Brad Gerstner is Talking About These 5 Stocks

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 158 

Alphabet Inc. (NASDAQ:GOOG) is a diversified technology company. Gerstner discussed the stock during his interview with CNBC on May 3. Per the hedge fund manager, the most important takeaway from the drop in prices of growth stocks like Google was that investors should be “buying the stocks that they have been waiting to buy, hold them for a year or two, and then exit higher”. He added that those waiting for a broad correction in the value of growth firms for buying would be in the market at a time of high uncertainty. 

On April 27, Wells Fargo analyst Brian Fitzgerald kept an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) stock and lowered the price target to $3,400 from $3,600, noting the “mixed” first quarter results of the firm amid slowed YouTube growth. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG) with 2.9 million shares worth more than $8.5 billion. 

In its Q4 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:

“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following Alphabet Inc. (NASDAQ:GOOG) and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”