In this article, we will be discussing the 5 tech stocks billionaire Daniel Sundheim is buying. If you want to see our detailed analysis of Sundheim’s hedge fund returns, investment philosophy, and history, go directly to Billionaire Daniel Sundheim is Buying These 10 Tech Stocks.
5. StoneCo Ltd. (NASDAQ:STNE)
Sundheim’s Stake Value: $129.7 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.84%
Number of Hedge Fund Holders: 44
StoneCo Ltd (NASDAQ:STNE) operates as a provider of financial technology, based in the Cayman Islands. The company provides a platform for e-commerce, across in-store, online and mobile channels. Ranked fifth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying, StoneCo Ltd. (NASDAQ:STNE) has a market capitalization of $10.39 billion.
On June 23, investment advisory New Street initiated coverage of StoneCo Ltd. (NASDAQ:STNE) stock with a Neutral rating and a price target of $82.
Based on the second quarter data, Daniel Sundheim’s D1 Capital Partners held over 1.93 million shares of StoneCo Ltd. (NASDAQ:STNE), amounting to more than $129.7 million in worth, representing 0.84% of the fund’s investment portfolio. At the end of the second quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in StoneCo Ltd. (NASDAQ: STNE), up from 39 in the previous quarter worth $2.1 billion.
Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway is among the leading shareholders of StoneCo Ltd. (NASDAQ:STNE), with over 10.6 million shares worth roughly $717.2 million.
In its Q2 2021 investor letter, JDP Capital Management, an asset management firm, commented on the future prospects of StoneCo Ltd. (NASDAQ:STNE). Here is what the fund said:
“StoneCo (NYSE: STNE) has been in our portfolio since early 2019 and has appreciated 225% since. In the first half of 2021 the stock was down nearly 20% and was a drag on the fund’s performance.
Stone is a leading fintec company in Brazil that provides back-office software, loans and other financial services to small and medium sized businesses (SMBs). We have discussed Stone in past letters and the company’s “ladder up” from a card processor to a supplier of enterprise software used to sell financial products on top of such as working capital loans…” (Click here to see the full text)
4. DLocal Limited (NASDAQ:DLO)
Sundheim’s Stake Value: $135 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 20
DLocal Limited (NASDAQ:DLO) provides a payments technology platform that connects global enterprises with consumers. Ranked fourth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying, the Uruguay-based company manages mass online payments and transactions.
On August 19, HSBC analyst Neha Agarwala raised her price target on DLocal Limited (NASDAQ:DLO) to $55 from $52, and kept a Hold rating on the shares of the company.
The company issued its quarterly earnings result for the second quarter of 2021 on August 18, with a reported EPS of $0.07, crossing market estimates by $0.02. The reported revenue came in at $58.96 million, beating the estimated revenue by $18.26 million.
D1 Capital Partners held over 2.57 million share of DLocal Limited (NASDAQ:DLO) in the second quarter of 2021, worth more than $135 million. These shares represented 0.88% of the fund’s total portfolio value. By the end of the second quarter of 2021, 20 hedge funds out of the 873 tracked by Insider Monkey held stakes in DLocal Limited (NASDAQ:DLO) worth roughly $431.8 million.
3. Alkami Technology, Inc. (NASDAQ:ALKT)
Sundheim’s Stake Value: $188 million
Percentage of Daniel Sundheim’s 13F Portfolio: 1.23%
Number of Hedge Fund Holders: 13
Alkami Technology, Inc. (NASDAQ:ALKT) is a software company based in Texas that provides a cloud-based digital banking platform for credit unions and banks. The company has a market capitalization of $2.21 billion, and is ranked third on the list of the 10 tech stocks billionaire Daniel Sundheim is buying.
As of the second quarter of 2021, Daniel Sundheim holds 5.2 million shares of Alkami Technology, Inc. (NASDAQ:ALKT), amounting to over $188 million in worth and accounting for 1.23% of the fund’s investment portfolio. At the end of the second quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $265.8 million in Alkami Technology, Inc. (NASDAQ:ALKT).
For the second quarter of 2021, Alkami Technology, Inc. (NASDAQ:ALKT) reported earnings per share at -$0.08, beating market estimates by $0.01. The company also reported revenues of $36.7 million, surpassing estimates by $2.14 million.
On May 10, Needham analyst Mayank Tandon initiated coverage of Alkami Technology, Inc. (NASDAQ:ALKT) with a Buy rating and $50 price target.
In its Q2 2021 investor letter, Baron Discovery Fund explained why they were investing in Alkami Technology Inc. (NASDAQ:ALKT). Here is what the fund said:
“This quarter, we invested in Alkami Technology Inc., a cloud-based digital banking platform that enables financial institutions (primarily credit unions) to onboard and engage new users, accelerate revenues, and meaningfully improve operational efficiency. The market opportunity is large with Alkami focusing on the top 2,000 of the 10,000 total financial institutions in the U.S. (excluding the mega-banks). Many financial institutions use clunky, outdated legacy systems today that are not well suited to the shift to digital banking (which has been accelerated by COVID). As a result, we are seeing financial institutions significantly increase their IT investments in these products. We believe Alkami will be a prime beneficiary of this shift as it stands out due to its highly rated user experience, leading brand with credit unions, and platform flexibility (multi-tenant, single code base platform). Alkami is well positioned to grow revenue 25% or more for the next several years driven by a combination of expanding existing customer relationships, adding new clients (heightened focus on banks in addition to credit unions), new product development, and selective acquisitions. We also believe that the company’s 30% or greater long-term adjusted EBITDA margin target is achievable.”
2. Farfetch Limited (NYSE:FTCH)
Sundheim’s Stake Value: $474.5 million
Percentage of Daniel Sundheim’s 13F Portfolio: 3.1%
Number of Hedge Fund Holders: 63
Farfetch Limited (NYSE:FTCH) is a UK-based company that owns and runs an online marketplace for luxury fashion apparel. It is ranked second on our list of the 10 tech stocks billionaire Daniel Sundheim is buying.
On October 4, Wedbush analyst Tom Nikic initiated coverage of Farfetch Limited (NYSE:FTCH) with a Neutral rating and $38 price target on its shares.
Latest data shows that D1 Capital Partners owned 9.42 million shares in Farfetch Limited (NYSE:FTCH) in the second quarter of 2021, worth $474.5 million, representing 3.1% of the portfolio. At the end of the second quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $4 billion in Farfetch Limited (NYSE: FTCH), up from 57 in the previous quarter worth $3 billion.
On August 19, Farfetch Limited declared its revenue generated for the second quarter of 2021 at $523.31 million, surpassing the forecast revenues estimates by $26.97 million.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, commented on the growth and profits of Farfetch Limited (NYSE:FTCH). Here is what the fund said:
“We established a small position in e-commerce company Farfetch, which is benefitting from the secular trends of growing ecommerce, the global market for personal luxury goods, and emerging market growth, particularly in China. The company is an e-commerce platform like Amazon, Mercado Libre, or Alibaba, and is the leading online luxury fashion retail platform.
Luxury fashion has much lower online penetration than general ecommerce, and Farfetch is differentiated because of its longstanding relationships with the generally family-controlled, brand-protective luxury product companies. Because of its luxury focus, Farfetch has both higher average order values and higher take rates relative to peers, driving higher gross margins.
In its recently ended fiscal 2020, Farfetch grew revenue 64% and gross profit 68%, the company should be EBITDA positive this year, and we believe the company can grow revenue more than 20% per year and EBITDA more than 50% per year for the foreseeable future. With its extremely low capital needs—capital expenditures were less than 2% of revenue last year—we expect the company’s free cash flow to grow even faster.”
1. Procore Technologies, Inc. (NYSE:PCOR)
Sundheim’s Stake Value: $654.9 million
Percentage of Daniel Sundheim’s 13F Portfolio: 4.28%
Number of Hedge Fund Holders: 28
Procore Technologies, Inc. (NYSE:PCOR) is an American company engaged in construction management software. Headquartered in California, it provides a platform for construction companies to manage their projects. Procore Technologies, Inc. (NYSE:PCOR) comes in at first place on our list of the 10 tech stocks billionaire Daniel Sundheim is buying.
In Q2 2021, the company posted revenue of $122.79 million, an increase of 27.2% on a year-over-year basis, beating market estimated revenues by $6.14 million.
On August 6, investment advisory Canaccord raised its price target on Procore Technologies, Inc. (NYSE:PCOR) to $110 from $100, with a ‘Buy’ rating on the shares.
Daniel Sundheim currently holds around 6.89 million shares of Procore Technologies, Inc. (NYSE:PCOR), amounting to more than $654.9 million in worth. These shares account for 4.28% of his hedge fund’s total investment portfolio. At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $2.08 billion in Procore Technologies, Inc. (NYSE:PCOR).
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