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An Investor Bets Big on These Five Tech Stocks; Should You Follow Him?

Founded in 1988, Giovine Capital, managed by Thomas Giovine, holds a relatively small equity portfolio, worth around $130.4 million as of the end of September. Focusing on the long-term horizon, Giovine has a low turnover rate and in the third quarter did not close any positions, though it did trim its stakes in 35 holdings. Moreover, the fund initiated two new positions and raised its exposure to seven stocks. Overall, the portfolio is highly diversified across sectors, with consumer discretionary, tech, and industrial stocks amassing the largest portions. In this article we will focus on Giovine’s top tech picks.

Egorov Artem/

Egorov Artem/

But why are we interested in the picks of Giovine? The reason is simple: Giovine is one of over 700 funds that we track as part of our investment strategy. We believe that imitating some of the investments that these investors are collectively bullish on can generate significant returns. The key is to follow these funds into their best small-cap ideas, the top 15 of which have returned 102% since August 2012, beating the S&P 500 ETF (SPY) by around 53 percentage points (see more details here).

Thomas A. Giovine
Thomas A. Giovine
Giovine Capital

Giovine’s fifth tech pick is Verisk Analytics, Inc. (NASDAQ:VRSK), in which the fund revealed holding 17,405 shares worth $1.29 million. Verisk is engaged in risk information provision for insurance, healthcare, and financial services companies, among other sectors. The stock has advanced by around 9.5% since the beginning of the year and is trading at around 21.80-times forward earnings. Verisk Analytics, Inc. (NASDAQ:VRSK) recently acquired Infield Systems, which will become part of its Wood Mackenzie business, improving its supply chain and upstream capabilities. Overall, 37 funds from our database held shares of Verisk Analytics, Inc. (NASDAQ:VRSK) at the end of June.

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In Autodesk, Inc. (NASDAQ:ADSK), Giovine reported holding 39,920 shares valued at $1.76 million. Following a 42% growth in the last month, the stock is up by 7% since the beginning of the year and can gain even more ground, since it has recently become an activist target. Scott Ferguson’s Sachem Head Capital initiated a 5.7% activist stake in Autodesk, Inc. (NASDAQ:ADSK) this week and expressed its intention to engage in discussions with the firm’s management. Passive investors often tend to jump on a stock following an activist, so we might see an increase in Autodesk, Inc. (NASDAQ:ADSK)’s popularity. As of June 30, 45 funds among those that we track reported holding 19.70% of the company’s outstanding stock.

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On the next page, we are going to take a look at Giovine’s much larger tech picks, such as QUALCOMM, Inc. (NASDAQ:QCOM), Yahoo! Inc. (NASDAQ:YHOO), and Apple Inc. (NASDAQ:AAPL).

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