In this article, we discuss the 9 tech and software stocks to buy according to Hamilton Helmer’s Strategy Capital.
Hamilton Helmer has spent his career as a practicing business strategist. At Helmer & Associates (later Deep Strategy), a strategy consulting firm he founded, he led over 200 strategy projects. Prior to Helmer & Associates, he was employed at Bain & Company. Over the last two decades, Hamilton Helmer has utilized his Strategy concepts as an active equity investor which led to him co-founding Strategy Capital. Mr. Helmer is the chief investment officer and managing partner of California-based Strategy Capital. He holds a Ph.D. in Economics from Yale University and is a Phi Beta Kappa graduate of Williams College. Mr. Helmer’s book 7 Powers was selected by Bloomberg as one of The Best Books of 2017. Mr. Helmer taught Business Strategy in the Economics Department of Stanford University for a decade.
Growth Catalysts for Tech and Software Industry
According to a report by Forrester, software will be the star performer in the 2021–2022 US tech market outlook. Software purchases will see the fastest growth, of almost 10% in 2021 and just over 11% in 2022. However, SaaS subscription revenue growth will slow in 2021 and even more in 2022 as a result of the growing popularity of single-instance cloud. Companies that want cloud solutions for their core systems are typically doing so as a single instance, causing this deployment model to grow at accelerating rates in 2021 and 2022. Forrester forecasts that the US tech budgets will expand by 7.4% in 2021 and 6.7% in 2022, raising the old predictions of the US tech budget to grow by 6% in 2021 and 6.8% in 2022.
Mr. Helmer manages over $976 million in assets through his hedge fund, Strategy Capital. Mr. Helmer made an addition to his portfolio in the second quarter of 2021 after the purchase of 510,107 shares of Cloudflare, Inc. (NYSE: NET). He also made additional purchases in the 8 stocks he owned previously. However, Helmer bought relatively more shares of Facebook, Inc. (NASDAQ: FB), Netflix, Inc. (NASDAQ: NFLX), and Amazon.com, Inc. (NASDAQ: AMZN).
Other stocks among the top 5 of the investment portfolio of Strategy Capital by the end of the second quarter of 2021 were Shopify Inc. (NYSE: SHOP), Atlassian Corporation Plc (NYSE: TEAM), and Pinterest, Inc. (NYSE: PINS).
Photo by Ant Rozetsky on Unsplash
Why should we pay attention to Helmer’s stock picks? 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 124 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 124 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.
Our Methodology
With this context in mind, here is our list of the 9 tech and software stocks to buy according to Hamilton Helmer’s Strategy Capital. These were ranked according to the investment portfolio of Strategy Capital at the end of the second quarter of 2021. The analyst ratings of each company are also discussed to provide readers with some more context for their investment decisions.
Tech and Software Stocks to Buy According to Hamilton Helmer’s Strategy Capital
9. Zoom Video Communications, Inc. (NASDAQ:ZM)
Helmer’s Stake Value: $35,564,000
Percentage of Hamilton Helmer’s 13F Portfolio: 3.64%
Number of Hedge Fund Holders: 59
Zoom Video Communications, Inc. (NASDAQ: ZM) provides a video-first communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings which provides us with HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems. Zoom Video Communications, Inc. (NASDAQ: ZM) was incorporated in 2011 and is headquartered in San Jose, California.
This September Citi analyst Tyler Radke reported the firm’s price target on Zoom Video Communications, Inc. (NASDAQ: ZM) at $304 and reiterated a Neutral rating on the shares.
Zoom Video Communications, Inc. (NASDAQ: ZM) is ranked ninth on our list of 9 tech and software stocks to buy according to Hamilton Helmer’s Strategy Capital. According to the latest filings, Strategy Capital owned 91,889 shares in the firm at the end of June 2021 worth $36 million, representing 3.64% of the portfolio.
As of the fiscal second quarter of 2022, Zoom Video Communications, Inc. (NASDAQ: ZM) reported EPS of $1.36, beating estimates by $0.20. Total revenue grew 54% year over year to $1.02 billion beating estimates by $31.23 million.
By the end of the second quarter of 2021, 59 hedge funds out of the 873 tracked by Insider Monkey held stakes in Zoom Video Communications, Inc. (NASDAQ: ZM) worth about $8.48 billion. This is compared to 54 hedge funds in the previous quarter with a total stake value of approximately $5.67 billion.
Artisan Partners, in their first-quarter 2021 investor letter, mentioned Zoom Video Communications, Inc. (NASDAQ: ZM), and shared their insights on the company. Here’s what they said:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
8. Datadog, Inc. (NASDAQ:DDOG)
Helmer’s Stake Value: $37,082,000
Percentage of Hamilton Helmer’s 13F Portfolio: 3.79%
Number of Hedge Fund Holders: 56
Datadog, Inc. (NASDAQ: DDOG) provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally. The company’s SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, and security monitoring to provide real-time observability of customers’ technology stack. Datadog, Inc. (NASDAQ: DDOG) was incorporated in 2010 and is headquartered in New York, New York.
In August 2021, Morgan Stanley analyst Sanjit Singh raised the firm’s price target on Datadog, Inc. (NASDAQ: DDOG) from $120 to $150. The analyst also reiterated an Overweight rating on the shares of Datadog, Inc. (NASDAQ: DDOG).
Datadog, Inc. (NASDAQ: DDOG) is ranked eighth on our list of 9 tech and software stocks to buy according to Hamilton Helmer’s Strategy Capital. According to the latest filings, Strategy Capital owns 356,293 shares in the firm as of June 30 2021 worth $37.1 million representing 3.79% of the portfolio.
In the second quarter of 2021, Datadog, Inc. (NASDAQ: DDOG) had an EPS of $0.09, beating estimates by $0.06. Datadog, Inc. (NASDAQ: DDOG) reported revenues of $233.5 million, up 66.81% year over year and beating estimates by $21.11 million. Datadog, Inc. (NASDAQ: DDOG) has gained 56.55% over the past 6 months and 50.33% year to date.
By the end of the second quarter of 2021, 56 hedge funds out of the 873 tracked by Insider Monkey held stakes in Datadog, Inc. (NASDAQ: DDOG) worth roughly $3.23 billion. This is compared to 44 hedge funds in the previous quarter with a total stake value of approximately $2.38 billion.
Artisan Partners, in their first-quarter 2021 investor letter, mentioned Datadog, Inc. (NASDAQ: DDOG), and shared their insights on the company. Here’s what they said:
“We also added to Datadog. Shares of Datadog retreated in Q1 in sympathy with the broader information technology sector. However, the company remains on solid fundamental footing, recently setting a quarterly record for net new customer additions. Datadog’s cloud solutions fill a void left by legacy tools built for on-premise IT infrastructures, enabling it to take share in an underpenetrated, large addressable market. We believe the company’s low-touch land-and-expand customer acquisition model, combined with a steady expanding product portfolio, position it well for strong profit and cash flow growth in the coming years.”
7. Cloudflare, Inc. (NYSE:NET)
Helmer’s Stake Value: $53,990,000
Percentage of Hamilton Helmer’s 13F Portfolio: 5.52%
Number of Hedge Fund Holders: 43
The newest addition to Strategy Capital’s investment portfolio, Cloudflare, Inc. (NYSE: NET) ranks seventh on our list of the 9 tech and software stocks to buy according to Hamilton Helmer’s Strategy Capital.
Cloudflare, Inc. (NYSE: NET) operates as a cloud platform that delivers a range of network services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combinations of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and Internet of Things (IoT) devices. Cloudflare, Inc. (NYSE: NET) also offers performance solutions, which include content delivery, intelligent routing, and mobile software development kit, as well as content, mobile, and image optimization solutions. The company serves customers in technology, healthcare, financial services, consumer and retail, and non-profit industries, as well as the government. Cloudflare, Inc. (NYSE: NET) was incorporated in 2009 and is headquartered in San Francisco, California.
In August 2021, RBC Capital analyst Matthew Hedberg raised the firm’s price target on Cloudflare, Inc. (NYSE: NET) from $100 to $130. On top of this, the analyst keeps an Outperform rating on the shares.
Based on the latest 13F filings, the Hamilton Helmer-led Strategy Capital purchased 510,107 shares of Cloudflare, Inc. (NYSE: NET) during the second quarter of 2021. These shares are worth $54 million which in turn represents 5.52% of Strategy Capital’s investment portfolio.
In the second quarter of 2021, Cloudflare, Inc. (NYSE: NET) had an EPS of -$0.02 beating the EPS estimate of -$0.04 by $0.02. During the same period, Cloudflare, Inc. (NYSE: NET) reported revenues amounting to $152.4 million, up 52.85% year over year and beating estimates by $6.33 million. The share price of Cloudflare, Inc. (NYSE: NET) has gained 68.20% over the past 6 months and 69.46% year to date.
By the end of the second quarter of 2021, 43 hedge funds out of the 873 tracked by Insider Monkey held stakes in Cloudflare, Inc. (NYSE: NET) worth roughly $862.5 million. This is compared to 45 hedge funds in the previous quarter with a total stake value of approximately $792.4 million.
Much like Shopify Inc. (NYSE: SHOP), Facebook, Inc. (NASDAQ: FB), Atlassian Corporation Plc (NYSE: TEAM), Pinterest, Inc. (NYSE: PINS), Amazon.com, Inc. (NASDAQ: AMZN), Netflix, Inc. (NASDAQ: NFLX), Zoom Video Communications, Inc. (NASDAQ: ZM), and Datadog, Inc. (NASDAQ: DDOG), Cloudflare, Inc. (NYSE: NET) is a stock worth investing in according to Hamilton Helmer.
Alger, an investment management firm, published its “Alger Mid Cap Focus Fund” second quarter 2021 investor letter. The fund mentioned Cloudflare, Inc. (NYSE: NET), and discussed its stance on the firm. Here’s what they said:
“Cloudflare provides a broad range of network services to businesses of all sizes across the world. Cloudflare’s intelligent global network spans more than 200 cities in over 100 countries. It offers network security, performance and reliability to a growing portion of global web traffic with over 17% of global internet requests going through Cloudflare. The company’s serverless network design allows this global network to be a key component layer as new developments for edge computing, 5G and the Internet of Things increase the importance of secure, reliable edge networks.
Cloudflare stock outperformed in the second quarter following a strong earnings report for the first three months of this year during which the company reaccelerated revenue growth. This revenue reacceleration was driven by momentum in Cloudflare’s large customer segment. Cloudflare added a record number of large customers who now account for more than half of Cloudflare’s total revenue. We think that Cloudflare is currently still in the early stages of market penetration, which means it has potential to maintain high levels of growth within its large customer segment as the company continues to innovate within its product offerings to better serve these large, complex customers. Cloudflare’s leadership in product innovation was further validated by the company’s second quarter announcement of a new partnership with NVIDIA Corporation to develop Al-based applications on Cloudflare’s edge network.”
6. Netflix, Inc. (NASDAQ:NFLX)
Helmer’s Stake Value: $92,103,000
Percentage of Hamilton Helmer’s 13F Portfolio: 9.42%
Number of Hedge Fund Holders: 113
Netflix, Inc. (NASDAQ: NFLX) provides entertainment services. It offers TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. Netflix, Inc. (NASDAQ: NFLX) also provides DVDs-by-mail membership services. The company has approximately 204 million paid members in 190 countries. Netflix, Inc. (NASDAQ: NFLX) was founded in 1997 and is headquartered in Los Gatos, California.
On September 8, 2021, JPMorgan analyst Doug Anmuth raised the firm’s price target on Netflix, Inc. (NASDAQ: NFLX) from $625 to $705 and reiterated an Overweight rating on its shares. The streaming service closed Tuesday up $16.18 to $606.71.
Based on the latest 13F filings, the Hamilton Helmer-led Strategy Capital holds 174,368 shares of Netflix, Inc. (NASDAQ: NFLX) as of the second quarter of 2021. These shares are worth $92.1 million which in turn represents 9.42% of Strategy Capital’s investment portfolio. Netflix, Inc. (NASDAQ: NFLX) ranks 6th on our list of the 9 tech and software stocks to buy according to Hamilton Helmer’s Strategy Capital.
In the second quarter of 2021, Netflix, Inc. (NASDAQ: NFLX) had an actual EPS of $2.97, missing estimates by -$0.19. Netflix, Inc. (NASDAQ: NFLX) reported revenues amounting to $7.34 billion, up 19.41% year over year, beating estimates by $17.14 million. The share price of Netflix, Inc. (NASDAQ: NFLX) saw a growth of 13.40% over the past 6 months and 12.83% year to date.
By the end of the second quarter of 2021, 113 hedge funds out of the 873 tracked by Insider Monkey held stakes in Netflix, Inc. (NASDAQ: NFLX) worth roughly $13.2 billion. This is compared to 110 hedge funds in the previous quarter with a total stake value of approximately $14.1 billion.
Similar to Shopify Inc. (NYSE: SHOP), Facebook, Inc. (NASDAQ: FB), Atlassian Corporation Plc (NYSE: TEAM), Pinterest, Inc. (NYSE: PINS), Amazon.com, Inc. (NASDAQ: AMZN), Zoom Video Communications, Inc. (NASDAQ: ZM), Datadog, Inc. (NASDAQ: DDOG), and Cloudflare, Inc. (NYSE: NET), Netflix, Inc. (NASDAQ: NFLX) is a stock worth investing in according to Hamilton Helmer.
Polen Capital, an investment management firm, published its “Polen Focus Growth” second quarter 2021 investor letter. The fund mentioned Netflix, Inc. (NASDAQ: NFLX) and discussed its stance on the firm. Here’s what they said:
“For Netflix, we believe the underlying businesses for the company remain strong. With Netflix, we anticipate content spending to moderate as subscriber growth continues, which we believe should result in attractive double-digit earnings and cashflow growth over the next five years and beyond.”
5. Amazon.com, Inc. (NASDAQ:AMZN)
Helmer’s Stake Value: $106,287,000
Percentage of Hamilton Helmer’s 13F Portfolio: 10.88%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ: AMZN) engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It sells merchandise and content purchased for resale from third-party sellers through physical and online stores. Amazon.com, Inc. (NASDAQ: AMZN) also offers programs that enable sellers to sell their products on its websites, as well as its stores. Moreover, the company provides compute, storage, database, analytics, machine learning, and other services, as well as fulfillment, advertising, publishing, and digital content subscriptions. Amazon.com, Inc. (NASDAQ: AMZN) also gave us Amazon Prime, a membership program, which provides free shipping of various items, access to streaming of movies and TV episodes, among other services. The company serves consumers, sellers, developers, enterprises, and content creators. Amazon.com, Inc. (NASDAQ: AMZN) was founded in 1994 and is headquartered in Seattle, Washington.
On July 26, 2021, Credit Suisse analyst Stephen Ju raised the firm’s price target on Amazon.com, Inc. (NASDAQ: AMZN) from $4,000 to $4,850 and reiterated an Outperform rating on the shares ahead of quarterly results. The analyst notes that Amazon nearly tripled dollars spent on e-commerce capacity additions from $3 billion in Q1 2019 to $12 billion in Q4 2020 and $10 billion in Q1 2021.
Based on the latest 13F filings, the Hamilton Helmer-led Strategy Capital holds $106.29 million worth of in shares of Amazon.com, Inc. (NASDAQ: AMZN) as of the second quarter of 2021. These shares represent 10.88% of Strategy Capital’s investment portfolio.
In the second quarter of 2021, Amazon.com, Inc. (NASDAQ: AMZN) had an actual EPS of $15.12, beating estimates by $2.83. Amazon.com, Inc. (NASDAQ: AMZN) reported revenues amounting to $113.08 billion, up 27.18% year over year, missing estimates by -$2.01 billion. Amazon.com, Inc. (NASDAQ: AMZN) gained 12.48% over the past 6 months and 8.78% year to date.
By the end of the second quarter of 2021, 271 hedge funds out of the 873 tracked by Insider Monkey held stakes in Amazon.com, Inc. (NASDAQ: AMZN) worth roughly $60.5 billion. This is compared to 243 hedge funds in the previous quarter with a total stake value of approximately $50.4 billion.
L1 Capital, an investment management firm, published its ‘L1 Capital International Fund’ second quarter 2021 investor letter. The fund mentioned Amazon.com, Inc. (NASDAQ: AMZN) and discussed its stance on the firm. Here’s what L1 Capital has to say:
“Amazon flipped from being the largest detractor from portfolio performance in the March 2021 quarter, to one of the leading contributors in the June 2021 quarter. We took advantage of negative near-term sentiment in the March 2021 quarter to add to our Amazon investment. We continue to view Amazon as one of the best positioned businesses globally, with its share price still not reflecting fair value.”
4. Pinterest, Inc. (NYSE:PINS)
Helmer’s Stake Value: $119,440,000
Percentage of Hamilton Helmer’s 13F Portfolio: 12.22%
Number of Hedge Fund Holders: 63
Pinterest, Inc. (NYSE: PINS) provides a visual discovery engine in the United States and internationally. The company’s engine allows people to find inspiration for their lives, including recipes, style, and home inspiration, DIY, among others. It shows them visual recommendations based on people’s personal tastes and interests. Pinterest, Inc. (NYSE: PINS) was founded in 2008 and is headquartered in San Francisco, California.
On July 30, Morgan Stanley analyst Brian Nowak reported the firm’s price target on Pinterest at $77 and reiterated an Overweight rating on the shares.
Based on the latest 13F filings, the Hamilton Helmer-led Strategy Capital holds 1,512,859 shares of Pinterest, Inc. (NYSE: PINS), worth 119,440,000 as of the second quarter of 2021. These shares represent 12.22% of Strategy Capital’s investment portfolio.
In the second quarter of 2021, Pinterest, Inc. (NYSE: PINS) had an actual EPS of $0.25, beating estimates by $0.12. Pinterest, Inc. (NYSE: PINS) reported revenues amounting to $613.21 million, up 125.04% year over year, beating estimates by $51.07 million.
By the end of the second quarter of 2021, 63 hedge funds out of the 873 tracked by Insider Monkey held stakes in Pinterest, Inc. (NYSE: PINS) worth roughly $2.9 billion. This is compared to 83 hedge funds in the previous quarter with a total stake value of approximately $4.18 billion.
Carillon Tower Advisers, an investment management firm, published its “Carillon Eagle Mid Cap Growth Fund” first quarter 2021 investor letter. Carillon Tower Advisers, mentioned Pinterest, Inc. (NYSE: PINS) in their investor letter and shared their insights on the company. Here’s what they had to say:
“Pinterest is an operator of a pinboard-style social media website that enables users to create theme-based image collections for events, hobbies, and other personal interests. The firm delivered another quarter of both earnings and forward guidance above investor expectations, sending shares higher. Strength was driven by notable user growth and a return of advertising spending. We remain excited about an increase in video content, new analytics tools for advertisers, and an increasing shift towards ecommerce.”
3. Atlassian Corporation Plc (NYSE:TEAM)
Helmer’s Stake Value: $130,776,000
Percentage of Hamilton Helmer’s 13F Portfolio: 13.38%
Number of Hedge Fund Holders: 64
Atlassian Corporation Plc (NYSE: TEAM) through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide. Its products include JIRA, a workflow management system for teams to plan, track, collaborate, and manage work, and projects; Jira Service Management, a service desk product for creating and managing service experiences for various service team providers, including IT, legal, and HR teams; Jira Align for enterprise agile planning; Opsgenie, an incident management tool that centralizes alerts and notifies right people at right time; and Statuspage for incident communication. The company also provides Confluence and Trello. Atlassian Corporation Plc (NYSE: TEAM) was founded in 2002 and is headquartered in Sydney, Australia.
On July 30, Canaccord analyst David Hynes raised the firm’s price target on Atlassian Corporation Plc (NYSE: TEAM) from $275 to $325 and kept a Buy rating on the shares.
Based on the latest 13F filings, the Hamilton Helmer-led Strategy Capital holds $131 million worth of shares in Atlassian Corporation Plc (NYSE: TEAM) as of the second quarter of 2021. These shares represent 13.38% of Strategy Capital’s investment portfolio.
As of the fiscal fourth quarter of 2021, Atlassian Corporation Plc (NYSE: TEAM) had an actual EPS of $0.24, beating estimates by $0.06. Atlassian Corporation Plc (NYSE: TEAM) also reported revenues amounting to $559.54 million, up 29.98% year over year, beating estimates by $34.23 million. Atlassian Corporation Plc (NYSE: TEAM) gained 58.41% over the past 6 months and 61.87% year to date.
By the end of the second quarter of 2021, 64 hedge funds out of the 873 tracked by Insider Monkey held stakes in Atlassian Corporation Plc (NYSE: TEAM) worth roughly $4.17 billion. This is compared to 67 hedge funds in the previous quarter with a total stake value of approximately $3.95 billion.
Tao Value, an investment management firm, published its second-quarter 2021 investor letter, in which they mentioned Atlassian Corporation Plc (NASDAQ: TEAM), and discussed its stance on the firm. Here’s what they had to say:
“Atlassian is in the middle of a multi-year migration from on-premise to cloud. In Feb 2021, Atlassian stopped new sales of server license and increased price as planned. It created “pull-forward” effects that incentivize users to renew early, leading to strong revenue & billings growth. It also introduced its newest innovative product called “Point A”, which enables product development teams to collaborate with customers to drive faster and more targeted solution building. Outside of the financial numbers, Atlassian is also empowering many small teams that use its free tier enterprise cloud solution, including our team. I remain confident that Atlassian has the potential to serve all kinds of team collaboration regardless of sector, implying strong growth in years to come.”
2. Facebook, Inc. (NASDAQ:FB)
Helmer’s Stake Value: $140,020,000
Percentage of Hamilton Helmer’s 13F Portfolio: 14.33%
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ: FB) develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. One of the company’s products is Facebook that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers. Next, we have Instagram, a community for sharing photos, videos, and private messages. The third product is Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices. You may be familiar with WhatsApp, a messaging application that is used by people and businesses to communicate confidentially, another product of Facebook, Inc. (NASDAQ: FB). It also provides Facebook Reality Labs, an augmented and virtual reality product that helps people feel connected, anytime, and anywhere. Facebook, Inc. (NASDAQ: FB) was founded in 2004 and is headquartered in Menlo Park, California.
On September 9, HSBC analyst Nicolas Cote-Colisson raised the firm’s price target on Facebook, Inc. (NASDAQ: FB) from $275 to $300 and kept a Reduce rating on the shares.
Based on the latest 13F filings, Strategy Capital holds $140 million worth of shares in Facebook, Inc. (NASDAQ: FB) as of the second quarter of 2021. These shares represent 14.33% of the fund’s investment portfolio.
In the second quarter of 2021, Facebook, Inc. (NASDAQ: FB) had an actual EPS of $3.61, beating estimates by $0.58. Facebook, Inc. (NASDAQ: FB) also reported revenues amounting to $29.08 billion, up 55.60% year over year, beating estimates by $1.19 billion. Moreover, Facebook, Inc. (NASDAQ: FB) gained 37.33% over the past 6 months and 39.78% year to date.
By the end of the second quarter of 2021, 266 hedge funds out of the 873 tracked by Insider Monkey held stakes in Facebook, Inc. (NASDAQ: FB) worth roughly $42.35 billion. This is compared to 257 hedge funds in the previous quarter with a total stake value of approximately $40.96 billion.
Polen Capital, an investment management firm, published its “Polen Focus Growth” second quarter 2021 investor letter in which it mentioned Facebook, Inc. (NASDAQ: FB) and discussed its stance on the firm. Here’s what they had to say:
“Facebook was the top contributor to our return for the second consecutive quarter. The company has over $1 trillion market capitalizations. Yet, based on first quarter 2021 results, FB is currently still growing revenue at over 30% organically! In fact, last quarter Facebook grew revenue 48% year over year. Facebook has generated earnings and intrinsic value growth for many years, driven largely by the mostly free services the company provide to people who can easily choose to stop using them and spend their time elsewhere.
That said, we are regularly asked about the perceived high regulatory risk around Facebook. We examine risks to businesses and, in particular, regulatory risks through a lens of risk exposure versus actual risk. For instance, the antitrust complaints globally against Facebook based on their size, influence, and strong competitive positioning, definitionally exposes these companies to more regulatory risk than much smaller businesses. However, we do not believe risk exposure is the same as actual risk…”
1. Shopify Inc. (NYSE:SHOP)
Helmer’s Stake Value: $261,484,000
Percentage of Hamilton Helmer’s 13F Portfolio: 26.77%
Number of Hedge Fund Holders: 85
Topping our list is Shopify Inc. (NYSE: SHOP). Shopify Inc. (NYSE: SHOP) is a commerce company and provides an ecommerce platform and services in Canada, the United States, the United Kingdom, Australia, Latin America, and internationally. The company’s platform provides merchants to run their business in various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces. Shopify Inc. (NYSE: SHOP) also sells custom themes and apps, and registration of domain names. Shopify Inc. (NYSE: SHOP) was incorporated in 2004 and is headquartered in Ottawa, Canada.
On July 29, Wedbush analyst Ygal Arounian raised the firm’s price target on Shopify Inc. (NYSE: SHOP) from $1,650 to $1,800 and kept an Outperform rating on the shares. The analyst notes Shopify Inc. (NYSE: SHOP) reported strong Q2 revenue and profitability beats, with continued gross merchandise volume strength. Management continues to see e-commerce gross merchandise volume at a new normal level here, with continued growth ahead, Arounian adds.
Based on the latest 13F filings, Strategy Capital holds $261.48 million worth of shares in Shopify Inc. (NYSE: SHOP) as of the second quarter of 2021. These shares represent 26.77% of the fund’s investment portfolio.
In the second quarter of 2021, Shopify Inc. (NYSE: SHOP) had an actual EPS of $2.24, beating estimates by $1.28. Shopify Inc. (NYSE: SHOP) also reported revenues amounting to $1.12 billion, up 56.71% year over year, beating estimates by $69.15 million. Shopify Inc. (NYSE: SHOP) gained 25.96% over the past 6 months and 33.64% year to date.
By the end of the second quarter of 2021, 85 hedge funds out of the 873 tracked by Insider Monkey held stakes in Shopify Inc. (NYSE: SHOP) worth roughly $13.97 billion. This is compared to 91 hedge funds in the previous quarter with a total stake value of approximately $9.98 billion.
Polen Capital, an investment management firm, published its “Polen International Growth” second quarter 2021 investor letter in which it mentioned Shopify Inc. (NYSE: SHOP) and discussed its stance on the firm. Here’s what Polen Capital had to say:
“Shopify, a Canadian software company, enables merchants and entrepreneurs to run their operations efficiently. We like the focus Shopify brings to merchants. Its products allow merchants to set up an online store, manage inventory, interact with customers, accept payments, and monitor the flow of goods through various distribution channels in one centralized dashboard. Though it offers missioncritical capabilities, Shopify subtly operates in the background while allowing merchants to interact with customers.
As the world increasingly sees direct-to-consumer interactions take flight, both nascent and established brands are adopting Shopify. Today, nearly two million businesses utilize Shopify to sell more than $150 billion in merchandise across the platform. We think these numbers can grow significantly from here. Further, newer product categories like lending and fulfillment (along with a litany of other future merchant pain points we think Shopify can help solve) coupled with higher attach rates for payments could drive higher monetization of a growing user base in the coming five years. We believe Shopify can grow its earnings power at a 30% rate for the coming five years.”
See also 10 Best Tech Stocks to Invest in For Long Term and 10 Best Tech Stocks to Buy Right Now Under $10.
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Disclosure: None. 9 Tech and Software Stocks to Buy According to Hamilton Helmer’s Strategy Capital is originally published on Insider Monkey.
