

Steel City Capital LP, in their first quarter 2021 investor letter, mentioned Carvana Co. (NYSE: CVNA). Here is what the fund said:

“Carvana’s (CVNA) 4Q’20 results weren’t particularly great. EBITDA was negative ($70) million, a stark turnaround on a sequential basis from a first-ever EBITDA profit of $21 million in 3Q’20. The culprit was a steep drop off in retail unit GPU ($1,265 vs. $1,857) and wholesale unit GPU ($358 vs. $1,113) as some of the COVID-driven aberrations in the used car market began to abate.

The company’s presentation of EBITDA (calculated “bottom up”) is dubious, as it commingles non-operating items including mark-to-market changes in its retained securitization portfolio. With the exception of 1Q’20, when ABS markets were going haywire, this line item provided a tailwind throughout 2020, including a gain of $5 million in 4Q’20. Also on the non-operating self-help front, management released a reserve for vehicle service contract cancellations in 4Q’20, adding another $7 million to EBITDA, and boosting “Other” GPU by $96…” (Click here to see the full text)