In this article, we will take a look at the top 9 stocks in Dev Kantesaria’s portfolio.
Hedge fund manager Dev Kantesaria is the portfolio manager and managing partner at the Pennsylvania-based investment management firm, Valley Forge Capital Management, one of the notable equity hedge funds in the mid-Atlantic region, that makes use of a long-biased equity strategy, employing a bottom-up fundamental approach to find high-quality businesses with strong organic growth, predictable earnings and capital efficiency. Holding a B.S degree from Massachusetts Institute of Technology, and his M.D from Harvard Medical School, Kantesaria began his career in investment banking, finance and asset management as a senior associate at McKinsey & Company. After two years at the firm, he joined TL Ventures as a principal till 2006. He later served as a general partner at Devon Park Bioventures, before establishing Valley Forge Capital Management in July of 2007.
Analyzing companies over a multi-year timeframe, Dev Kantesaria focuses on long-term business prospects and fundamentals, rather than current earnings when investing. His Valley Forge Capital Management oversees over $2.57 billion in its investment portfolio as of the second quarter of 2021.
Mastercard Incorporation (NYSE:MA), Amazon.com, Inc. (NASDAQ:AMZN), Visa, Inc. (NYSE:V) and Adobe, Inc. (NASDAQ:ADBE) are some of the most notable stocks in Valley Forge Capital Management’s investment portfolio at the end of the second quarter of 2021.
Our Methodology
Let us now examine the top 9 stocks in Dev Kantesaria’s portfolio. For this article, we analyzed the top stocks from Valley Forge Capital Management’s 13F portfolio as of the end of the second quarter.
Dev Kantesaria’s Stock Portfolio: Top 9 Stocks
9. Autodesk, Inc. (NASDAQ:ADSK)
Valley Forge Capital Management’s Stake Value: $74 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 2.87%
Number of Hedge Fund Holders: 64
California-based Autodesk, Inc. (NASDAQ:ADSK) starts off our list of the top 9 stocks in Dev Kantesaria’s portfolio. It operates as a technology company that markets 3D design, engineering, and entertainment software and services.
Based on our database, Valley Forge Capital Management holds 253,608 shares in Autodesk, Inc. worth more than $74 million as of Q2. At the end of the second quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Autodesk, Inc., down from 66 the preceding quarter worth $3 billion.
On October 14, Piper Sandler analyst Weston Twigg initiated coverage of Autodesk, Inc. with an Overweight rating and $338 price target.
Polen Capital, in its Q3 2021 investor letter, mentioned Autodesk, Inc. (NASDAQ:ADSK) and discussed its stance on the firm. Here is what the fund said:
“Shares of Autodesk have lagged recently due to expectations of short-term headwinds to free cash flow as the company transitions its billing structure to annual payments from multi-year up-front subscription payments. We view this as a transient issue and believe Autodesk’s attractive long-term growth profile remains in place.”
8. Intuit Inc. (NASDAQ:INTU)
Valley Forge Capital Management’s Stake Value: $105.49 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 4.09%
Number of Hedge Fund Holders: 66
Intuit Inc. (NASDAQ:INTU) is a California-based company that focuses on financial software, serving both individual customers and enterprises. Some of the company’s flagship products include tax preparation software TurboTax and business accounting app QuickBooks.
Dev Kantesaria’s Valley Forge Capital Management currently owns 215,221 shares of Intuit Inc., worth over $105.49 million and representing 4.09% of the fund’s investment portfolio. Of the 873 elite funds being tracked by Insider Monkey, 66 reported owning stakes in Intuit Inc. at the end of the second quarter of 2021.
On September 14, Evercore ISI analyst Kirk Materne kept an Outperform rating alongside a $600 price target on the shares of Intuit Inc..
Cooper Investors, in its Q3 2021 investor letter, mentioned Intuit Inc. (NASDAQ:INTU). Here is what the fund said:
“The other meaningful deal during the quarter was Intuit’s acquisition of Mailchimp for $12bn. Intuit has reinvented itself over the last decade and thrived with a leadership position in QuickBooks Online, the financial accounting software for small businesses (effectively the ‘Xero of the US’). We originally invested in Intuit in February 2020, excited by the QuickBooks prospects.
Management have executed exceptionally well on the opportunity set which has seen the shares double since our initial purchase. However, the company has now conducted two meaningful deals in Mailchimp and Credit Karma worth a combined US$20bn over the last 12 months. The investment proposition has shifted from a focus on QuickBooks to now being a financial and small business software conglomerate. We continue to very much admire the company, but with Intuit now trading on 50x forward earnings we no longer see such attractive latency on offer, nor the rewards for the level of execution risk and thus we have exited the position.”
7. Adobe Inc. (NASDAQ:ADBE)
Valley Forge Capital Management’s Stake Value: $113.7 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 4.41%
Number of Hedge Fund Holders: 89
Originally known as Adobe Systems Incorporated, Adobe Inc. is a multinational computer software company that engages in the provision of digital media and marketing solutions.
At the end of the second quarter of 2021, 89 hedge funds in the database of Insider Monkey held stakes worth $13.1 billion in Adobe Inc. down from 107 in the preceding quarter worth $12.1 billion. According to the second quarter securities filings, Valley Forge Capital Management holds 194,189 shares in the company, amounting to more than $113.7 million, representing 4.41% of the investment firm’s portfolio value.
On September 22, JPMorgan analyst Sterling Auty raised the firm’s price target on Adobe Inc. to $680 from $660, and kept an Overweight rating on the shares of the company.
In its second-quarter 2021 investor letter, Richie Capital Group mentioned Adobe Inc.. Here is what the fund said:
“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. Visa Inc. (NYSE:V)
Valley Forge Capital Management’s Stake Value: $237.39 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 9.22%
Number of Hedge Fund Holders: 162
Visa Inc. is a California-based multinational financial services corporation that manages and facilitates the electronic transfer of funds across more than 200 countries.
As of June 2021, Dev Kantesaria holds over 1 million shares in Visa Inc., amounting to more than $237.39 million in worth and representing 9.22% of his hedge fund’s portfolio value.
By the end of the second quarter, 162 hedge funds tracked by Insider Monkey reported owning stakes in Visa Inc.. The total worth of these stakes is $27.6 billion. This is compared to 164 funds that had stakes in the company in the previous quarter, with a total worth of $26.5 billion.
On October 28, Morgan Stanley analyst James Faucette reiterated an Overweight rating on shares of Visa Inc., alongside a $280 price target.
Polen Capital, in its Q3 2021 investor letter, mentioned Visa Inc. (NYSE:V) and discussed its stance on the firm. Here is what the fund had to say:
“Visa Inc. faced pressure as some believe these “old payment infrastructure” businesses will be disrupted by newer fintech companies using blockchain, buy now, pay later (BNPL), or other innovations to provide better/cheaper payment services. However, we believe that some of these technologies have meaningful limitations which could benefit existing payment networks. For example, BNPL transactions are often funded with cards and turn a one-time transaction into many smaller ones with more transaction fees for Visa. Just like with regulation, we continually monitor for competition and technological disruption. As of now, we do not see a significant risk in the foreseeable future to this company.”
5. Amazon.com, Inc. (NASDAQ:AMZN)
Valley Forge Capital Management’s Stake Value: $270.79 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 10.52%
Number of Hedge Fund Holders: 271
Multinational e-commerce giant Amazon.com, Inc., considered to be the world’s most valuable brand, is one of the Big Five companies in the US information technology sector.
On October 21, Baird analyst Colin Sebastian maintained an Outperform rating on Amazon.com, Inc., alongside a $4000 price target on its shares.
Of the 873 elite funds tracked by Insider Monkey, 271 held stakes in Amazon.com, Inc. worth $60.49 billion in the second quarter of 2021, compared to 243 funds in the first quarter with total stakes amounting to around $50.4 billion.
Valley Forge Capital Management, as of Q2 2021, holds 78,715 shares in the company, worth more than $270.79 million, and representing 10.52% of the investment firm’s portfolio.
Ken Fisher’s Fisher Asset Management is among the most notable stakeholders in Amazon.com, Inc., with over 1.87 million shares worth more than $6.45 billion.
Madison Funds, in its Q3 2021 investor letter, mentioned Amazon.com, Inc. (NASDAQ:AMZN). Here is what the fund had to say:
“We did add a modest new position weight to the portfolio in the quarter in Amazon.com, Inc. stock (AMZN). We acknowledge that many aspects of Amazon’s merit as an investment are well appreciated. However, our work leads us to conclude that shares are attractive. Leadership positions in both e-commerce and cloud computing provide the company with significant durable competitive advantages in industries that we think can produce above average growth over the next decade. Over the past year, AMZN shares have trailed the market as investors debate near-term growth prospects following the pandemic-induced e-commerce demand. Additionally, margins have been depressed due to Amazon’s unprecedented increases in spending to build out fulfillment and in-house logistics capabilities – Amazon will build out more square footage this year and last than it did cumulatively over the previous 10 years, more than doubling its in-house delivery capacity. We like the investments Amazon is making and believe they will further advantage the company relative to other retailers, making it nearly impossible for competitors to match the same level of delivery speed and convenience. With its large and frequently engaged customer base, Amazon has multiple mechanisms to make money, including selling advertising and enhanced subscription services. Within the cloud business, we forecast Amazon Web Services (AWS) leveraging its strengths in Infrastructure-as-a-service (IaaS) to move into higher value segments of cloud computing (such as platform-as-a-service: PaaS), allowing the company to continue outgrowing the overall IT sector with strong profitability. While Amazon shares have performed extremely well over the long-term, we think near-term concerns about whether Amazon will earn a return on its accelerated investments provide an opportunity now for investors willing to look through the investment period. Our view is that the investments likely earn strong returns and extend Amazon’s competitive advantages and aboveaverage growth.”
4. Fair Isaac Corporation (NYSE:FICO)
Valley Forge Capital Management’s Stake Value: $337.5 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 13.11%
Number of Hedge Fund Holders: 28
Fair Isaac Corporation (NYSE:FICO) is a data analytics company based in San Jose, California, that provides credit scoring services in the United States. Its FICO score, a measure of consumer credit risk, has become a fixture of consumer lending in the country.
On October 8, RBC Capital analyst Ashish Sabadra lowered his price target on Fair Isaac Corporation to $463 from $550, and kept a Sector Perform rating on the shares of the company. The analyst notes that the company’s valuation looks “attractive” after the stock’s pullback.
According to the second quarter securities filings, Dev Kantesaria’s hedge fund holds 671,509 shares in Fair Isaac Corporation, worth more than $337.5 million.
Gabriel Plotkin of Melvin Capital Management is one of the biggest stakeholders in the company as of the end of the second quarter, according to the data tracked by Insider Monkey.
Overall, 28 funds were bullish on Fair Isaac Corporation by the end of the June quarter, compared to 27 in the previous quarter.
Richie Capital Group, in its Q3 2021 investor letter, mentioned Fair Isaac Corporation (NYSE:FICO). Here is what the fund had to say:
“Fair Isaac Corp (FICO – down 18.84%) – The stock price for the predictive analytics software firm has declined off of very little news outside of an article in the Wall Street Journal highlighting the increasing competitive threats. We view much of this as known. Anytime a company dominates a market in a monopoly-like manner, it will naturally attract competitors as well as customers who will attempt to push back on pricing. However, their solutions are highly predictive within the subprime market and the company continues to identify new opportunities for their software solutions. FICO reported a solid Q3 in August beating earnings and revenue estimates. The report seemed to imply slowing revenue growth, specifically in their DMS and Applications revenue. We believe the market is missing the bigger picture. FICO is transitioning from a licensing model to a subscription model. These transitions typically lead to near term growth headwinds but longerterm profitability improvement and stickier customers. FICO’s scores revenue continues to grow at a double-digit annual rate, and margins (Gross, Operating, and Net Income) are expanding which supports the premise that the company is maintaining their pricing power. We view this decline as a buying opportunity. Management seems to agree with our thinking as they announced a $500M stock repurchase program on August 18th.”
3. Moody’s Corporation (NYSE:MCO)
Valley Forge Capital Management’s Stake Value: $418.6 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 16.26%
Number of Hedge Fund Holders: 44
Moody’s Corporation is a New York-based credit rating and risk management company that assigns evaluates bonds and stocks based on the investment risk they possess.
As of Q2 2021, Valley Forge Capital Management holds over 1.15 million shares in Moody’s Corporation. These shares amount to more than $418.6 million and account for 16.26% of the fund’s total investment portfolio.
On September 7, Oppenheimer analyst Owen Lau raised the price target on Moody’s Corporation to $418 from $406, and maintained an Outperform rating on the shares of the company.
By the end of the second quarter of 2021, 44 hedge funds out of the 873 tracked by Insider Monkey held stakes in Moody’s Corporation worth roughly $16 billion. This is compared to 55 hedge funds in the previous quarter with a total stake value of approximately $13.7 billion.
According to our database, Warren Buffett’s Berkshire Hathaway is the leading shareholder in the company, with over 24.6 million shares, worth approximately $8.93 billion.
In the Q2 2021 investor letter of Qualivian Investment Partners, the fund mentioned Moody’s Corporation. Here is what the fund said:
“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”
2. Mastercard Incorporated (NYSE:MA)
Valley Forge Capital Management’s Stake Value: $493.8 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 19.18%
Number of Hedge Fund Holders: 156
A global leader in payment innovation and technology, Mastercard Incorporated is a financial services company, based in New York.
At the end of the second quarter of 2021, 156 hedge funds in the database of Insider Monkey held stakes worth $17.10 billion in Mastercard Incorporated, up from 154 the preceding quarter worth $17.09 billion.
Based on the 13F Filings for the second quarter of 2021, Dev Kantesaria held 1.35 million shares in the company, worth more than $493.8 million. These shares represented 19.18% of his hedge fund’s total portfolio value.
On October 29, Raymond James analyst John Davis reiterated an Outperform rating on Mastercard Incorporated, alongside a price target of $430 on its shares.
Alexander Becker of Codex Capital is another prominent shareholder in Mastercard Incorporated, with 23,200 shares, worth more than $8.46 billion.
In the Q2 2021 investor letter of Qualivian Investment Partners, the fund mentioned Mastercard Incorporated. Here is what the fund said:
“Mastercard: Q2 revenue and EPS beat consensus estimates by 3.7% and 12% respectively. Operating margins also beat consensus by +240 bps. Gross domestic volume growth of +38.3% (+32.8% in constant currency) was buttressed by continued e-commerce strength and better in-store performance, while purchase volumes grew 41.8% (35.5% in constant currency). Cross border performance was strong, but durability remains uncertain given uncertainty arising from the Delta variant and its impact on travel and tourism. We believe Mastercard has a robust runway for growth given further travel recovery, new/existing partnerships, traction in digital payments, and ongoing economic recovery.”
1. S&P Global Inc. (NYSE:SPGI)
Valley Forge Capital Management’s Stake Value: $522.3 million
Percentage of Valley Forge Capital Management’s 13F Portfolio: 20.29%
Number of Hedge Fund Holders: 71
S&P Global Inc. is a company that provides financial information and analytics, operating through its S&P Global Ratings, S&P Global Market Intelligence and S&P Global Dow Jones Indices segments.
On September 16, Oppenheimer analyst Owen Lau raised his price target on S&P Global Inc. to $550 from $476, and kept an Outperform rating on the shares of the firm.
Dev Kantesaria’s Valley Forge Capital Management currently holds over 1.27 million shares in S&P Global Inc.. These shares are valued at approximately $522.3 million and represent 20.29% of the fund’s investment portfolio.
Of the 873 elite funds tracked by Insider Monkey, 71 were long in S&P Global Inc. at the end of June, up from 66 in the first quarter of 2021. Chris Hohn of TCI Fund Management is the leading stakeholder of the company.
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