In this article, we will discuss the 5 stocks to invest in according to Sean Murphy’s Game Creek Capital. If you want to see our detailed analysis of Murphy’s history, investment philosophy, and hedge fund performance, go directly to the 10 Stocks To Invest In According To Game Creek Capital.
5. Salesforce.com, Inc. (NYSE:CRM)
Game Creek Capital’s Stake Value: $6 million
Percentage of Game Creek Capital’s 13F Portfolio: 3.05%
Number of Hedge Fund Holders: 108
Of the 873 elite funds tracked by Insider Monkey, 108 were long in Salesforce.com, Inc. (NYSE:CRM) at the end of June, up from 91 in the first quarter of 2021. Sean Murphy of Game Creek Capital holds 24,875 shares of Salesforce.com, Inc. (NYSE:CRM). These shares are valued at $6 million and make up 3.05% of his fund’s portfolio.
In its Q2 2021 investor letter RV Capital Management explains why it began its investment in Salesforce.com, Inc. (NYSE:CRM). Here is what the fund said:
“Part 5: A New Investment in Salesforce.com
The assertion that mega caps can also be mispriced is a good segue to our second new investment in Salesforce.com. Salesforce is one of the largest software companies in the world with a market value of around US$ 250 bn. It is best known for its customer relationship management or “CRM” solution, known as its Sales Cloud. It has three additional clouds (“Service,” “Marketing” and “Commerce”) as well as a thriving platform business with both owned and 3rd party software solutions.
I first came across Salesforce in 2013. I was invested in Bechtle, a German company that provides companies with their in-house IT. I kept hearing about a strange new concept called “the Cloud” and wanted to get up to speed on the topic in case it was a risk to Bechtle. As a result, I picked up a copy of “Behind the Cloud”. It documents how Salesforce.com pioneered cloud-based software and revolutionised the software industry.
Since then, I have followed Salesforce from a distance and visited it several times in San Francisco. I did not consider it seriously as an investment though as for much of the period, I had not yet overcome my aversion to loss-making companies.
This changed in December last year when Salesforce announced the acquisition of Slack (a former investment of the Business Owner Fund, described in my 2020 half-year letter) for US$ 27 bn. On the date of announcement, Salesforce’s market value fell by around US$ 20 bn. Effectively, the market was saying that Slack was almost worthless, which, as an enthusiastic owner of Slack, I disagreed with. Initially, I decided to keep our Slack stock and roll it into Salesforce (as part of the consideration was in Salesforce’s own stock). As Salesforce’s price fell further in the subsequent months, I bought its stock directly to make it a full-size position post the closing of the Slack acquisition…” (Click here to see the full text)
