In this article, we will discuss the 5 best stocks to buy according to Brazilian Billionaire Jorge Paulo Lemann. If you want to skip our detailed analysis of Lemann’s history, investment philosophy, and hedge fund performance, go directly to the 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann.
5. Futu Holdings Limited (NASDAQ: FUTU)
Lemann’s Stake Value: $11,912,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 4.42%
Number of Hedge Fund Holders: 26
Futu Holdings Limited (NASDAQ: FUTU) manages an online brokerage and wealth management platform. It was founded in 2007 and ranks fifth on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. Futu Holdings shares have gained a whopping 334.52% over the last 12 months.
On July 13, Goldman Sachs analyst Shuo Yang initiated a coverage on Futu Holdings Limited (NASDAQ: FUTU) with a “Neutral” rating and price target of $158.27. On June 1, Futu Singapore Pte. Ltd., subsidiary of Futu Holdings Limited (NASDAQ: FUTU), obtained over 100K valuable clients, with user base broadening to over 220K in Singapore after its launch on March 8, 2021. More than 40% of paying clients exhibited interest in trading in the U.S. market. On May 19, Futu Holdings declared earnings for the first quarter of 2021. It reported earnings per share of $1.03, beating market predictions by $0.42. The revenue for the first three months of 2021 was over $283.56 million, beating the estimates by $65.52 million. In the first quarter of 2021 total number of paying clients increased to 789,652, up 231% YoY.
Futu Holdings Limited (NASDAQ: FUTU) is the latest addition in billionaire Jorge Paulo Lemann’s hedge fund portfolio, as 3G Capital bought 75,000 shares of the company, worth $11.91 million. In addition, hedge funds are loading up on Futu Holdings Limited (NASDAQ: FUTU), as Insider Monkey’s data shows that 26 hedge funds held stakes in the company in the first quarter of 2021, compared to 17 funds a quarter earlier.
Tao Value, in its first quarter 2021 investor letter, mentioned Futu Holdings Limited (NASDAQ: FUTU). Here is what the fund has to say about Futu Holdings Limited in its letter:
“Futu is a new “Opportunistic” position. It is an HK based online brokerage & wealth management platform with deep root in technology. Futu sits in the confluence of 3 strong favorable forces of Meteorology, Topography & Commander, yet was underpriced at the time of our entry. In terms of Meteorology, there is a huge addressable market of Chinese domestic middle to upper classes’ wealth being deployed to overseas assets allocation in the next decade. Additionally, the incumbents being disrupted are extremely weak in their digital transformation. On Topography, Futu’s user-centric product design built an intuitive front end and great user experience, while the digital native development framework built solid & reliable back end (including a self-developed order routing & execution system for HK market). This is a rare combination compared to both offline incumbents (who lack flashy front end & UX) & other new online disrupters (who lack solid infrastructure). On Commander factor, founder CEO Li Hua was a Tencent engineer in its early days with deep knowledge in product design and development. Li is said to be a fanatic product manager, to this day still at the front-line, alpha testing any new features. Based on analyses of these factors, I think Futu could compound its revenue at a very high rate with very high certainty and with strong operating leverage, putting our entry price very attractive compared to earning power in 3-5 years. Yet just as we finished building a small position, the price started to take off and more than tripled in a month. When such price action happens, it is obvious that Mr. Market has turned very euphoric to this name. I decided to trim but kept a reasonable position given its growth certainty.”
4. Bilibili Inc. (NASDAQ: BILI)
Lemann’s Stake Value: $14,453,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 5.36%
Number of Hedge Fund Holders: 53
Bilibili Inc. (NASDAQ: BILI) is a Chinese company online entertainment services provider for the young generations. It was founded in 2009 and ranks fourth on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. Shares of the company rallied 137.43% in the last 12 months, resulting in a $44.26 billion market capitalization.
On July 13, China Renaissance analyst Yiwen Zhang initiated a coverage on Bilibili Inc. (NASDAQ: BILI) with a “Buy” rating with a price target of $175. On May 13, Bilibili Inc. declared earnings results for the first three months of 2021. The earnings per share was -$0.29, beating market predictions by $0.07. The revenue over the period was $595.4 million, beating the estimates by $12.04 million. For the second quarter of 2021, the company expects net revenues to be between RMB4.25 billion and RMB4.35 billion.
Bilibili Inc. (NASDAQ: BILI) is the latest addition in billionaire Jorge Paulo Lemann’s hedge fund portfolio, as 3G Capital bought 135,000 shares of the company, worth $14.45 million. In addition, hedge fund sentiment increased for Bilibili in the first quarter of 2021. Insider Monkey’s data shows that 53 elite hedge funds held stakes in the company in the first quarter of 2021, up from 46 funds a quarter earlier.
Tao Value, in its first quarter 2021 investor letter, mentioned Bilibili Inc. (NASDAQ: BILI). Here is what the fund has to say about Bilibili Inc.in its letter:
“Bilibili (ticker: BILI) similarly reported a blast Q3 2020. Bilibili reached average MAU of 197m with high 7.6% pay ratio, showing strong user growth and high engagement. Additionally, the high margin advertisement segment showed exceptionally strong trend, growing 126% yoy. Though surprising to many, I think it is a natural outcome of building an ever-more valuable user generated contents platform. If it is not by ads, I believe these values created by Bilibili will accrue to it in other ways. One interesting data point is that management mentioned the average age of new cohorts are still around 20, indicating it is still in its early stage of a long growth runway. I am happy to see this position played out like how I envisioned in original thesis and will be excited to continue to follow its progress.”
3. Bill.com Holdings, Inc. (NYSE: BILL)
Lemann’s Stake Value: $50,198,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 18.63%
Number of Hedge Fund Holders: 51
Bill.com Holdings, Inc. (NYSE: BILL) is a major supplier of cloud-based software that simplifies financial operations for small and medium-sized businesses. It was incorporated in 2006 and is placed third on the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. Bill shares have offered 152.84% in returns to investors over the course of the past 12 months.
On July 19, Bill.com Holdings, Inc. (NYSE: BILL) acquired Invoice2go for about $625 million. Invoice2go is a leading, mobile-first accounts receivable software supplier and enables small companies and freelancers to enhance their client portfolio, manage accounts, build their brand, and much more. On July 14, Canaccord Genuity analyst Joseph Vafi rated the stock as “Buy,” raising the price target to $223, up from $150.
Jorge Paulo Lemann’s hedge fund increased its stake in Bill.com Holdings, Inc. (NYSE: BILL) by 147% in the first quarter, ending the period with $50.20 million worth of the company’s shares. Tybourne Capital Management is the biggest stakeholder in the company, with 836,716 shares worth $153.27 million.
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)
1. Sea Limited (NYSE: SE)
Lemann’s Stake Value: $64,737,000
Percentage of Jorge Paulo Lemann’s 13F Portfolio: 24.03%
Number of Hedge Fund Holders: 98
Sea Limited (NYSE: SE) is a consumer internet company. The company was incorporated in 2009, and it tops the list of 10 best stocks to buy according to Brazilian billionaire Jorge Paulo Lemann. Sea currently has a $156.11 billion market capitalization and was able to deliver a 177.88% return in the past 12 months.
On July 22, Morgan Stanley analyst Mark Goodridge raised the price target on Sea Limited to $320 from $300 and maintained an “Overweight” rating on the shares. On May 18, Sea Limited (NYSE: SE) posted earnings for the first quarter of 2021. It reported earnings per share of -$0.62, missing market predictions by $0.07. The revenue for the first three months of 2021 was $1.8 billion, beating the estimates by $20 million.
3G Capital holds 290,000 shares in the company worth $64.74 million, representing 24.03% of their portfolio. The hedge fund has increased stakes in Sea Limited (NYSE: SE) by 177% in the past few months. Tybourne Capital Management, with 1.39 million shares, is the biggest stakeholder in the company.
ClearBridge Investments, in their second quarter 2021 investor letter, mentioned Sea Limited (NYSE: SE). Here is what the fund said:
“We have also been active in managing our growth exposure in the IT and Internet sectors. In addition to sales of several emerging growth names, we added a new emerging growth company in Sea Limited. Sea operates a leading global video game platform (Garena), the leading e-commerce platform in Southeast Asia (Shopee) and an emerging payments/digital banking segment (SeaMoney). While the company is investing heavily into e-commerce and payments, we like the fact that this growth is being funded by its highly profitable gaming segment. We see a long runway for growth across Sea’s businesses with multiple opportunities like e-commerce expansion in Latin America not fully factored into the valuation today. The company also has a well-respected management team that has successfully executed in expanding its total addressable market.”
You can also take a peek at 10 Best Tech Stocks to Buy According to Japanese Billionaire Masayoshi Son and 10 Best Dividend Stocks to Buy According to Billionaire Michael Hintze
