In this article, we discuss the 10 stocks to buy according to Robert F. Smith’s Vista Equity Partners.
Robert F. Smith is an American businessman, chemical engineer, and investor. He was born on December 1st, 1964 and grew up in an African-American middle-class neighborhood. Robert Smith was only in high school when he got selected for an internship position in Bell Labs. He later graduated with a bachelor’s in chemical engineering from Cornwall University. After completing his MBA, Smith worked as a chemical engineer for The Goodyear Tire and Rubber Company and Kraft General Foods. He then honed his skills in tech investment banking during a tenure at Goldman Sachs.
In 2000, he founded Vista Equity Partners to invest in businesses that develop technology, software and data. Over the years, Vista has added several flagship equity funds and credit funds to its portfolio, including its first fund, the Vista Credit Opportunities Fund, which raised $196 million. Vista has also opened several funds that specifically target middle-market companies and emerging technology companies. The company owns a permanent capital investment fund, Vista Equity Partners Perennial, which focuses on growing vertical market software companies.
As Robert Smith’s career progressed, so did the names in his portfolio grow in magnitude. Some recognizable companies in his extensive portfolio as of the second quarter include Amazon.com Inc. (NASDAQ:AMZN), Uber Technologies Inc. (NYSE:UBER), Roku Inc. (NASDAQ:ROKU), to name a few.
In 2018, Vista was named the top software investor of the past decade by Pitchbook. As of May 2020, Vista had more than $57 billion in capital commitments.
usbotschaftberlin, Public domain, via Wikimedia Commons
Our Methodology
Here is our list of the 10 stocks to buy according to Robert F. Smith’s Vista Equity Partners. These were picked based from the Q2 portfolio of Vista Equity.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Stocks to Buy According to Robert Smith’s Vista Equity Partners
10. Hubspot Inc. (NYSE:HUBS)
Vista Equity Partners’ Stake Value: $37,833,000
Percentage of Vista Equity Partners’ 13F Portfolio: 0.4%
Number of Hedge Fund Holders: 54
HubSpot (NYSE: HUBS) is an American developer offering cloud-based marketing services and a sales software platform to aid enterprise companies in their growth. The company specializes in customer relationship management (CRM), content management software (CMS), marketing, and other management solutions. Currently, Hubspot Inc. (NYSE:HUBS) is located in more than 120 countries and caters to 121,000 customers.
Early in August, Hubspot Inc. (NYSE:HUBS) announced its financial results for the second quarter of 2021, which effectively ended on June 30th.
9. Stamps.com Inc. (NASDAQ:STMP)
Vista Equity Partners’ Stake Value: $81,513,000
Percentage of Vista Equity Partners’ 13F Portfolio: 0.87%
Number of Hedge Fund Holders: 27
Stamps.com Inc. (NASDAQ:STMP) is an American public company that provides internet-based mailing and shipping services. The company is approved by the USPS and allows customers to buy and print postage online. Stamps.com Inc. (NASDAQ:STMP) is also a participant in the USPS’s Information Based Indicia Program (IBIP), an initiative spearheaded by the Postal Technology Management group at the Postal Service.
8. Lightspeed POS Inc. (NYSE:LSPD)
Vista Equity Partners’ Stake Value: $115,977,000
Percentage of Vista Equity Partners’ 13F Portfolio: 1.23%
Number of Hedge Fund Holders: 29
Lightspeed Commerce (NYSE:LSPD) is a point-of-sale and e-commerce software provider based in Montreal, Quebec, Canada. With offices in Montreal, New York, Ottawa, Santa Cruz, Toronto and Amsterdam, the company offers its services to 100,000+ retail, restaurant, and hospitality businesses, spanning over 100 countries.
In the second quarter of 2021, Lightspeed Commerce (NYSE:LSPD) announced they had generated a total revenue of $45.5 million, exhibiting an increase of 62%. This also included payments revenue worth $41.1 million for recurring software. They also announced a gross margin of 60%, with profits increasing by 42% versus Q2 of 2020.
7. UiPath Inc. (NYSE:PATH)
Vista Equity Partners’ Stake Value: $129,467,000
Percentage of Vista Equity Partners’ 13F Portfolio: $1.38
Number of Hedge Fund Holders: 46
UiPath Inc. (NYSE:PATH) is a global software company for Robotic Process Automation (RPA) founded in Romania and headquartered in New York City. The company has sophisticated software that monitors user activity, and uses that data to automate repetitive front and back office tasks. This especially covers tasks performed using business software such as CRMs and ERPs.
6. SentinelOne Inc. (NYSE:S)
Vista Equity Partners’ Stake Value: $146,317,000
Percentage of Vista Equity Partners’ 13F Portfolio: 1.56%
Number of Hedge Fund Holders: 67
SentinelOne Inc. (NYSE:S) is a cybersecurity startup based in Mountain View, California. The American cybersecurity company has recently announced that new Network Detection and Response (NDR) integrations with the companies Arista, Fidelis Cybersecurity, and Vectra are now available through the SentinelOne Singularity Marketplace which is an expanding ecosystem providing unified visibility, protection, and automation.
5. Knowbe4 Inc. (NASDAQ:KNBE)
Vista Equity Partners’ Stake Value: $513,859,000
Percentage of Vista Equity Partners’ 13F Portfolio: 5.48%
Number of Hedge Fund Holders: 9
Knowbe4 Inc. (NASDAQ:KNBE) is a Clearwater, Florida-based platform for security awareness training and simulated phishing attacks.
The company recently announced their second quarter financial results for the fiscal year of 2021 where total GAAP revenue increased 43.0% year-over-year to $59.4 million. Annual recurring revenue experienced a surge of 42.4% year-over-year to $240.6 million. Knowbe4 Inc. (NASDAQ:KNBE) also stated that cash flow from operations had amassed at $14.1 million and free cash flow was $12.8 million. Furthermore, the total number of customers for the company have now reached over 41,000 in number.
4. Ping Identity Holding Corp. (NYSE:PING)
Vista Equity Partners’ Stake Value: $612,240,000
Percentage of Vista Equity Partners’ 13F Portfolio: 6.53%
Number of Hedge Fund Holders: 25
Ping Identity Holding Corp. (NYSE:PING) is an American software company headquartered in Denver, Colorado.
For the second quarter of the fiscal year 2021, Ping Identity Holding Corp (NYSE:PING) announced that its Annual Recurring Revenue of $279.6 million grew 19% from last year. Revenue also grew 34% year-over-year to $78.9 million, of which 93% was subscription-based.
3. Integral Ad Science Holding Corp. (NASDAQ:IAS)
Vista Equity Partners’ Stake Value: $1,942,340,000
Percentage of Vista Equity Partners’ 13F Portfolio: 20.73%
Number of Hedge Fund Holders: 30
Integral Ad Science Holding Corp. (NASDAQ:IAS) is an American publicly owned technology company that analyzes the value of digital advertising placements. Recently they announced an expanded partnership with Viant Technology Inc. (NASDAQ:DSP), a leading people-based advertising software company to integrate Integral Ad Science Holding Corp.’s (NASDAQ:IAS) CTV fraud pre-bid solution within the Adelphic advertising software. Through the expanded partnership, brands and agencies registered with Viant can now optimize their CTV campaigns to avoid known sources of bot fraud and other forms of invalid traffic.
For the second quarter of 2021, the company announced total revenue of $75.1 million, featuring a 55% increase compared to $48.3 million in the second quarter of 2020, which had been impacted negatively by the Covid-19 pandemic.
2. Jamf Holding Corp. (NASDAQ:JAMF)
Vista Equity Partners’ Stake Value: $2,123,991,000
Percentage of Vista Equity Partners’ 13F Portfolio: 22.66%
Number of Hedge Fund Holders: 19
Jamf Holding Corp. (NASDAQ:JAMF) is a software company known for being the developer of Jamf Pro, an application widely used by system administrators to configure and automate IT administration tasks for Apple operating systems such as macOS, iOS, iPadOS, and tvOS devices. Jamf Holding Corp. (NASDAQ:JAMF), the torchbearer for Apple Enterprise Management, announced it was prepared to support and extend key functionality in Apple’s iOS 15, iPadOS 15 and tvOS 15 releases, which became available two weeks ago. Jamf Holding Corp.(NASDAQ:JAMF) offered same-day support, allowing customers to upgrade to the latest operating system the day it went live.
Jamf Holding Corp. (NASDAQ:JAMF) has also acquired SecuredTouch, a leader in fraud and bot detection and mitigation, to integrate advanced fraud detection capabilities into the PingOne Cloud Platform. In addition, the also acquired Wandera, a cloud security and access provider for mobile devices, on July 1, 2021.
1. Datto Holding Corp. (NYSE:MSP)
Vista Equity Partners’ Stake Value: $3,166,901,000
Percentage of Vista Equity Partners’ 13F Portfolio: 33.8%
Number of Hedge Fund Holders: 12
Datto, Inc. (NYSE:MSP) is an American cybersecurity and data backup company based in Norwalk, Connecticut. In 2017, it became a subsidiary of Vista Equity Partners and merged with Autotask Corporation.
Datto, Inc.(NYSE:MSP) announced the commercial availability of Datto Continuity for Microsoft Azure, a comprehensive Business Continuity and Disaster Recovery (BCDR) solution that protects Managed Service Providers (MSPs) and the data of their clientele in the public cloud from malicious ransomware attacks and security breaches.
You can also take a peek at 10 Best Stocks to Buy According to Highbridge Capital and 10 Best Stocks to Buy According to Bruce Berkowitz’s Fairholme Capital.
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Disclosure: 10 Stocks to Buy According to Robert Smith’s Vista Equity Partners is originally published on Insider Monkey.
