In this piece, we will take a look at the 9 latest stock picks of Chinese billionaire Chen Tianqiao’s Shanda Asset Management.
Mr. Chen Tianqiao is a Chinese billionaire who is in charge of the Shanda Asset Management firm. He lives in California, United States, and his investment firm is a spinoff from an online gaming company that he founded in China in 1999. This company, dubbed Shanda Interactive Entertainment Limited, became the first Chinese online gaming company to publicly sell its shares on an American stock market when it listed its shares on the NASDAQ in 2004.
Since then, Shanda Entertainment has transformed itself into a private hedge fund, after it spun off its gaming division in 2009, which managed to raise $1 billion by selling its shares under the ticker NASDAQ:GAME. Following the spin-off, Mr. Chen and other Shanda partners took the company private, in a transaction valued at more than $2 billion.
The hedge fund executive moved to the United States from Singapore in 2017, after having lived in the island nation with his wife for eight years. Over the years, his net worth has dropped, and according to Forbes Magazine, Mr. Chen was worth $1.8 billion as of 10th December 2021, marking a more than 50% drop in his net worth since 2017, when he was valued at $4 billion. He is also credited to be the pioneering force in China’s online gaming industry, owing to the fact that his company was the first to enter the space.
Shanda Asset Management is headquartered in Menlo Park, California, and Mr. Chen is its chief executive officer and chairman. Its investment portfolio was worth $938 million as of the third quarter of last year. This marks for a sharp drop over the second quarter, by the end of which the investment company had an asset value of $1.2 billion, which itself marked for a roughly $600 million drop over its value of $1.8 billion at the end of last year. A brief look at its holdings reveals that the firm’s portfolio is spread across companies operating in several different segments. These segments cover semiconductor fabrication, online retailing, consumer electronics, supermarkets, aviation, financial payments, and music streaming to name a few.
The hedge fund has invested in 64 companies according to its Q3 2021 investment portfolio, and the top holdings are concentrated in chip fabrication, technology, and retail. Some of its largest investments are in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Our Methodology
We picked these stocks from the third quarter portfolio of Shanda Asset Management. The firm added these stocks in its portfolio in the third quarter of 2021.
9 Latest Stock Picks of Chinese Billionaire Chen Tianqiao’s Shanda Asset Management
9. Invitae Corporation (NYSE:NVTA)
Shanda Asset Management’s Stake Value: $1 million of CALL Options
Percentage of Shanda Asset Management’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 24
Invitae Corporation (NYSE:NVTA) is an American company that extracts human genetic information through tests and provides it to healthcare professionals and patients to improve their decision making. Its tests cover cancer, neurology, cardiology, and pediatrics among other areas.
Mr. Chen’s Shanda Asset Management bought 40,000 Call options for Invitae Corporation (NYSE:NVTA) in the third quarter of last year, which were worth $1 million and represented 0.11% of its portfolio. During the same time period, 24 of the 867 hedge funds polled by Insider Monkey owned the company’s shares.
Wells Fargo lowered its price target to $25 from $35 in November 2021, outlining that the company might be unable to broaden its competitive advantages.
Invitae Corporation (NYSE:NVTA) joins Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in the list of Mr. Chen’s favorite stocks.
Invitae Corporation (NYSE:NVTA)’s largest investor is Catherine D. Wood’s ARK Investment Management which owns 25 million shares worth $736 million.
8. Archer Aviation Inc. (NYSE:ACHR)
Shanda Asset Management’s Stake Value: $1.9 million
Percentage of Shanda Asset Management’s 13F Portfolio: 0.2%
Number of Hedge Fund Holders: 28
Archer Aviation Inc. (NYSE:ACHR) is a Californian upstart that aims to capitalize on the recent interest and growth in companies using alternative fuels for air transport and mobility. The company is designing and developing electric vertical take off and landing (eVTOL) aircraft for passenger use.
Since it’s a startup, Archer Aviation Inc. (NYSE:ACHR) exited its third quarter with a GAAP EPS of -$2, alongside $796 million in cash on the back of quarterly capital expenditure of $1.1 million. Cantor Fitzgerald set a $14 price target and an Overweight rating for the company’s shares in November 2021, outlining that it is placed strategically well in its industry niche.
During the third quarter of last year, Shanda Asset Management bought 220,000 Archer Aviation Inc. (NYSE:ACHR) shares. These were worth $1.9 million and represented 0.2% of its portfolio. 28 of the 867 hedge funds part of Insider Monkey’s research for Q3 2021 held stakes in the company.
Glenn Russell Dubin’s Highbridge Capital Management is Archer Aviation Inc. (NYSE:ACHR)’s largest shareholder, through a $21 million stake owned via 2.2 million shares.
7. Lilium N.V. (NASDAQ:LILM)
Shanda Asset Management’s Stake Value: $1.9 million
Percentage of Shanda Asset Management’s 13F Portfolio: 0.2%
Number of Hedge Fund Holders: 19
Lilium N.V. (NASDAQ:LILM) is an aviation company that aims to develop electric aircraft that is capable of vertically taking off and landing. Referred to as eVTOL, the aircraft will be designed to quickly transport goods and people, as part of a growing industry that is witnessing a flurry of startups and investment.
Mr. Chen’s Shanda Asset held 186,000 Lilium N.V. (NASDAQ:LILM) shares as of Q3 2021, in a stake worth $1.9 million and representing 0.2% of its portfolio. A survey of 867 hedge funds conducted by Insider Monkey for the same time period revealed that 19 had owned the company’s shares.
At the end of its third quarter, Lilium N.V. (NASDAQ:LILM) had a cash balance of $529 million, which appeared sufficient after its operational spending of $56 million for the three months. Oppenheimer set a $24 price target for the company in September 2021, outlining that the firm’s technology has performance and safety advantages and that its regulatory progress was satisfactory.
Lilium N.V. (NASDAQ:LILM)’s largest shareholder is Carl Tiedemann and Michael Tiedemann’s TIG Advisors. It owns 1.6 million shares worth $17 million.
6. Unity Software Inc. (NYSE:U)
Shanda Asset Management’s Stake Value: $2.5 million
Percentage of Shanda Asset Management’s 13F Portfolio: 0.26%
Number of Hedge Fund Holders: 36
Unity Software Inc. (NYSE:U) provides a three-dimensional platform for a host of consumer electronic devices such as smartphones, headsets, gaming consoles, and personal computers. This platform lets its users, which are primarily content developers, run their products and earn money from them.
Unity Software Inc. (NYSE:U) earned $286 million in revenue and -$0.06 in non-GAAP EPS for its third quarter, outpacing Wall Street estimates for both metrics. Credit Suisse raised the company’s price target to $185 from $160 in November 2021, outlining that Unity Software Inc. (NYSE:U)’s strong technologies have a bright future.
Shanda Asset Management took a $2.5 million stake worth 0.26% of its portfolio in Unity Software Inc. (NYSE:U) during Q3 2021. 36 of the 867 hedge funds part of Insider Monkey’s research for the same time period owned the company’s shares. The company also offered $1.5 billion in debt to potential investors in mid-November 2021 in the form of convertible notes offering. A key strength of Unity Software Inc. (NYSE:U)’s platform is that it allows developers to build their software product only once and then ensure that it can run and support 20 different software platforms. Examples of these platforms include the iOS and Android smartphone ecosystems.
Unity Software Inc. (NYSE:U)’s largest investor is Jim Davidson, Dave Roux, and Glenn Hutchins’s Silver Lake Partners. This is due to it owning 40 million shares worth $5 million.
Along with the Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com, Inc. (NASDAQ:AMZN), Unity Software Inc. (NYSE:U) has made its way into Mr. Chen’s hot stock picks.
5. Joby Aviation, Inc. (NYSE:JOBY)
Shanda Asset Management’s Stake Value: $2.99 million
Percentage of Shanda Asset Management’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 21
Joby Aviation, Inc. (NYSE:JOBY) is an American company headquartered in California. Like some of the other companies that are a part of Shanda Asset’s new stock picks, the company is developing electric vertical take-off and landing (eVTOL) aircraft. Joby Aviation, Inc. (NYSE:JOBY) is also known for its partnership with the ride-sharing company Uber, which has invested in it.
Joby Aviation, Inc. (NYSE:JOBY)’s GAAP EPS for its fiscal Q3 stood at -$0.20, with an operating income of -$55.9 million and $1.4 billion in cash and short-term investments. Morgan Stanley set a $16 price target for the company in September 2021, sharing that the eVTOL designer is a strong first mover in a $1 trillion market.
Mr. Chen’s hedge fund took a $2.9 million stake in Joby Aviation, Inc. (NYSE:JOBY) shares during the third quarter of last year. This represented 0.3% of its portfolio and came through buying 298,000 shares. In Q3 2021, according to Insider Monkey’s research, 21 of 867 hedge funds had stakes in the eVTOL company.
4. Atea Pharmaceuticals, Inc. (NASDAQ:AVIR)
Shanda Asset Management’s Stake Value: $3.5 million
Percentage of Shanda Asset Management’s 13F Portfolio: 0.36%
Number of Hedge Fund Holders: 25
Atea Pharmaceuticals, Inc. (NASDAQ:AVIR) is an American pharmaceutical company whose products cover several diseases such as viral infections from the dengue virus and hepatitis C. It is also developing a treatment for the COVID-19 coronavirus.
As Q3 2021 came to an end, Mr. Chen’s Shanda Asset Management bought 100,000 Atea Pharmaceuticals, Inc. (NASDAQ:AVIR) shares. These were worth $3.5 million and represented 0.36% of its portfolio. During the same time period, 25 of the 867 hedge funds polled by Insider Monkey owned a stake in the pharmaceutical company.
Peter Kolchinsky’s RA Capital Management is Atea Pharmaceuticals, Inc. (NASDAQ:AVIR)’s largest investor through a $190 million stake via 5.4 million shares.
3. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Shanda Asset Management’s Stake Value: $6.9 million
Percentage of Shanda Asset Management’s 13F Portfolio: 0.72%
Number of Hedge Fund Holders: 61
Intuitive Surgical, Inc. (NASDAQ:ISRG) is an American firm that sells surgical products in the country and globally. Its products allow medical professionals to practice their skills, conduct a variety of surgeries such as those involving the heart and gynecology, alongside augmented reality imaging products.
In its fiscal Q3, Intuitive Surgical, Inc. (NASDAQ:ISRG) brought in $1.4 billion in revenue and $1.19 in non-GAAP EPS, beating analyst estimates for both. UBS raised its price target to $352 from $323 in October 2021, sharing that supply chain constraints are not as serious as imagined.
Shanda Asset Management bought 21,000 Intuitive Surgical, Inc. (NASDAQ:ISRG) shares during the third quarter of last year. This enabled it to take a $6.9 million stake in the company which represented 0.72% of its portfolio. 61 of 867 hedge funds researched by Insider Monkey in Q3 2021 owned the company’s shares.
Wells Fargo raised the surgical equipment provider’s price target to $381 from $354 in October 2021, outlining that the strong quarterly earnings had merited the increase.
Intuitive Surgical, Inc. (NASDAQ:ISRG)’s largest investor is Ken Fisher’s Fisher Asset Management who owns 1.3 million shares worth $1.3 billion.
Ensemble Capital mentioned Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q1 2021 investor letter outlining that:
“Notable detractors to the Fund’s returns this quarter (included) Intuitive Surgical. Intuitive Surgical’s (6.3% weight in the Fund) growth slowed in 2020 as COVID hit the brakes on many elective surgeries. Given continued COVID-related risks in the US and Europe in 2021, it’s still unclear as to when elective surgeries recover to more normal levels. As such, hospitals may be holding off on planned surgical robot investments until demand rebounds. That said, in Asia, where COVID has been well contained, Intuitive Surgical’s procedures and systems utilizations improved, which bodes well for recovery in the US and EU. Most procedures can’t be delayed indefinitely or canceled, so we continue to expect a resumption of strong, durable growth as the pandemic recedes.”
2. New Oriental Education & Technology Group Inc. (NYSE:EDU)
Shanda Asset Management’s Stake Value: $7.6 million CALL Options
Percentage of Shanda Asset Management’s 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 32
New Oriental Education & Technology Group Inc. (NYSE:EDU) is a Chinese private education provider. Its services include college and school education programs alongside entry test preparations.
Mr. Chen’s hedge fund bought 3.7 million call options for New Oriental Education & Technology Group Inc. (NYSE:EDU) during Q3 2021. These were worth $7.6 million and represented 0.79% of its portfolio. Out of 867 hedge funds part of Insider Monkey’s third-quarter 2021 research, 32 had owned New Oriental Education & Technology Group Inc. (NYSE:EDU)’s shares.
Jonathan Guo’s Yiheng Capital is New Oriental Education & Technology Group Inc. (NYSE:EDU)’s largest investor through owning 39 million shares worth $80 million.
New Oriental Education & Technology Group Inc. (NYSE:EDU) was mentioned by Polen Capital in its Q3 2021 investor letter. Polen, which exited its position, outlined that:
“The quarter’s leading detractors were Chinese companies that were impacted by the CCP’s regulatory crackdown and liquidity concerns at property developer Evergrande. New Oriental Education—the largest provider of private educational services in China—moved sharply lower in July after policymakers implemented new rules which effectively turned Chinese tutoring companies into non-profits. Looking at New Oriental Education, we closed our position as soon as government policy became clear and used the proceeds to allocate to existing holdings.
1. Uber Technologies, Inc. (NYSE:UBER)
Shanda Asset Management’s Stake Value: $35.8 million CALL Options
Percentage of Shanda Asset Management’s 13F Portfolio: 3.71%
Number of Hedge Fund Holders: 143
Uber Technologies, Inc. (NYSE:UBER) is an American company known for its ridesharing platform that kicked off the global interest in using consumer electronics and technology to connect drivers with riders. It operates through its smartphone application which aims to provide riders with conveniently sourced rides.
During Q3 2021, Shanda Asset Management bought 800,000 Uber Technologies, Inc. (NYSE:UBER)’s call options. These were worth $35.8 million and represented 3.71% of its portfolio. For the same time period, 143 of the 867 hedge funds polled by Insider Monkey owned a stake in the company.
In its Q3, Uber Technologies, Inc. (NYSE:UBER) earned $4.8 billion in revenue and -$1.28 in GAAP EPS, beating analyst revenue estimates and missing those for EPS. In November 2021, Stifel reduced the company’s price target from $58 to $55, outlining that recent circumstances merit a small reduction in estimates due to an unpredictable environment.
Uber Technologies, Inc. (NYSE:UBER)’s largest investor is Brad Gerstner’s Altimeter Capital Management who owns 24.5 million shares worth a cool $1 billion.
Uber Technologies, Inc. (NYSE:UBER) was mentioned by ClearBridge Investments in its Q2 2021 investor letter, which stated that:
“The pandemic has also brought attention to the question of gig worker employment status for companies, including ClearBridge holdings Uber and Lyft. In the U.K., Uber proactively classified its drivers as “workers” ahead of final rulings from the British court system. The worker status in the U.K. is a designation between self-employed and employed status that entitles drivers to minimum wage, holiday pay and in some cases a pension.
ClearBridge has engaged with Uber on labor issues since its IPO, and we have given feedback over that time to the CEO, CFO, Chief Legal Officer and Investor Relations on labor relations as well as strategy and communications. Uber’s agreement on this designation is ahead of other competitors in the market and the legal mandate represents a step forward in the company’s thinking about labor. The agreement represents a short-term hit to earnings, yet in some ways it places Uber ahead of the market in its ability to balance labor and shareholder interests. Workers benefit from improved conditions, with new contributions amounting to roughly 3% of a driver’s earnings, while Uber establishes more certainty on costs and visibility into its regulatory environment and operation conditions in the future.”
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Disclosure: None. 9 Latest Stock Picks of Chinese Billionaire Chen Tianqiao’s Shanda Asset Management is originally published on Insider Monkey.
