In this article, we discuss 10 stocks to buy according to Richard Scott Greeder’s Broad Bay Capital.
Richard Scott Greeder has been a founding partner and limited partner at Broad Bay Capital since November 1, 2015. He holds a more than 75% ownership stake in Broad Bay Capital. It is a New York-based hedge fund.
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At the end of Q2 2022, Broad Bay Capital’s 13F portfolio had a value of over $638.83 million, compared to $786.84 million in the previous quarter. The hedge fund made investments in several industries during the quarter, with materials, industrials, consumer staples, and information technology making up a smaller portion of the portfolio as compared to consumer discretionary, finance, and communications, which were more dominant in the portfolio composition. Some of the most prominent equities in the portfolio of Broad Bay Capital in the second quarter of 2022 are The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON), and Levi Strauss & Co. (NYSE:LEVI).
Our Methodology
We picked the top 10 stocks from the Q2 2022 portfolio of Greeder’s hedge fund. We sorted the list using data from Insider Monkey’s database of 895 elite hedge funds as of the second quarter of 2022, which was used to gauge hedge fund sentiment around the securities.
Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital
10. Boot Barn Holdings, Inc. (NYSE:BOOT)
Broad Bay Capital’s Stake Value: $29,838,000
Percentage of Broad Bay Capital’s 13F Portfolio: 4.67%
Number of Hedge Fund Holders: 34
Boot Barn Holdings, Inc. (NYSE:BOOT) manages specialty shopping malls. The business offers western and work-related footwear, clothes, and accessories in the United States. As of July 27, Boot Barn Holdings, Inc. (NYSE:BOOT) had added 11 more shops to its portfolio, bringing the total to 311. The ROCE for Boot Barn Holdings is 28%. That represents a reasonable return, above the industry average of 17% for Specialty Retail.
According to Insider Monkey’s database of elite hedge funds, 34 funds reported owning stakes in Boot Barn Holdings, Inc. (NYSE:BOOT) at the end of Q2 2022, up from 33 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP held a leading position in Boot Barn Holdings, Inc. (NYSE:BOOT), with almost 650,545 shares worth $44.83 million.
Boot Barn Holdings, Inc. (NYSE:BOOT) was no longer considered a favorable Fresh Pick by Baird analyst Jonathan Komp on August 12. However, he still maintained an ‘Outperform’ rating and a $90 price target on the stock.
Broad Bay Capital initiated its position in Boot Barn Holdings, Inc. (NYSE:BOOT) during the first quarter of 2020, purchasing shares worth over $2.47 million. At the end of Q2 2022, the hedge fund held stakes valued at $29.84 million in the company. Boot Barn Holdings, Inc. (NYSE:BOOT) represented 4.67% of the hedge fund’s 13F portfolio. In addition, the hedge fund raised its stake in the firm by a whopping 301%.
Like The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON), and Levi Strauss & Co. (NYSE:LEVI), Richard Scott Greeder was bullish on Boot Barn Holdings, Inc. (NYSE:BOOT) in the second quarter of 2022.
Wasatch Global Investors mentioned Boot Barn Holdings, Inc. (NYSE:BOOT) in its Q4 2021 investor letter. Here is what the fund said:
“The top contributor to Fund performance for the fourth quarter was Boot Barn Holdings, Inc. (BOOT)—a specialty retailer offering increasingly popular Western and work-related apparel, footwear and accessories. Boots are somewhat resistant to online competition because they often require specialized fitting. The company has benefited from its economies of scale and multi-channel business model, which have kept revenues flowing during virus-related shutdowns. Stimulus payments by the federal government to consumers have helped as well. Boot Barn’s private-label brands, built around well-known personalities in the music business, have enabled the company to convert higher portions of its revenues into bottom-line profits. For most of the period since March 2020, Boot Barn’s stock rallied on these positive conditions—and this rally continued in the fourth quarter. We consider Boot Barn’s management to be excellent, and we’ve continually added to our position on periodic price weakness within the context of an overall upward trajectory in the stock.”
9. Rover Group, Inc. (NASDAQ:ROVR)
Broad Bay Capital’s Stake Value: $30,926,000
Percentage of Broad Bay Capital’s 13F Portfolio 4.84%
Number of Hedge Fund Holders: 17
Rover Group, Inc. (NASDAQ:ROVR) is based in Seattle and it operates an online pet care marketplace. Rover connects pet owners with service providers that offer both daytime services like dog boarding and in-home pet sitting, as well as services like dog day-care, dog walking, and drop-in visits.
Robert Mollins, an analyst at Gordon Haskett, downgraded Rover Group, Inc. (NASDAQ:ROVR) from ‘Buy’ to ‘Hold’ on August 9 and lowered his price objective from $5.50 to $3.50. The number of hedge funds tracked by Insider Monkey reported owning stakes in Rover Group, Inc. (NASDAQ:ROVR) stood at 17 in Q2 2022, declining from 25 in the previous quarter.
Broad Bay Capital reduced its position in Rover Group, Inc. (NASDAQ:ROVR) by 3% in the second quarter of 2022. This makes Broad Bay Capital’s stake in Rover Group, Inc. (NASDAQ:ROVR) amount to $30.93 million. David Zorub’s Parsifal Capital Management is the most significant stakeholder of Rover Group, Inc. (NASDAQ:ROVR), with 8.59 million shares worth almost $32.28 million.
8. Planet Fitness, Inc. (NYSE:PLNT)
Broad Bay Capital’s Stake Value: $32,985,000
Percentage of Broad Bay Capital’s 13F Portfolio: 5.16%
Number of Hedge Fund Holders: 28
Planet Fitness, Inc. (NYSE:PLNT) runs and franchises gyms under the Planet Fitness name. On September 8, Stifel analyst Chris O’Cull retained a ‘Buy’ recommendation on Planet Fitness, Inc. (NYSE:PLNT) while trimming his price objective from $85 to $82. During the previous two weeks, the stock underperformed the market, which, in his opinion, was caused by a “surprise” senior management resignation.
Broad Bay Capital started building its position in Planet Fitness, Inc. (NYSE:PLNT) in the first quarter of 2020. In Q2 of 2022, the hedge fund held 485,000 shares in the company, valued at $32.99 million. The company represented 5.16% of the hedge fund’s 13F portfolio. Broad Bay Capital elevated its position in Planet Fitness, Inc. (NYSE:PLNT) by 204% in Q2 2022.
Many institutional investors have recently modified their positions in Planet Fitness, Inc. (NYSE:PLNT), as 28 hedge funds held stakes in the company at the end of June 2022, down from 33 in the previous quarter.
In its Q1 investor letter, Wasatch Global Investors mentioned Planet Fitness, Inc. (NYSE:PLNT). Here is what the fund said:
“At the other end of the spectrum, we completely sold our position in Planet Fitness, Inc. (PLNT) even though some speculators would consider the stock to be a reopening play. The company owns and runs a chain of fitness clubs. The stock spiked on optimism that people will return to pre-pandemic levels of exercise at group facilities. But recent earnings for Planet Fitness didn’t impress us, and we decided the stock was too expensive based on our projection for the company’s growth rate.”
7. Ingevity Corporation (NYSE:NGVT)
Broad Bay Capital’s Stake Value: $50,512,000
Percentage of Broad Bay Capital’s 13F Portfolio: 7.9%
Number of Hedge Fund Holders: 19
Ingevity Corporation (NYSE:NGVT), based in North Charleston, South Carolina, is a leading manufacturer of specialized chemicals and high-performance activated carbon products. The ROE for Ingevity Corporation (NYSE:NGVT) is 21.70%, higher than the industry average for Chemicals of 17%.
In the second quarter of 2022, Jeff Ubben’s Inclusive Capital disclosed a prominent position in Ingevity Corporation (NYSE:NGVT), consisting of 2.15 million shares worth about $135.84 million. In addition, according to Insider Monkey’s Q2 data, 19 hedge funds were long Ingevity Corporation (NYSE:NGVT), compared to 20 funds in the prior quarter.
The fund first bought a stake in Ingevity Corporation (NYSE:NGVT) in the second quarter of 2019. As a result, Broad Bay Capital owned 800,000 shares in Ingevity Corporation (NYSE:NGVT) at the end of Q2 2022, valued at over $50.51 million, representing 7.9% of the portfolio of the hedge fund.
6. Eventbrite, Inc. (NYSE:EB)
Broad Bay Capital’s Stake Value: $50,837,000
Percentage of Broad Bay Capital’s 13F Portfolio: 7.95%
Number of Hedge Fund Holders: 21
Eventbrite, Inc. (NYSE:EB) is an event management and ticketing website with headquarters in San Francisco, which allow users to search, create, and promote nearby events. On July 14, Piper Sandler analyst Matt Farrell initiated Eventbrite, Inc. (NYSE:EB)’s coverage, rating the stock as ‘Overweight’ with a $13 price target.
Eric Bannasch’s Cadian Capital reported a significant stake in Eventbrite, Inc. (NYSE:EB) in the second quarter of 2022, with 7.32 million shares worth $75.23 million. In addition, according to Insider Monkey’s Q2 database, 21 hedge funds were long Eventbrite, Inc. (NYSE:EB), compared to 18 funds in the prior quarter.
At the end of Q2 2022, Broad Bay Capital held a stake worth $50.84 million in Eventbrite, Inc. (NYSE:EB), selling 50,000 shares during the quarter. As a result, the company represented 7.95% of the hedge fund’s portfolio.
In addition to The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON), and Levi Strauss & Co. (NYSE:LEVI), Eventbrite, Inc. (NYSE:EB) was one of the top stocks to buy according to Richard Scott Greeder’s Broad Bay Capital in the second quarter.
In its second-quarter 2021 investor letter, Artisan Partners mentioned Eventbrite, Inc. (NYSE:EB). Here is what the fund said:
“Eventbrite is the largest software and ticketing platform helping event creators plan, promote and produce live events in small-and-mid markets. The company generates revenue by charging a per-ticket fee on paid tickets and has a strong foothold in the small-and-mid markets—nearly 20X the size of the next largest competitor. We believe Eventbrite is well-positioned to benefit from a sharp increase in demand for live events amid the broader re-opening of the US economy—a dynamic it has already witnessed in Australia with live events bouncing back to approximately 90% of 2019 levels. We expect this to be amplified by significant cost cuts made during the pandemic (>30% of 2019 revenue) remaining in place. Longer term, we believe Eventbrite should benefit from the secular trend toward consumer experiences, an industry growing over 8% per year prior to the pandemic.”
5. Cavco Industries, Inc. (NASDAQ:CVCO)
Broad Bay Capital’s Stake Value: $52,525,000
Percentage of Broad Bay Capital’s 13F Portfolio: 8.22%
Number of Hedge Fund Holders: 21
Cavco Industries, Inc. (NASDAQ:CVCO) manufactures factory-built housing items and sells them mainly via a network of privately owned and business-owned merchants. Broad Bay Capital started building its position in Cavco Industries, Inc. (NASDAQ:CVCO) during the fourth quarter of 2018, buying shares worth over $13.04 million. The hedge fund owned shares worth roughly $52.53 million at the end of Q2 2022. The company represented 8.22% of the hedge fund’s 13F portfolio.
On August 8, Craig-Hallum analyst Greg Palm maintained a ‘Buy’ rating on Cavco Industries, Inc. (NASDAQ:CVCO) while increasing his price objective to $335 from $322. The analyst noted that Cavco Industries, Inc. (NASDAQ:CVCO)’s Q1 performance was good, with revenue and profitability above forecasts.
Cavco Industries, Inc. (NASDAQ:CVCO) experienced a decline in hedge fund sentiment in Q2 2022, as 21 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the period, compared to 26 in the preceding quarter. The aggregate value of stakes held by 21 hedge funds stood at more than $183.12 million.
4. The Liberty SiriusXM Group (NASDAQ:LSXMA)
Broad Bay Capital’s Stake Value: $53,105,000
Percentage of Broad Bay Capital’s 13F Portfolio: 8.31%
Number of Hedge Fund Holders: 44
The Liberty SiriusXM Group (NASDAQ:LSXMA) operates in the US and Canada’s entertainment industry through its subsidiaries. As of December 31, 2021, there were roughly 34 million Sirius XM customers and approximately 6.4 million Pandora subscribers. Broad Bay Capital owns a position worth $53.11 million in The Liberty SiriusXM Group (NASDAQ:LSXMA), representing 8.31% of the fund’s Q2 portfolio.
On August 8, Credit Suisse analyst Brian Russo reaffirmed an ‘Outperform’ rating on The Liberty SiriusXM Group (NASDAQ:LSXMA) while trimming his price objective from $64 to $52. The analyst modified his model to take into consideration Q2 actual performance, including SiriusXM’s Q1 performance, changes in peer trading prices, and Live Nation Entertainment, Inc. (NYSE:LYV)’s exchangeable debt payments.
Warren Buffett’s Berkshire Hathaway held the most prominent stake in The Liberty SiriusXM Group (NASDAQ:LSXMA), with 43.21 million shares worth $1.56 billion. At the end of Q2 2022, 44 hedge funds tracked by Insider Monkey were bullish on The Liberty SiriusXM Group (NASDAQ:LSXMA), down from 46 in the quarter earlier. The consolidated value of these stakes is over $1.70 billion.
Here is what Weitz Investment Management has to say about The Liberty SiriusXM Group (NASDAQ:LSXMA) in its Q2 2022 investor letter:
“We also closed our position in Liberty Braves (NASDAQ:BATRA). Sports franchises possess unique value characteristics, but as a smaller position and with many cheaper alternatives, we elected to move on.”
3. Elastic N.V. (NYSE:ESTC)
Broad Bay Capital’s Stake Value: $55,828,000
Percentage of Broad Bay Capital’s 13F Portfolio: 8.73%
Number of Hedge Fund Holders: 57
Elastic N.V. (NYSE:ESTC) provides technology solutions built to function in multi-cloud settings, be it public or private clouds. Elastic N.V. (NYSE:ESTC) focuses on product innovation to draw clients and grow its business. As a result, the company’s client base expanded by 21% to 19,300 customers over the previous year. In addition, the typical customer spent roughly 30% more, showing that the firm is successful with its “land-and-expand” approach.
Insider Monkey’s hedge fund database reveals that in the first quarter of 2022, 55 funds were bullish on Elastic N.V. (NYSE:ESTC). In the second quarter of 2022, the number rose to 57 hedge funds. In addition, following the company’s analyst day on September 20, Brent Thill of Jefferies increased his price objective on Elastic N.V. (NYSE:ESTC) from $80 to $90 and retained a ‘Hold’ rating on the shares.
According to the 13F filings for the second quarter of 2022, Broad Bay Capital held over 825,000 shares of Elastic N.V. (NYSE:ESTC), amounting to more than $55.83 million. Elastic N.V. (NYSE:ESTC) is the third-largest holding of the hedge fund and represented 8.73% of its 13F portfolio.
Elastic N.V. (NYSE:ESTC) was discussed in Greenhaven Road Capital’s Q2 2022 investor letter. Here’s what the firm said:
“Shares of Elastic Software, which powers the search for customers such as Uber and provides other security software, ended the quarter down approximately 40% for the year. From the share price, you would think that demand is falling off a cliff, but that is not the case. Revenue is growing at 35%, the balance sheet is rock solid, and net revenue retention continues to hover around 130% as current customers increase their purchases with increased usage. While companies not generating positive cash flow have been obliterated in this downturn, this is a very healthy business that will very likely be cash flow positive this fiscal year. When addressing demand on the most recent call, the CEO did not use the term “forced buyer” but he could have:
“We have not seen any indication of slowdown in the demand and the consumption…. these things are mission-critical to them. So from their perspective (customers), as data grows, they need to use Elastic, and they continue to use Elastic and that’s not a place where we see customers trying to make any optimization. So that is an inherent strength for us, and it’s continuing.”
Given Elastic’s growth rates and operating leverage, if the multiple ceases to compress, we see a clear path to 30%+ returns from here, and still higher returns if / when there is any multiple expansion. Their stock may not have forced buyers, but their products do.”
2. The TJX Companies, Inc. (NYSE:TJX)
Broad Bay Capital’s Stake Value: $56,688,000
Percentage of Broad Bay Capital’s 13F Portfolio: 8.87%
Number of Hedge Fund Holders: 49
The TJX Companies, Inc. (NYSE:TJX) works as an off-price retailer of clothing and home goods with the help of its subsidiaries. Marmaxx, HomeGoods, TJX Canada, and TJX International are its four business segments. On September 19, The TJX Companies, Inc. (NYSE:TJX) announced a quarterly dividend of $0.295 per share, in line with the previous.
On September 16, JPMorgan analyst Matthew Boss maintained an ‘Overweight’ rating on the stock while raising his price objective to $80 from $71. As of the end of the second quarter of 2022, 49 hedge funds out of Insider Monkey’s database of 895 funds held stakes in The TJX Companies, Inc. (NYSE:TJX), compared to 55 funds in the previous quarter.
During Q2 2022, Broad Bay Capital sold 109,000 shares of The TJX Companies, Inc. (NYSE:TJX) and held a stake worth over $56.69 million. Panayotis Takis Sparaggis’ Alkeon Capital Management is The TJX Companies, Inc. (NYSE:TJX)’s most significant stakeholder, with 5.71 million shares worth $318.82 million.
ClearBridge Investments shared its outlook on The TJX Companies, Inc. (NYSE:TJX) in its Q4 2021 investor letter. Here’s what was said about the company:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included TJX, an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”
1. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Broad Bay Capital’s Stake Value: $105,715,000
Percentage of Broad Bay Capital’s 13F Portfolio: 16.54%
Number of Hedge Fund Holders: 61
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), a North American company, specializes in modular space and portable storage solutions. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) announced its acquisition of Allied Office Trailers and Storage Containers on September 19. The company expanded its operations in the eastern United States, adding about 8,000 rental assets to its fleet of mobile offices and movable storage containers.
On August 23, Baird analyst Andrew Wittmann maintained an ‘Outperform’ rating on WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) while boosting his price objective to $45 from $42.
Insider Monkey’s data shows that 61 elite hedge funds held stakes in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) at the end of the second quarter, up from 58 funds a quarter earlier. The total value of these stakes is over $1.53 billion. In the second quarter of 2022, Broad Bay Capital held about 3.26 million shares of WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), worth $105.72 million, representing 16.54% of the hedge fund’s total 13F securities.
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) was discussed in the Q4 2021 investor letter of ClearBridge Investments. Here’s what the investment management firm said:
“We added six new positions in the fourth quarter, the largest being WillScot Mobile Mini in the industrials sector. WillScot is the leading manufacturer in the modular office and storage end markets. The company has a multitude of idiosyncratic growth drivers that should support a doubling of free cash flow per share over the next four to five years.”
You can also take a peek at 10 Stocks to Buy According to Bulldog Investors and 10 Stocks to Buy According to Peter Simmie’s Bristol Gate Capital Partners
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Disclosure: None. 10 Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital is originally published on Insider Monkey.
