In this article, we discuss 5 stocks to buy according to Cheyne Capital. If you want to check out a detailed analysis of the fund’s investment philosophy and current portfolio allocation strategies, go directly to 10 Stocks to Buy According to Cheyne Capital.
5. Switch, Inc. (NYSE:SWCH)
Cheyne Capital’s Stake Value: $4,389,000
Percentage of Cheyne Capital’s 13F Portfolio: 3.7%
Number of Hedge Fund Holders: 14
Switch, Inc. (NYSE:SWCH) provides technical infrastructure. The company declared financial results on August 8 for the three months ending June 30, 2022. Switch, Inc. (NYSE:SWCH) announced consolidated revenue of $168.2 million, a 19% increase over the second quarter of 2021. In addition, the reported EPS came in at $0.02, below the analysts’ estimate by $0.04.
On May 24, Nate Crossett of Berenberg downgraded Switch, Inc. (NYSE:SWCH) from ‘Buy’ to ‘Hold’ with a $34.25 price objective after the firm reached an agreement to be bought by Australian investment fund IFM and DigitalBridge Group, Inc. (NYSE:DBRG) for $34.25 per share.
According to the 13F filings for the second quarter of 2022, Cheyne Capital held 131,000 shares of Switch, Inc. (NYSE:SWCH), amounting to more than $4.39 million. The company represented 3.7% of the hedge fund’s 13F portfolio. Pentwater Capital Management held the most prominent stake in Switch, Inc. (NYSE:SWCH), with 6.53 million shares worth $218.59 million.
4. Vonage Holdings Corp. (NASDAQ:VG)
Cheyne Capital’s Stake Value: $4,710,000
Percentage of Cheyne Capital’s 13F Portfolio: 3.97%
Number of Hedge Fund Holders: 37
Vonage Holdings Corp. (NASDAQ:VG) is a company that provides communication services using cloud-connected devices. Cheyne Capital initiated a new stake in Vonage Holdings Corp. (NASDAQ:VG) in the second quarter of 2022, buying 250,000 shares of the company, valued at $4.71 million.
On July 21, Swedish telecom equipment company Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) successfully closed the $6.2 billion acquisition of Vonage Holdings Corp. (NASDAQ:VG). Ericsson plans to improve the enterprise sector and grow its mobile network business by gaining access to Vonage’s CCaaS, UCaaS, and CPaaS technologies.
Phill Gross and Robert Atchinson’s Adage Capital Management is the largest shareholder of Vonage Holdings Corp. (NASDAQ:VG), with a stake consisting of 5.34 million shares worth more than $100.68 million. Vonage Holdings Corp. (NASDAQ:VG) experienced a decline in hedge fund interest in Q1 2022, as 37 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the period, down from 38 in the preceding quarter.
In its fourth-quarter 2020 investor letter, Adestella Investment Management mentioned Vonage Holdings Corp. (NASDAQ:VG). Here is what the fund said:
“Vonage (VG) – the VG thesis has largely played out as expected. The market has gradually shifted its focus from the declining consumer operations to the growing business ones, highlighted by the API unit. As its legacy home phone VOIP solutions continue to become a smaller and smaller portion of the overall pie, we think this trend will continue. If the API unit can continue to grow at 25-30%, that segment alone covers most of the enterprise value at just a ~6x sales multiple before giving any credit to the sizable UCaaS operations. The API unit’s closest comparable, Twilio (TWLO), currently trades at 31x sales, so it’s not unreasonable to think there’s upside to our estimate here. Shares have returned around 80% since our writeup (and slightly higher from our cost as we added in the weeks that followed), but we’ve maintained most of our position as the key growth drivers remain intact.”
3. Activision Blizzard, Inc. (NASDAQ:ATVI)
Cheyne Capital’s Stake Value: $4,827,000
Percentage of Cheyne Capital’s 13F Portfolio: 4.07%
Number of Hedge Fund Holders: 80
Activision Blizzard, Inc. (NASDAQ:ATVI) develops and sells interactive entertainment products and services. In the second quarter of 2022, Activision Blizzard, Inc. (NASDAQ:ATVI) also joined Cheyne Capital’s portfolio. The hedge fund purchased 62,000 shares of the company, worth $4.83 million.
On August 4, analyst Benjamin Soff of Deutsche Bank cut his price objective on Activision Blizzard, Inc. (NASDAQ:ATVI) from $95 to $84 while reiterating a ‘Hold’ rating on the stock. The analyst had a “balanced judgement on the likelihood” that authorities would accept Microsoft Corporation (NASDAQ:MSFT)’s planned acquisition of Activision. Microsoft Corporation (NASDAQ:MSFT) announced in January this year that it would buy Activision Blizzard, Inc. (NASDAQ:ATVI) for an all-cash deal worth $68.7 billion.
Warren Buffett’s Berkshire Hathaway held a notable stake in Activision Blizzard, Inc. (NASDAQ:ATVI) at the end of the second quarter of 2022. The hedge fund’s position in the company climbed to almost $5.33 billion from $5.15 billion.
Insider Monkey’s data shows that 80 elite hedge funds held stakes in Activision Blizzard, Inc. (NASDAQ:ATVI) at the end of the first quarter, up from 70 funds a quarter earlier. The total value of these stakes is over $9.48 billion, showing considerable growth from stakes worth $3.66 billion owned by hedge funds in Q4 2021.
2. Chesapeake Energy Corporation (NASDAQ:CHK)
Cheyne Capital’s Stake Value: $5,617,000
Percentage of Cheyne Capital’s 13F Portfolio: 4.74%
Number of Hedge Fund Holders: 59
Chesapeake Energy Corporation (NASDAQ:CHK) is a privately held exploration and production firm. Benchmark analyst Subash Chandra commenced coverage of Chesapeake Energy Corporation (NASDAQ:CHK) on August 1, assigning the stock a ‘Buy’ rating and a $137 price target. According to the analyst, Chesapeake has bought $5 billion worth of assets in the previous six months, improving the company’s capital intensity and allowing it to maintain greater production levels with proportionately less money.
In the second quarter of 2022, Cheyne Capital held about 69,265 shares of Chesapeake Energy Corporation (NASDAQ:CHK), worth $5.62 million, representing 4.74% of the hedge fund’s total 13F securities. The hedge fund increased its stake in Chesapeake Energy Corporation (NASDAQ:CHK) by 30% in Q2 2022. Cheyne Capital started building its position in the company in the first quarter of 2022.
According to Insider Monkey’s Q1 data, 59 hedge funds were bullish on Chesapeake Energy Corporation (NASDAQ:CHK), compared to 50 funds in the earlier quarter. Howard Marks’ Oaktree Capital Management held the leading stake in Chesapeake Energy Corporation (NASDAQ:CHK), with roughly 10.50 million shares worth $851.64 million.
Here is what ClearBridge Investments said about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q1 2022 investor letter:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers…. (Click here to read full text).”
1. Schlumberger Limited (NYSE:SLB)
Cheyne Capital’s Stake Value: $6,079,000
Percentage of Cheyne Capital’s 13F Portfolio: 5.13%
Number of Hedge Fund Holders: 58
Schlumberger Limited (NYSE:SLB) globally offers technologies to the energy sector. Schlumberger Limited (NYSE:SLB) is a dependable option when it comes to dividend payouts to shareholders, as the company has been paying a dividend since 1989. On July 22, the company declared a quarterly dividend of $0.175 per share, in line with previous.
Schlumberger Limited (NYSE:SLB) was raised to ‘Buy’ from ‘Hold’ on July 27 by Benchmark analyst Douglas Becker, who set a $55 price objective. The increase in foreign producer activity and expenditure, as well as his forecast that the firm will hit its 25% EBITDA margin objective one quarter earlier in the third quarter of 2023, were the driving forces behind this decision.
Overall, 58 hedge funds reported owning a stake in Schlumberger Limited (NYSE:SLB) at the end of Q1 2022. This was in contrast to 47 hedge funds holding stakes worth $1.22 billion in Schlumberger Limited (NYSE:SLB) at the end of Q4 2021.
Cheyne Capital initiated a position in Schlumberger Limited (NYSE:SLB) in the second quarter of 2022, purchasing 170,000 shares worth $6.08 million. Jean-Marie Eveillard’s First Eagle Investment Management held roughly 27.08 million shares of Schlumberger Limited (NYSE:SLB), valued at $968.33 million, making it a prominent shareholder of the firm.
ClearBridge Investments mentioned Schlumberger Limited (NYSE:SLB) in its Q2 2021 investor letter. Here is what the fund said:
“Schlumberger is a leading oilfield services company that should enjoy both cyclical and secular opportunities over the next market cycle and beyond. On the cyclical front, after years of declining energy service activity and negative pricing, service activity is increasing modestly and pricing is inflecting higher, which is always the key cyclical driver for energy services stocks. In addition, we expect the Middle East to gain share of oil production as ESG considerations limit upstream investment in other regions. As the dominant service provider in the Middle East, Schlumberger is very well-positioned for this shift. On the secular front, Schlumberger has a rapidly growing digital services capability that helps producers operate much more efficiently and with much less waste, which will be a core ESG focus. Finally, Schlumberger is investing directly, and with partners, in energy transition capabilities such as carbon capture, hydrogen and geothermal that should allow Schlumberger to grow and remain viable well beyond the current energy cycle.”
You can also take a peek at 10 Stocks to Buy According to John Hurley’s Cavalry Asset Management and 10 Stocks to Buy According to Centiva Capital.
