Below are the Candlestick’s top 5 stock holdings. For our discussion and a comprehensive list see Candlestick Capital’s Top 10 Stock Holdings.
5. Post Holdings, Inc. (NYSE: POST)
Candlestick Capital Management has initiated a position in Post Holdings, Inc. (NYSE: POST) during the final quarter of 2019 and the hedge fund has raised its stake by 33% in the September quarter of last year. It is the fifth-largest stock holding of Candlestick’s 13F portfolio, accounting for 2.12% of the overall portfolio.
Post Holdings underperformed in the last twelve months due to negative revenue growth. Its shares are down 8.37% in the last twelve months.
First Eagle Investment Management believes that Post Holdings shares are trading at discount. Here is what First Eagle Investment Management stated in an investors letter:
“Post detracted in the quarter, as the company’s prepared-egg business—which historically has primarily served fast-food customers such as McDonalds—has been hurt in the near term by the pandemic. The company has temporarily shifted some of its egg production to retail supermarkets given the strong demand and is also seeing very solid demand for much of the remainder of its food portfolio, including cereals, frozen meals and shelf-stable protein shakes. We continue to believe the shares of Post are undervalued based on our estimate of their intrinsic value.”
4. FedEx Corporation (NYSE: FDX)
Air courier service FedEx Corporation (NYSE: FDX) is the fourth largest stock holding of Jack Woodruff’s portfolio. The firm has initiated a big position in the September quarter, accounting for 3.15% of the overall portfolio. Despite a strong performance in the first three quarters of 2020, FedEx underperformed in the final quarter of 2020 and extended the downside into the first month of 2021.
Cartenna Capital, which has posted a return of 5.6% for the third quarter, seeks to rebuild its position in FedEx Corporation as the opportunity arises. Here is what Cartenna stated in an investors letter:
“FedEx Corporation (“FDX”) was the Fund’s largest positive contributor to performance during Q3, and we remain very bullish on the entire parcel sector into Q4. When we initially purchased shares of FedEx, it represented an extremely attractive idiosyncratic opportunity embedded within our constructive transportation market outlook. For the past several years, we have generally held a negative bias on FedEx operations as they have routinely suffered from both macroeconomic headwinds (US-China trade war) and company specific issues that have been self-inflicted (i.e. lost Amazon as a customer, poor TNT acquisition/ransomware attack). However, as FedEx began their Fiscal Year 2021 in June, many of these headwinds were poised to reverse and become tailwinds. We have taken some profits recently but will look to build back our stake in FDX as opportunity arises.”
3. Amazon.com (NASDAQ: AMZN)
The hedge fund has sold 29% of its stake in Amazon.com (NASDAQ: AMZN) during the September quarter to capitalize on the share price rally. Despite that, Amazon is Candlestick’s third-largest stock holding, representing 3.53% of the overall portfolio.
L1 Capital International Fund, which has returned 5.1% for the third quarter, is bullish on the future fundamentals of Amazon. Here is what L1 Capital stated:
“Several investments in the technology sector were trimmed on valuation grounds with the proceeds used to increase our investment in Amazon. Amazon’s successful flywheel business model and Amazon Web Services are well known. However, we believe the current share price under‑appreciates:
– The consistency and longevity of Amazon’s growth potential in its key businesses;
– The importance of additional revenue streams such as advertising which are high margin and growing rapidly; and
– The strengthening barriers to competition and competitive advantages arising from Amazon’s stepped‑up investment in logistics and other infrastructure.”
2. L Brands, Inc. (NYSE: LB)
Candlestick Capital Management has benefited from its position in L Brands (NYSE: LB) because shares of L Brands rallied almost 100% in the last twelve months. Despite selling 28% of stake in the September quarter, LB is the second-largest stock holding of its 13F portfolio.
L Brands, Inc. operates as a specialty retailer of women’s intimate and other apparel, personal care, and beauty and home fragrance products. Its September quarter comparable sales soared 28% from the past year period and more than double the analysts estimate.
1. The Estée Lauder Companies Inc. (NYSE: EL)
Jack Woodruff has created a big position in The Estée Lauder Companies Inc. (NYSE: EL) during the September quarter and it appears that the hedge fund has benefited from its stake. Shares of the Estée Lauder Companies Inc. (NYSE: EL) grew 11% in the last three months, extending the nine months gains to 45%.
Polen Capital Management, which has generated a return of 9.09% gross of fees from the Polen Global Growth Composite Portfolio for the third quarter, is bullish on the future fundamentals of The Estée Lauder Companies. Here is what Polen Capital Management stated:
“While Estée Lauder also has brick-and-mortar exposure, it has been successfully shifting its business online. In the most recent quarter, online accounted for roughly 40% of sales in both the U.S. and China, with online sales growing swiftly on a large base. Estée Lauder is the global market leader in prestige beauty products, which is a large and growing market. We believe competitive advantages consist of brands and economies of scale, similar in concept and execution to Nike and Adidas. Global cosmetics companies, and Estée Lauder in particular, have been pulling away from the “also-rans” as a result of their scale, global reach, capital, and new omnichannel and social capabilities. Like Nike and Adidas, Estée Lauder successfully executes the flywheel of reinvesting billions of dollars into supporting its brands. Last year, Estée Lauder spent ~$3.5B on advertising and promotion. This equates to ~24% of revenue, which is a hurdle consistently too high for new entrants to clear.”
Please also see 10 Biggest Quant Funds in The World, 10 Stock Picks and GameStop (GME) Casualty Melvin Capital’s Top 10 Stock Holdings
