In this article, we discuss 10 stocks to buy according to Teresa Barger’s Cartica Management.
In 2009, Teresa Barger cofounded Cartica Management, an alternative asset manager focused on investing in emerging markets, where she presently holds the position of CEO. Before that, she worked with the International Finance Corporation for 21 years, investing in enterprises in emerging markets on almost every continent. Ms. Barger completed her MBA from Yale School of Management and her Bachelor of Arts from Harvard College. Ms. Barger also pursued postgraduate studies at the American University in Cairo.
Cartica Management is a hedge fund that only invests in emerging countries and is primarily owned and run by women. The hedge fund manages a focused portfolio of high-quality developing market enterprises for several of the world’s top institutional investors. Its guiding principle is to actively interact with the management of every portfolio company to look for ways to increase the value of ESG and related aspects. Cartica Management was awarded the Best ESG Active Investor Emerging Markets 2021 at the Capital Finance International (CFI) awards.
Cartica Management has consistently maintained a heavily concentrated portfolio, often with no more than 20 positions. According to the fund’s most recent 13F filing with the SEC as of the end of June, it only had investments in 16 firms, with an aggregate market value of $257.66 million. Cartica Management’s most notable stock picks included Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), MercadoLibre, Inc. (NASDAQ:MELI), and Alibaba Group Holding Limited (NYSE:BABA).
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Our Methodology
Here are 10 stocks to buy according to Teresa Barger’s Cartica Management. These equities were chosen from Barger’s Q2 portfolio. Insider Monkey’s Q2 2022 database, which provides information on almost 900 hedge funds, was used to determine the hedge fund sentiment around the holdings.
Stocks to Buy According to Teresa Barger’s Cartica Management
10. DLocal Limited (NASDAQ:DLO.A)
Cartica Management’s Stake Value: $13,952,000
Percentage of Cartica Management’s 13F Portfolio: 5.41%
Number of Hedge Fund Holders: 17
DLocal Limited (NASDAQ:DLO.A) operates a payments platform in the United States, Europe, China, and other countries. The company’s software transforms more than 700 local payment options in emerging economies worldwide into dollars or euros.
On September 26, SMBC Nikko analyst Andrew Bauch lowered his price objective on DLocal Limited (NASDAQ:DLO.A) from $28 to $22 and downgraded the stock from ‘Neutral’ to ‘Underperform.’ Though the analyst believed DLocal Limited (NASDAQ:DLO.A) was still well-positioned to beat its rivals through the end of 2022 and into 2023, he could not foresee a method to increase estimates during that time materially.
DLocal Limited (NASDAQ:DLO.A) has featured on Cartica Management’s portfolio since the fourth quarter of 2021. In the second quarter of 2022, the hedge fund owned 531,500 shares in DLocal Limited (NASDAQ:DLO.A), worth over $13.95 million.
According to our database, the long hedge fund positions in DLocal Limited (NASDAQ:DLO.A) decreased at the end of the second quarter of 2022. 17 hedge funds were bullish on DLocal Limited (NASDAQ:DLO.A), compared to 19 funds in the previous quarter.
In addition to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), MercadoLibre, Inc. (NASDAQ:MELI), and Alibaba Group Holding Limited (NYSE:BABA), DLocal Limited (NASDAQ:DLO.A) is one of the stocks that Teresa Barger’s Cartica Management is monitoring. DLocal Limited (NASDAQ:DLO.A) stands tenth on the list of 10 stocks to buy according to Teresa Barger’s Cartica Management.
Here is what Baron Funds has to say about DLocal Limited (NASDAQ:DLO) in its Q2 2022 investor letter:
“During the quarter, we re-initiated a position in DLocal Limited (NASDAQ:DLO), as part of our fintech disruption theme. DLocal is a Uruguay-based financial technology company that facilitates cross-border and local-to-local e-commerce payments in emerging markets for global enterprise merchants. The company’s proprietary technology platform enables global merchants to connect seamlessly with millions of consumers across various geographies through a single API…. (Click here to read the full text).”
9. Despegar.com, Corp. (NYSE:DESP)
Cartica Management’s Stake Value: $15,329,000
Percentage of Cartica Management’s 13F Portfolio: 5.94%
Number of Hedge Fund Holders: 18
Despegar.com, Corp. (NYSE:DESP) is a Latin American internet travel firm. Despegar, which operates in 20 countries, offers more than 17 million clients a wide range of travel items, including airline tickets, vacation packages, hotel reservations, and other travel-related services.
On August 26, Citi analyst Joao Pedro Soares initiated coverage of Despegar.com, Corp. (NYSE:DESP), assigning a Buy rating to the stock with a $12 price target, down from $15. As local passenger loads were lower than they were in 2019, the expert said there were chances for international travel to resume in Brazil.
Based on its 13F holdings for the second quarter of 2022, Cartica Management owned 1.89 million shares of Despegar.com, Corp. (NYSE:DESP), valued at $15.33 million. Ancient Art (Teton Capital) is the biggest stakeholder of Despegar.com, Corp. (NYSE:DESP), with 3.63 million shares worth $29.41 million.
As of the end of the second quarter, 18 hedge funds in Insider Monkey’s database of 895 funds held stakes in Despegar.com, Corp. (NYSE:DESP). These stakes have a consolidated value of $112.28 million.
8. Cartica Acquisition Corp (NASDAQ:CITE)
Cartica Management’s Stake Value: $19,899,000
Percentage of Cartica Management’s 13F Portfolio: 7.72%
Number of Hedge Fund Holders: N/A
Cartica Acquisition Corp (NASDAQ:CITE) is a SPAC which currently does not have substantial operations. The company’s primary goal is to combine one or more firms through a merger, share exchange, asset acquisition, share purchase, reorganization, or a similar combination. In addition, it plans to locate and conclude a corporate merger in India’s technology industry.
The hedge fund managed by Teresa Barger owned 1.98 million shares in Cartica Acquisition Corp (NASDAQ:CITE), worth over $19.90 million, representing 7.72% of its Q2 portfolio. Cartica Management is the leading shareholder of Cartica Acquisition Corp (NASDAQ:CITE). Next on the list is Saba Capital, which owns 1.98 million shares of Cartica Acquisition Corp (NASDAQ:CITE), worth over $19.85 million.
7. Fabrinet (NYSE:FN)
Cartica Management’s Stake Value: $20,458,000
Percentage of Cartica Management’s 13F Portfolio: 7.94%
Number of Hedge Fund Holders: 19
Fabrinet (NYSE:FN) provides precision optical, electro-mechanical, and electronic manufacturing services throughout North America, the Asia-Pacific, and Europe. The hedge fund chaired by Teresa Barger held 252,254 shares in Fabrinet (NYSE:FN), worth over $20.46 million in Q2 2022. It is the seventh-largest holding of Cartica Management.
DZS Inc. (NASDAQ:DZSI), a tech company located in Plano, established a collaboration with Fabrinet (NYSE:FN) on October 6. DZS will be able to concentrate on innovation across its access and optical edge technologies as well as cloud software solutions because of the partnership. Following the collaboration news, Northland analyst Tim Savageaux increased his price target on Fabrinet (NYSE:FN) to $132.50 from $125 and reiterated an ‘Outperform’ rating on the shares.
Fabrinet (NYSE:FN) was in 19 hedge fund portfolios at the end of the second quarter of 2022. There were 21 hedge funds in our database with Fabrinet (NYSE:FN) holdings at the end of the previous quarter.
Here is what FPA Queens Road has to say about Fabrinet (NYSE:FN) in its Q4 2021 investor letter:
“Fabrinet, a manufacturer of optical communications sensors and equipment, announced better-thanexpected results on increased demand for its telecom and datacom products, despite continuing supply chain disruptions. While supply chain issues had a significant impact on the company’s automotive business, it was less than expected (automotive is a small but growing market for the company). We are impressed by the company’s execution and held a 3.4% position at quarter end.”
6. Sea Limited (NYSE:SE)
Cartica Management’s Stake Value: $20,731,000
Percentage of Cartica Management’s 13F Portfolio: 8.04%
Number of Hedge Fund Holders: 65
Sea Limited (NYSE:SE) operates in Southeast Asia, Latin America, and the rest of Asia, engaged in e-commerce, digital entertainment, and digital financial services. On August 18, Jiong Shao, an analyst at Barclays, cut his price objective on Sea Limited (NYSE:SE) from $125 to $114 while maintaining an ‘Overweight’ rating on the stock. The analyst claimed that given how uncertain several macroeconomic factors such as inflation and currency had grown, management’s decision to revoke Shopee’s fiscal 2022 revenue prediction was “reasonable.”
Hedge fund sentiment reduced for Sea Limited (NYSE:SE) recently. At the close of Q2 2022, Insider Monkey found 65 hedge funds that were long Sea Limited (NYSE:SE), down from 77 funds in the previous quarter. Tiger Global Management is the leading shareholder of Sea Limited (NYSE:SE), with a position worth over $548.08 million.
Along with Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), MercadoLibre, Inc. (NASDAQ:MELI), and Alibaba Group Holding Limited (NYSE:BABA), Sea Limited (NYSE:SE) is one of the stocks on the radar of Teresa Barger’s Cartica Management. Cartica Management bought an additional 70,000 shares of Sea Limited (NYSE:SE) in the second quarter of 2022, increasing its stake by about 30%. At the end of the June quarter, the hedge fund held 310,071 shares of Sea Limited (NYSE:SE), worth about $20.73 million, representing 8.04% of its portfolio.
Here is what Baron Funds had to say about Sea Limited (NYSE:SE) in its Q1 2022 investor letter:
“Sea Limited, a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long- term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”
5. Huazhu Group Limited (NASDAQ:HTHT)
Cartica Management’s Stake Value: $21,202,000
Percentage of Cartica Management’s 13F Portfolio: 8.22%
Number of Hedge Fund Holders: 30
H World Group Limited (NASDAQ:HTHT), originally Huazhu Group Limited (NASDAQ:HTHT), is an investment holding firm in China. The company primarily operates in the German market and the local Chinese market. The company runs multi-brand hotels, serving all market sectors with a portfolio of more than 20 unique hotel brands.
Huazhu Group Limited (NASDAQ:HTHT) was downgraded to ‘Outperform’ from ‘Buy’ on August 30 by Daiwa analyst Carlton Lai, who raised the price objective to HK$34 from HK$32. Even though adjusted EBITDA came in over his Q2 prediction, Lai downgraded the stock due to reduced potential, given the firm’s high valuation and the unpredictability of China’s hotel demand.
Huazhu Group Limited (NASDAQ:HTHT) recently saw increased hedge fund sentiment. Huazhu Group Limited (NASDAQ:HTHT) was found in 30 hedge fund portfolios at the end of the second quarter of 2022. There were 27 hedge funds in our database with Huazhu holdings at the end of the previous quarter. Huazhu Group Limited (NASDAQ:HTHT) accounted for about 8.22% of Cartica Management’s portfolio, as the hedge fund owned a $21.20 million stake in the company.
4. Globant S.A. (NYSE:GLOB)
Cartica Management’s Stake Value: $22,492,000
Percentage of Cartica Management’s 13F Portfolio: 8.72%
Number of Hedge Fund Holders: 18
Globant S.A. (NYSE:GLOB) is a company that provides information technology services. Ken Fisher’s Fisher Asset Management is Globant S.A. (NYSE:GLOB)’s most significant stakeholder as of Q2 2022, with 931,600 shares worth $162.10 million.
Thomas Blakey, an analyst at KeyBanc, initiated coverage of Globant S.A. (NYSE:GLOB) on September 12, assigning an ‘Overweight’ rating to the stock with a $291 price target. There were 18 hedge funds in our database that held stakes in Globant S.A. (NYSE:GLOB) at the end of the second quarter of 2022, compared to 31 funds in the first quarter of 2022.
Cartica Management started building its position in Globant S.A. (NYSE:GLOB) in the first quarter of 2021. In the second quarter of 2022, it owned 129,262 shares of the company, valued at $22.49 million. The company represented 8.72% of the hedge fund’s 13F portfolio.
Polen Capital mentioned Globant S.A. (NYSE:GLOB) in its Q2 2022 investor letter. Here is what the firm said:
“Globant S.A. (NYSE:GLOB) is a leading IT consulting company based in Argentina. In particular, Globant’s expertise comes in helping companies digitally transform utilizing artificial intelligence, AR/VR, and blockchain. It has leveraged this expertise, and success with notable clients like Google and Disney, into faster than market growth. In the current environment, where businesses everywhere need help digitally transforming, Globant is seeing very strong demand for its services. The stock price reaction this quarter was related to broad market weakness on concerns around a slowdown in IT spend amidst global recession. In our view, while there’s always the possibility of a moderation in demand in the short term, the secular tailwinds from digital transformation make it likely that strong demand should persist for years to come, supporting strong earnings growth over the long term.”
3. XP Inc. (NASDAQ:XP)
Cartica Management’s Stake Value: $24,438,000
Percentage of Cartica Management’s 13F Portfolio: 9.48%
Number of Hedge Fund Holders: 21
XP Inc. (NASDAQ:XP) is a Brazilian investment management firm. XP Inc. declared its intention to alter the Latin American market for local investors on October 10 by enhancing access and transparency to cutting-edge investment vehicles with a global scope. In the second quarter of 2022, Cartica Management owned 1.36 million shares of XP Inc. (NASDAQ:XP), worth $24.44 million. This represented 9.48% of the investment portfolio of the hedge fund.
On August 11, Domingos Falavina, a JPMorgan analyst, downgraded XP Inc. (NASDAQ:XP) from ‘Overweight’ to ‘Neutral’ with a $23 price target, citing the company’s limited room for high growth given its market share has already reached about 12%, significant margin compression, and lack of any short- or long-term plans to return capital to shareholders.
Among the hedge funds tracked by Insider Monkey, 21 funds were long XP Inc. (NASDAQ:XP) in the second quarter of 2022, down from 31 funds in the previous quarter. Fabiana Gelband Leite’s Atmos Capital is the biggest shareholder of XP Inc. (NASDAQ:XP), with 6.64 million shares worth $119.29 million.
Harding Loevner mentioned XP Inc. (NASDAQ:XP) in its Q4 2021 investor letter. Here is what the firm said:
“Shares of another new Brazilian holding, XP, the country’s premier online investment platform, also sold off as tough economic conditions outweighed management’s optimism about prospective growth from new business lines in pensions, credit cards, and loans. Performance was helped by stock selection and our underweight in China.”
2. MercadoLibre, Inc. (NASDAQ:MELI)
Cartica Management’s Stake Value: $27,756,000
Percentage of Cartica Management’s 13F Portfolio: 10.77%
Number of Hedge Fund Holders: 68
MercadoLibre, Inc. (NASDAQ:MELI) is a Latin American e-commerce and financial company. The firm operates MercadoPago – a financial platform, Mercado Envios – a service that allows sellers to send their purchases throughout Latin America, and Mercado Shops – which enables merchants to create online stores. Generation Investment Management, managed by David Blood and Al Gore, is MercadoLibre, Inc. (NASDAQ:MELI)’s largest shareholder, with shares worth $328.40 million.
On October 6, Jefferies analyst John Colantuoni maintained a ‘Hold’ rating on MercadoLibre, Inc. (NASDAQ:MELI) while lowering his price objective from $990 to $970. The analyst decreased US internet predictions and price goals in expectation of a subdued macro environment.
Cartica Management began building its stake in the company in the fourth quarter of 2020. In the second quarter of 2022, it held 43,582 shares of MercadoLibre, Inc. (NASDAQ:MELI). These were worth $27.76 million and accounted for 10.77% of its portfolio. MercadoLibre, Inc. (NASDAQ:MELI) is the second-largest holding of Teresa Barger’s Cartica Management.
According to Insider Monkey’s Q2 data, 68 hedge funds were bullish on MercadoLibre, Inc. (NASDAQ:MELI), with combined stakes of $2.01 billion, compared to 63 funds in the earlier quarter, holding stakes in the company valued at $3.17 billion.
In its Q2 2022 investor letter Polen Capital, an investment management firm, mentioned MercadoLibre, Inc. (NASDAQ:MELI). Here is what the fund said:
“As written in our Q4 2021 commentary, some significant differences exist between the underlying profitability of ecommerce companies in emerging markets. However, MercadoLibre was punished during the quarter in part because of the sector it happens to operate in. Given its robust cash flow generation, we believe MercadoLibre is well-poised to continue delivering solid cash flows that will enable it to support its operations fully. Going forward, we expect the business to continue growing and providing value-added services to its customers across the continent. In turn, we capitalized on the weakness during the quarter to opportunistically increase our position in MercadoLibre.”
1. Alibaba Group Holding Limited (NYSE:BABA)
Cartica Management’s Stake Value: $28,295,000
Percentage of Cartica Management’s 13F Portfolio: 10.98%
Number of Hedge Fund Holders: 106
A worldwide technology firm headquartered in Hangzhou, China, Alibaba Group Holding Limited (NYSE:BABA) is the largest stock holding of Cartica Management, accounting for 10.98% of the overall portfolio. On October 3, Jiong Shao, an analyst at Barclays, decreased his price objective on Alibaba Group Holding Limited (NYSE:BABA) from $161 to $135 while maintaining an ‘Overweight’ rating on the stock. The analyst justified the goal reduction by pointing to recent currency depreciation in China.
Ken Fisher’s Fisher Asset Management held a substantial stake in Alibaba Group Holding Limited (NYSE:BABA) at the end of the second quarter of 2022, amounting to $1.65 billion. In addition, Insider Monkey spotted 106 hedge funds that were long Alibaba Group Holding Limited (NYSE:BABA) at the end of Q2 2022. The collective stakes of these hedge funds totaled $7.43 billion, compared to $5.70 billion a quarter ago with 100 positions.
Distillate Capital Partners LLC mentioned Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2022 investor letter. Here is what the fund said:
“Changes & Regional Weights: The largest new position is Alibaba Group Holding Limited (NYSE:BABA), which underperformed considerably and has seen its enterprise value fall by almost two thirds from its peak despite a net cash position on its balance sheet.”
You can also take a peek at 10 Stocks to Buy According to Richard Scott Greeder’s Broad Bay Capital and 10 Stocks to Buy According to Bulldog Investors.
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Disclosure: None. 10 Stocks to Buy According to Teresa Barger’s Cartica Management is originally published on Insider Monkey.
