In this piece, we will take a look at the 5 tech stocks to buy according to Daryl Smith’s Kayak Investment Partners. If you want a detailed look at the firm and its manager, head over to 10 Tech Stocks To Buy According to Daryl Smith’s Kayak Investment Partners.
5. Meta Platforms, Inc. (NASDAQ:FB)
Value of Kayak Investment’s Stake: $48 million
Percentage of Kayak Investment’s 13F Portfolio: 6.83%
Number of Hedge Fund Holders: 266
Meta Platforms, Inc. (NASDAQ:FB) is the largest social media conglomerate in the world, as it owns three distinctive brands under its portfolio. These brands enable their user base to share details of their lives with each other and stay connected through the Internet.
Meta Platforms, Inc. (NASDAQ:FB) earned $29 billion in revenue and $3.22 in GAAP EPS during its third quarter, beating analyst estimates for the EPS. Rosenblatt upgraded the company’s shares to Buy and kept the price target unchanged at $400, sharing cautious optimism about capital expenditure in an October 2021 analyst note.
Meta Platforms, Inc. (NASDAQ:FB)’s largest shareholder is Alexander Becker’s Codex Capital who owns 27,950 shares worth $9.6 billion.
Mr. Smith’s Kayak Investment owned 142,459 Meta Platforms, Inc. (NASDAQ:FB) shares worth $48 million and 6.83% of his total portfolio value by the end of the third quarter. During the second quarter, 266 of the 873 hedge funds polled by Insider Monkey held stakes in the company.
In its third quarter investor letter, Wedgewood Partners had the following to say about Meta Platforms, Inc. (NASDAQ:FB):
“Facebook detracted from performance despite posting a staggering +56% growth in advertising revenues. Much of the stock’s underperformance was driven by nonoperating concerns that we view as mostly political in nature. The Company’s digital properties command a massive audience of over 2.7 billion daily users, so any government or state actor would be able to wield tremendous power by controlling that audience and it should not be a surprise when those actors attempt to do that. However, Facebook has invested aggressively in its content curation capabilities that address many of the concerns raised by media and political critics. We continue to carry Facebook at our maximum weighting as the stock is trading in line with a market multiple despite unrivaled competitive positioning and rapid growth, representing one of the best risk-rewards available in the market.”
4. salesforce.com, inc. (NYSE:CRM)
Value of Kayak Investment’s Stake: $48.9 million
Percentage of Kayak Investment’s 13F Portfolio: 6.91%
Number of Hedge Fund Holders: 108
salesforce.com, inc. (NYSE:CRM) is an American enterprise cloud computing provider that focuses its services on customer relationship management. Its cloud software allows customers to generate analytics for insight and fulfill various business functions such as delivering quotas and contracts.
In an investor note issued in November 2021, Morgan Stanley raised its price target to $360 per share, expressing optimism salesforce.com, inc. (NYSE:CRM)’s total addressable market. During its second fiscal quarter, the company reported $6.3 billion in revenue and $1.48 in non-GAAP EPS, beating analyst estimates on both.
salesforce.com, inc. (NYSE:CRM)’s largest investor by the third quarter was Alexander Becker’s Codex Capital who owned 32,650 shares worth $8 billion.
During the third quarter, Mr. Smith’s Kayak Investment Partners held 180,317 salesforce.com, inc. (NYSE:CRM) shares worth $48.9 million and representing 6.91% of his firm’s overall portfolio. At the same time, 108 out of the 873 hedge funds polled by Insider Monkey had held a stake in the company by the end of the second quarter.
In its third-quarter 2021 investor letter published earlier this year, investment firm Polen Capital had the following to say about salesforce.com, inc. (NYSE:CRM):
“Salesforce came under pressure earlier in the year after agreeing to purchase Slack for about $26 billion. Since then, management has articulated well the strategic rationale and integration of Slack into its other software offerings and has demonstrated continued double-digit organic revenue growth within its legacy product offerings. At its recent investor day, the company also outlined long-term growth plans in line with our estimates but probably above what others may have been expecting, especially on margin expansion.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Value of Kayak Investment’s Stake: $49.6 million
Percentage of Kayak Investment’s 13F Portfolio: 7%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is one of the world’s largest online retailers and is based out of the United States. It is known for its founder Mr. Jeffery P. Bezos, who is also one of the world’s richest men, and for targeting emerging markets such as data center computing in addition to its retail platform.
Kayak Investment owns 15,120 Amazon.com, Inc. (NASDAQ:AMZN) shares that represent 7% of its portfolio and are worth $49.6 million as of the end of this year’s third quarter. Furthermore, 271 out of the 873 hedge funds polled by Insider Monkey at the end of the second quarter of this year held a stake in the company.
Amazon.com, Inc. (NASDAQ:AMZN)’s price target was lowered to $4,200 by Credit Suisse in October 2021 due to tighter margins. The company missed both revenue and GAAP EPS analyst estimates during its third quarter, by posting $110 billion in revenue and $6.12 in earnings per share.
Amazon.com, Inc. (NASDAQ:AMZN) largest shareholder is Alexander Becker’s Codex Capital who owns 2,850 shares worth $9.8 billion.
In its third-quarter 2021 investor letter, Madison Funds had the following to say about Amazon.com, Inc. (NASDAQ:AMZN):
“We did add a modest new position weight to the portfolio in the quarter in Amazon.com, Inc. stock (AMZN). We acknowledge that many aspects of Amazon’s merit as an investment are well appreciated. However, our work leads us to conclude that shares are attractive. Leadership positions in both e-commerce and cloud computing provide the company with significant durable competitive advantages in industries that we think can produce above average growth over the next decade. Over the past year, AMZN shares have trailed the market as investors debate near-term growth prospects following the pandemic-induced e-commerce demand. Additionally, margins have been depressed due to Amazon’s unprecedented increases in spending to build out fulfillment and in-house logistics capabilities – Amazon will build out more square footage this year and last than it did cumulatively over the previous 10 years, more than doubling its in-house delivery capacity. We like the investments Amazon is making and believe they will further advantage the company relative to other retailers, making it nearly impossible for competitors to match the same level of delivery speed and convenience. With its large and frequently engaged customer base, Amazon has multiple mechanisms to make money, including selling advertising and enhanced subscription services. Within the cloud business, we forecast Amazon Web Services (AWS) leveraging its strengths in Infrastructure-as-a-service (IaaS) to move into higher value segments of cloud computing (such as platform-as-a-service: PaaS), allowing the company to continue outgrowing the overall IT sector with strong profitability. While Amazon shares have performed extremely well over the long-term, we think near-term concerns about whether Amazon will earn a return on its accelerated investments provide an opportunity now for investors willing to look through the investment period. Our view is that the investments likely earn strong returns and extend Amazon’s competitive advantages and above average growth.”
2. Roblox Corporation (NYSE:RBLX)
Value of Kayak Investment’s Stake: $51.4 million
Percentage of Kayak Investment’s 13F Portfolio: 7.27%
Number of Hedge Fund Holders: 49
Roblox Corporation (NYSE:RBLX) provides a 3D virtual environment for entertainment and interaction. It is an American company headquartered in San Mateo, California after being incorporated in 2004.
Roblox Corporation (NYSE:RBLX) reported $509 million in revenue and -$0.13 in GAAP EPS, beating analyst estimates for EPS during its third quarter earnings. Mr. Smith’s Kayak Investment held 680,788 shares of Roblox Corporation (NYSE:RBLX) during the third quarter of this year, in a stake worth $51.4 million and 7.27% of its portfolio.
Truist reduced the company’s share price target to $92 in October 2021 due to new gaming curbs in China, and 49 of the 873 hedge funds polled by Insider Monkey had holdings in Roblox Corporation (NYSE:RBLX) by the end of the second quarter 2021.
Roblox Corporation (NYSE:RBLX)’s largest shareholder is Chase Coleman and Feroz Dewan’s Tiger Global Management LLC who owns $2.4 billion of equity through 27 million shares.
In its third quarter 2021 investor letter, investment management firm Tao Value had the following to say about Roblox Corporation (NYSE:RBLX):
“Roblox is a new position of “Mindful Compounder” category and is a new breed of business that is hard to define at this point. It started with gaming but has the potential to evolve to a new being for human society. Roblox management calls it “human co-experience” and many practitioners call it “metaverse”.
Tao
The company made many “drastic and rational” decisions which shows deep mindfulness – an important trait I look for. The first thing caught my attention is management’s attitude towards security, privacy & trust. Different than Facebook, Roblox took trust and security seriously very early on. So serious that they actually report “Infrastructure and Trust & Safety“ as an accounting item in its operating expense breakdown, indicating that they see the trust & safety is an integral part of the infrastructure of the virtual world. Roblox didn’t just say it, but also did so. For example, Roblox doesn’t have voice chat functionality, which is a key engagement feature and is almost a standard setup for almost all gaming platforms. Yet it is also a feature that is very hard to moderate in real time with old day technologies and can be abused heavily. Roblox made a conscious decision to put security/trust before product stickiness and deferred the audio chat until recently (Roblox recently rolled out an alpha test moderated by AI-based technologies).
Roblox, as any other large social platforms (which becomes the human society itself), will unavoidably have the dark side of the humanity. One Wired article revealed the story about “How ‘Roblox’ Became a Playground for Virtual Fascists”. Yet it is how the platform sees and treats the problem matters. In Roblox’ case, it seems to me that they have a very strong stand on their responsibility (to be the trustee of its users). According to this article, a Roblox spokesperson said the company reviews “every single image, audio file, and video before it is uploaded.” Accordingly, Roblox disclosed that it has 3600 people (albeit outsourced) working on trust and safety, compared to only 1200 full time employees…”
1. Smartsheet Inc. (NYSE:SMAR)
Value of Kayak Investment’s Stake: $51.6 million
Percentage of Kayak Investment’s 13F Portfolio: 7.29%
Number of Hedge Fund Holders: 49
Smartsheet Inc. (NYSE:SMAR) is a provider of cloud based software for workflow management, to let its customers manage their employee activities and conduct planning and coordination through a software platform. It is headquartered in Bellevue, Washington and was founded in 2005.
Kayak Investment held 750,119 shares of Smartsheet Inc. (NYSE:SMAR) by the end of the third quarter. These were worth $51.6 million and represented 7.29% of its portfolio. During the prior quarter, 49 out of the 873 hedge funds surveyed by Insider Monkey held a stake in the company.
Smartsheet Inc. (NYSE:SMAR) earned $131 million in revenue and -$0.05 in non-GAAP EPS, beating analyst estimates on both counts in its second quarter. BMO Capital raised the company’s price target to $90 in a September 2021 analyst note citing faith in its total addressable market and the emergence of remote working trends.
Smartsheet Inc. (NYSE:SMAR)’s largest investor is Panayotis Takis Sparaggis’s Alkeon Capital Management who owns 3.3 million shares worth $238 million.
Disclosure: None. You can also take a peek at the Top 10 Energy Sector Stocks for 2021 and 15 Fastest-Growing Fintech Companies.
