In this article, we discuss the top 10 stock picks of Amit Nitin Doshi’s Harbor Spring Capital.
Amit Doshi has been the managing partner at Harbor Spring Capital since 2012. Harbor a New York-based investment management firm. Doshi completed his Bachelor’s in economics from Harvard University in 2000, after which he joined The Goldman Sachs Group, Inc. (NYSE:GS) as an investment banking analyst. In 2002, Doshi switched to Madison Dearborn Partners, a Chicago-based private equity firm, as a private equity associate. In 2004, he enrolled for an MBA at Harvard University, graduating in 2006. Doshi also holds a JD from Harvard Law School. In 2008, he became the managing director at Tiger Global Management, where he stayed until 2012, when he left to join Harbor Spring Capital.
Doshi’s Q3 portfolio is valued at $1.41 billion, with assets under management worth $1.28 billion, as per the latest 13F filings. With a top ten holdings concentration of 73.35%, Doshi’s Q3 investment securities are concentrated in the information technology, finance, consumer discretionary, and communications sectors. As of September this year, Harbor Spring Capital’s top purchases include ServiceNow, Inc. (NYSE:NOW) and Coupa Software Incorporated (NASDAQ:COUP), whereas he sold out of Alibaba Group Holding Limited (NYSE:BABA), Meta Platforms, Inc. (NASDAQ:FB), and salesforce.com, inc. (NYSE:CRM).
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As of the third quarter of 2021, the most notable stocks in Amit Doshi’s 13F portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Shopify Inc. (NYSE:SHOP), Microsoft Corporation (NASDAQ:MSFT), and Dell Technologies Inc. (NYSE:DELL), among others discussed in detail below.
Our Methodology
We used Amit Nitin Doshi’s Q3 portfolio to curate a list of the top 10 stock picks of Harbor Spring Capital.
Amit Nitin Doshi’s Harbor Spring Capital Portfolio: Top Stock Picks
10. Twilio Inc. (NYSE:TWLO)
Harbor Spring Capital’s Stake Value: $28,054,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 1.97%
Number of Hedge Fund Holders: 98
Twilio Inc. (NYSE:TWLO) is an American cloud-based communications platform that is mainly utilized by software developers to communicate via its web service APIs. Twilio Inc. is a top stock in Amit Doshi’s Q3 portfolio, with Doshi owning 87,930 shares in the company via Harbor Spring Capital, worth over $28 million, representing 1.97% of the firm’s portfolio.
As of the second quarter, Insider Monkey’s database of elite funds indicated that 98 hedge funds were bullish on Twilio Inc., with stakes worth $7.89 billion.
Twilio Inc. announced Q3 earnings on October 27. EPS in the period totaled $0.01, beating estimates by $0.15. Revenue for the quarter came in at $740.18 million, up 65.23% year-over-year, exceeding estimates by $56.08 million.
Srini Nandury, an analyst from Summit Insights, kept a Buy rating on Twilio Inc. on November 1, with a price target of $450, following the Q3 earnings beat. The analyst expects Twilio Inc. to grow by at least 30% over the next few years.
Here is what Lakehouse Capital has to say about Twilio Inc. in its Q2 2021 investor letter:
“The Fund held 20 positions as of the end of June and exited four during the year (including) Twilio. The companies we exited were sold almost entirely on the basis of their valuations getting stretched well past their norms and to levels where the return profile no longer offered the asymmetric upside that led us to invest in the first place. We dislike selling on valuation as great growth companies are hard to find and letting winners run is an important facet of a winning growth strategy, however, we’re not gluttons for punishment either and in each of those cases we redeployed capital towards other high-quality growth companies with less demanding valuations.”
9. Booking Holdings Inc. (NASDAQ:BKNG)
Harbor Spring Capital’s Stake Value: $28,486,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 2.00%
Number of Hedge Fund Holders: 100
Harbor Spring Capital holds a $28.48 million stake in Booking Holdings Inc. (NASDAQ:BKNG), which is a Connecticut-based travel technology company that owns and manages multiple travel websites and travel metasearch engines in 200 countries, including Booking.com, Kayak.com, Cheapflights, and Rentalcars.com, among others.
John Staszak of Argus on November 10 upgraded Booking Holdings Inc. from Hold to Buy with a $3,060 price target. According to Staszak, Booking Holdings Inc. is expanding into Europe, where the vaccination rollout is strong, which will result in higher growth and strong earnings.
At the end of June this year, 100 hedge funds monitored by Insider Monkey were bullish on Booking Holdings Inc., down from 103 in the preceding quarter.
Here is what Ensemble Capital has to say about Booking Holdings Inc. in its Q3 2021 investor letter:
“Booking : On the March 20, 2020 conference call we referenced at the beginning of this letter, we discussed our assessment of online travel agent Booking Holdings during the initial phase of the pandemic. At that time, we explained why we continued to hold a position in the company. We highlighted that while we fully expected demand to collapse and be slow to recover, our analysis indicated that they were very well positioned to survive the pandemic even if it lasted much longer than expected. And we said that companies that survived the pandemic would be well positioned to thrive on the other side.
The key for us to hold the stock was our belief that traveling is hardwired into human DNA. While we could not know how long the pandemic would last, we were certain that when it was once again safe to travel, business would boom once again.
Today, more than 18 months later, travel has come roaring back despite the pandemic still not having come to an end. There continues to be significant barriers to travel, such as severe restrictions on international travel and the general health concerns of travelers. But in areas where people are allowed to travel, such as domestically within the United States, leisure travel has boomed…” (Click here to see the full text)
8. Radius Global Infrastructure, Inc. (NASDAQ:RADI)
Harbor Spring Capital’s Stake Value: $29,265,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 2.06%
Number of Hedge Fund Holders: 20
Radius Global Infrastructure, Inc. is a leading company that aggregates the rental streams underlying wireless and other communication websites by acquiring real properties and contractual rights. Operating in 21 countries, Radius Global Infrastructure, Inc. operates 6,000 websites and 8,000 loose streams. Harbor Spring Capital, as of September this year, owns 1.79 million shares in Radius Global Infrastructure, Inc., worth $29.26 million, representing 2.06% of the firm’s portfolio.
At the end of the second quarter, 20 hedge funds in the database of Insider Monkey were bullish on Radius Global Infrastructure, Inc., up from 17 in the preceding quarter.
7. Adobe Inc. (NASDAQ:ADBE)
Harbor Spring Capital’s Stake Value: $32,240,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 2.27%
Number of Hedge Fund Holders: 89
Adobe Inc. (NASDAQ:ADBE) is a California-based multinational computer software company that offers a range of software that caters to graphics, photography, illustration, and animation. The signature Adobe Inc. products include Adobe Photoshop, Adobe Illustration, Acrobat Reader, Adobe Creative Suite, and Adobe Creative Cloud.
Amit Joshi, via Harbor Spring Capital, owns 56,000 shares in Adobe Inc., worth $32.24 million, representing 2.27% of the firm’s portfolio as of September this year. According to the database of 873 hedge funds maintained by Insider Monkey, 89 funds were long Adobe Inc. at the end of the second quarter, down from 107 in the preceding quarter.
Brad Zelnick from Deutsche Bank initiated coverage of Adobe Inc. with a Buy rating on November 1, setting a price target of $770. The analyst expects strong growth in the upcoming quarters, since Adobe Inc. remains a market leader for digital experiences.
Adobe Inc. on September 21 announced Q3 earnings. EPS in the period totaled $3.11, beating estimates by $0.09. Revenue for Q3 came in at $3.94 billion, exceeding estimated revenue by $38.64 million.
Here is what Richie Capital Group has to say about Adobe Inc. in its Q2 2021 investor letter:
“Adobe Systems (ADBE – up 24.8%) – In the last 15 years, Adobe has transformed itself into a software behemoth, more than tripling its revenue since 2010. The company is famous for its namesake PDF-reader and photo-editing software Photoshop. However, ADBE sells a full suite of software products through a recurring subscription model. The company transitioned from selling boxed software to recurring subscriptions in 2013 and revenues have grown consistently since. The company achieved $13B in revenue in 2020 with 88% Gross Margins.”
6. BlackLine, Inc. (NASDAQ:BL)
Harbor Spring Capital’s Stake Value: $35,536,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 2.50%
Number of Hedge Fund Holders: 20
BlackLine, Inc. (NASDAQ:BL), one of the top stock picks of Amit Doshi, is a cloud-based enterprise software company that enables the automation of financial processes. Doshi, via Harbor Spring Capital, owns 301,000 shares in BlackLine, Inc. as of September this year, valued at $35.5 million, accounting for 2.5% of the firm’s Q3 portfolio.
BlackLine, Inc. announced its Q3 results on November 4. EPS in the period came in at $0.24, exceeding estimates by $0.13. Oppenheimer analyst Ray McDonough on November 5 kept an Outperform rating on BlackLine, Inc. stock, raising the price target from $130 to $140, following the Q3 earnings beat. The analyst also stated that demand for BlackLine, Inc.’s products has increased when compared to pre COVID-19 levels.
As of Q2, 20 hedge funds were long BlackLine, Inc., down from 24 in the preceding quarter.
Here is what Polen U.S. Small Company Growth Fund has to say about BlackLine, Inc. in its Q1 2021 investor letter:
“Blackline provides software that helps companies more accurately meet financial deadlines by automating accounting and reporting processes. Demand for their products trended upward, steadily and sustainably, during the latter half of 2020 as potential customers put more focus and investment dollars behind digital transformation. The company is seeing an increasing trend of large deals (new and expansion), progress in up-sells and cross sells with existing customers, and a large pipeline of transformational deals for 2021. We believe that the company’s willingness and ability to invest in new talent, product innovation, and automation have made its product offerings more attractive and well-positioned to take advantage of a global economic recovery.”
5. Workday, Inc. (NASDAQ:WDAY)
Harbor Spring Capital’s Stake Value: $35,984,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 2.53%
Number of Hedge Fund Holders: 72
Workday, Inc. (NASDAQ:WDAY) is an American software company specializing in cloud-based software for financial management and human capital management. Harbor Capital Management holds a $35.9 million stake in Workday, Inc. as of September this year, which represents 2.53% of the firm’s stock portfolio.
As of the second quarter of 2021, 72 hedge funds in the database of elite funds maintained by Insider Monkey reported owning stakes worth $5.18 billion in Workday, Inc..
Brad Sills from BofA reported on November 15 that healthy upsell deals, a growing customer base, and improving demand for the upcoming quarters is in the works for Workday, Inc.. He consequently kept a Buy rating on the stock, raising the price target from $310 to $360.
Here is what ClearBridge Investments has to say about Workday, Inc. in its Q1 2021 investor letter:
“In addition to the new issue market, we have been tactically adding growth exposure. We took advantage of the selloff in disruptors that comprise a large portion of the portfolio to initiate a position in enterprise software maker Workday.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Harbor Spring Capital’s Stake Value: $42,706,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.00%
Number of Hedge Fund Holders: 271
Billionaire Jeff Bezos’ Amazon.com, Inc. is a tech mega corporation, specializing in ecommerce, artificial intelligence, cloud computing, and digital streaming. It was revealed in a November 15 story that Amazon.com, Inc. will collaborate with International Business Machines Corporation (NYSE:IBM) to speed up the energy sector’s transition to the cloud, which will allow them to benefit from the on-demand services provided by AWS Cloud and IBM Cloud, resultantly freeing up resources and capital for energy companies to invest in a sustainable future.
Doshi’s Harbor Spring Capital holds 13,000 shares in Amazon.com, Inc. as of September 2021, worth $42.7 million, representing 3% of the firm’s investment portfolio.
The Q3 results for Amazon.com, Inc. failed to meet analysts’ expectations. Earnings for the quarter were announced on October 28, with EPS for the period totaling $6.12, missing analysts’ consensus estimates by $2.78. Similarly, revenue for Q3 came in at $110.81 billion, missing target revenue by -$784.89 million.
Ivan Feinseth from Tigress Financial kept a Buy rating on Amazon.com, Inc. on November 10, raising the price target from $4,370 to $4,460. The analyst believes that 2022 sales growth will be solid, and Amazon.com, Inc. is positioned well to navigate the supply chain bottlenecks.
Here is what Polen Capital has to say about Amazon.com, Inc. in its Q3 2021 investor letter:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
3. Shopify Inc. (NYSE:SHOP)
Harbor Spring Capital’s Stake Value: $44,741,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.15%
Number of Hedge Fund Holders: 85
Shopify Inc. is a Canadian multinational e-commerce giant that allows businesses to operate on its platform, and offers end-to-end services including processing payments, marketing, delivery and shipment, and customer engagement tools. Shopify Inc. operates in over 170 countries, and reported more than 1.7 million registered businesses as of May 2021.
Harbor Spring Capital holds 33,000 shares in Shopify Inc., as of September this year, valued at $44.7 million. This stock accounts for 3.15% of the firm’s Q3 portfolio.
Shopify Inc. posted its Q3 results on October 28. EPS in the period totaled $0.81, missing estimates by -$0.41. As of the second quarter of 2021, 85 hedge funds in the database of Insider Monkey were long Shopify Inc., down from 91 in the preceding quarter.
Loop Capital analyst Anthony Chukumba downgraded Shopify Inc. from Buy to Hold with a $1600 price target that remained unchanged, citing that the stock is trading at 34.1 times his estimated revenue for 2022.
ClearBridge Investments mentioned Shopify Inc. in its Q2 2021 investor letter. Here is what they said:
“Shopify (is one of the) companies that have become go-to platforms for small and medium size businesses (SMBs) engaged in e-commerce and social media marketing, rebounded strongly in the quarter after being caught in the selloff among high-multiple growth names since Vaccine Monday. These and the portfolio’s other disruptors had thrived through the first part of the pandemic, leading us to trim positions into strength and reallocate cash into more attractively priced evolving opportunities and steady compounders that had been overly punished by lockdowns and a drop in economic activity.”
2. Microsoft Corporation (NASDAQ:MSFT)
Harbor Spring Capital’s Stake Value: $47,785,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.36%
Number of Hedge Fund Holders: 238
Microsoft Corporation is one of the Big Five US tech companies, known for its computer software, operating systems, and relevant consumer electronics.
On October 26, Microsoft Corporation reported Q3 earnings. EPS for Q3 came in at $2.27, beating estimates by $0.19. Revenue for the period totaled $45.32 billion, surpassing estimates by $1.33 billion. Deutsche Bank analyst Brad Zelnick on November 1 initiated coverage of Microsoft Corporation with a Buy rating and a $390 price target. He believes that Microsoft Corporation can tap into the public cloud market effectively, which is valued at $127 billion in 2021.
Microsoft Corporation is one of the most sought after stocks by the smart money, with 238 hedge funds being bullish on the stock as of the second quarter of 2021.
Here is what Alger has to say about Microsoft Corporation in its Q3 2021 investor letter:
“Microsoft Corporation was among the top contributors to performance during the third quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 51% in the second quarter. This high unit volume growth is a primary driver of the company’s higher share price, but the company’s strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
1. Dell Technologies Inc. (NYSE:DELL)
Harbor Spring Capital’s Stake Value: $53,477,000
Percentage of Harbor Spring Capital’s 13F Portfolio: 3.76%
Number of Hedge Fund Holders: 62
Dell Technologies Inc. is the top stock pick of Harbor Spring Capital, as of September this year, with the investment firm owning stakes worth $53.4 million in the tech corporation, which accounts for 3.76% of the firm’s Q3 portfolio. Dell Technologies Inc. is an American multinational technology company that offers personal computers, smart phones, software, computer security, and information security services, among other related products and services.
As of Q2, 62 hedge funds were bullish on Dell Technologies Inc., up from 54 in the previous quarter.
Citi analyst Jim Suva, on November 4, kept a Buy rating on Dell Technologies Inc., raising the price target from $67.5 to $70. The analyst reported that the shares have outperformed since December 2020, gaining 50% year-to-date. However, Dell Technologies Inc. was removed from Citi’s US Focus List.
Here is what Third Point Management has to say about Dell Technologies Inc. in its Q3 2021 investor letter:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
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This article is originally published at Insider Monkey.
