In this piece, we will take a look at Jorge Paulo Lemann’s stock portfolio. If you want to skip our overview of Lemann, his firm, and the latest news revolving around 3G Capital, then you can skip ahead to Jorge Paulo Lemann’s Hedge Fund 3G Is Betting On These 5 Stocks.
Jorge Paulo Lemann is a Swiss-Brazilian entrepreneur who co-founded 3G Capital in 2004. The firm, headquartered in New York City and Rio de Janeiro, is a global investment management company focused on creating long-term value through strategic investments. Lemann, alongside his partners Marcel Herrmann Telles and Carlos Alberto Sicupira, garnered significant attention in 2013 when their investment firm collaborated with Warren Buffett to facilitate the merger between H.J. Heinz Company and Kraft Foods Group, resulting in the formation of The Kraft Heinz Company (NASDAQ:KHC). However, Lemann’s initial major success in business occurred in 1998 when he sold his bank, Banco Garantia, to Credit Suisse First Boston for $675 million. Banco Garantia, which Lemann founded in 1971, marked his first significant venture. In 2010, Lemann acquired Burger King as well, taking the company private before returning it to the public domain two years later. The trio of Lemann, Telles, and Sicupira also maintains control over the publicly traded retailer Lojas Americanas and the real estate investment firm São Carlos Empreendimentos e Participações S.A.
In addition, Lemann stands as a prominent figure in the brewing industry, known for his leadership in both the United States and globally. The Brazilian investor gained recognition when he acquired Anheuser-Busch InBev SA/NV (NYSE:BUD), the producer of renowned brands like Budweiser and Bud Light. In 2003, Lemann achieved a remarkable 35% profit margin from the brewery, with gross sales reaching an estimated US$2.7 billion. This success elevated Lemann’s profile not only in his native Brazil but also in other countries such as Argentina, Uruguay, Bolivia, and Paraguay.
In the December quarter of 2023, 3G Capital underwent significant restructuring of its 13F portfolio. Particularly noteworthy was the fund’s initiation of a new position in the Chinese e-commerce giant JD.com, Inc. (NASDAQ:JD) during the quarter, alongside the decision to divest from holdings in Google-parent Alphabet Inc. (NASDAQ:GOOG) and chip designer Arm Holdings plc (NASDAQ:ARMH). Additionally, notable adjustments were made to existing positions, including a 9% reduction in its stake in Amazon.com, Inc. (NASDAQ:AMZN), a substantial 43% decrease in its holdings of Chinese e-commerce firm Alibaba Group Holding Limited (NYSE:BABA), and a notable 49% decrease in its ownership of Pinduoduo Inc. (NASDAQ:PDD).
With these details in mind, let’s take a look at some of the stocks that Jorge Paulo Lemann’s 3G Capital is betting on. Some notable names in this list include Amazon.com, Inc. (NASDAQ:AMZN), Analog Devices, Inc. (NASDAQ:ADI), and Meta Platforms Inc (NASDAQ:META), among others.
Our Methodology
We selected the following stocks from Jorge Paulo Lemann’s 3G Capital portfolio as of Q4 2023. We have also mentioned the hedge fund sentiment towards each stock, which was assessed from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the last quarter of 2023. The list is arranged in ascending order of the number of 3G Capital’s stake value in each holding.
Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
9. Remitly Global, Inc. (NASDAQ:RELY)
Number of Hedge Fund Investors: 21
3G Capital’s Q4 2023 Investment Value: $6.11 million
Remitly Global, Inc. (NASDAQ:RELY) is an American-based online remittance company specializing in digital financial services tailored for immigrants, their families, and individuals both domestically and internationally. Its core offerings revolve around cross-border remittance services facilitated through its mobile application and website platforms.
Remitly Global, Inc. (NASDAQ:RELY) witnessed a notable surge in its stock price following its release of quarterly revenue figures that exceeded estimates, coupled with optimistic guidance provided in February. BMO Capital Markets analyst Rufus Hone responded by upgrading the stock from Market Perform to Outperform, while also raising the price target from $24 to $28. Initially, BMO’s concerns about potential faltering marketing spending had tempered their outlook on the stock. However, the positive quarterly report effectively assuaged those concerns, leading to the upgraded rating and increased price target.
Insider Monkey’s database of holdings of 933 elite hedge funds shows that 21 hedge funds were invested in Remitly Global, Inc. (NASDAQ:RELY) as of the end of the fourth quarter of 2023. The biggest stakeholder of Remitly Global, Inc. (NASDAQ:RELY) during this period was David Blood and Al Gore’s Generation Investment Management. Notably, 3G Capital held a $6.11 million stake in the company during the quarter.
Much like Amazon.com, Inc. (NASDAQ:AMZN), Analog Devices, Inc. (NASDAQ:ADI), and Meta Platforms Inc (NASDAQ:META), 3G Capital is betting on Remitly Global, Inc. (NASDAQ:RELY).
8. BILL Holdings Inc (NYSE:BILL)
Number of Hedge Fund Investors: 49
3G Capital’s Q4 2023 Investment Value: $9.58 million
BILL Holdings, Inc. (NYSE:BILL) stands as a leading provider of cloud-based software tailored for simplifying, digitizing, and automating complex back-office financial operations, particularly catering to small and medium businesses (SMBs). Its platform empowers users to streamline end-to-end financial workflows and facilitate payment processing.
In its second-quarter fiscal 2024 earnings report, BILL Holdings, Inc. (NYSE:BILL) exceeded analyst expectations, reporting earnings of $0.63 per share, marking a significant 50% increase year over year. Additionally, the company generated revenues of $318.5 million, representing a robust 22.5% growth compared to the previous year and comfortably surpassing the consensus estimate of $297 million. The revenue growth was primarily driven by a solid 19% year-over-year increase in BILL’s core revenues.
The shares of the company were owned by 49 hedge funds with a total value of $864.6 million, as of Q4 2023. Philippe Laffont’s Coatue Management was the largest shareholder among hedge funds, with ownership of 2 million shares valued at $163.2 million.
7. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Investors: 116
3G Capital’s Q4 2023 Investment Value: $9.68 million
Alibaba Group Holding Limited (NYSE:BABA) commands a significant presence in the Chinese e-commerce landscape, with its platform Alibaba.com ranking among the largest in the industry. In addition to its core e-commerce operations, Alibaba Group Holding Limited (NYSE:BABA) has diversified its investments into various sectors, including cloud computing, digital media, and entertainment.
During the fourth quarter of 2023, 116 hedge funds held stakes in Alibaba Group Holding Limited (NYSE:BABA), with combined positions valued at $3.587 billion. This represents an increase from the previous quarter, where 110 funds held positions totaling $3.36 billion. As of December 31, 2023, Appaloosa Management LP emerged as the top shareholder in the company, boasting a position valued at $337.168 million.
6. Pinduoduo Inc. (NASDAQ:PDD)
Number of Hedge Fund Investors: 71
3G Capital’s Q4 2023 Investment Value: $15.36 million
Pinduoduo Inc. (NASDAQ:PDD), headquartered in Shanghai, China, is a multinational commerce conglomerate with a diverse portfolio of businesses. The company has established an extensive network comprising sourcing, logistics, and fulfillment capabilities to bolster its underlying operations. Notably, its flagship platform operates as a mobile-only marketplace, facilitating connections between millions of agricultural producers and consumers throughout China.
As of March 21, analysts at Citigroup reaffirmed their Buy rating on Pinduoduo Inc. (NASDAQ:PDD) and maintained a price target of $185.
Pinduoduo Inc. (NASDAQ:PDD) was spotted in the portfolios of 71 hedge funds in the fourth quarter, with a total stake value of $83.3 billion. Brazilian investor Jorge Paulo Lemann’s hedge fund held a $15.36 million stake during the same quarter.
Baron Funds said this about Pinduoduo Inc. (NASDAQ:PDD) in its fourth-quarter 2023 investor letter:
“We added to our digitization theme by building a position in PDD Holdings Inc. (NASDAQ:PDD), a leading Chinese e-commerce platform. Founded in 2015, the company has emerged as China’s second largest e-commerce player, capturing approximately 20% market share. In our view, PDD’s competitive moat lies in its team purchase model that facilitates bulk buying through direct partnerships with manufacturers, thereby eliminating intermediaries (e.g., distributors and middlemen) and lowering costs. Key factors driving the company’s meteoric growth include rising consumer demand for affordable products in China amid an economic slowdown, small-scale merchants seeking alternatives to Alibaba, and superior management execution. PDD’s revenue growth outpaces gross merchandize value growth owing to rising take rates as merchants aggressively compete for consumer traffic on the platform. In our view, PDD should continue to gain market share given its dominance in the value-for-money segment, growing affordable branded product offerings, and high operational efficiency. We believe the company’s growth will be further supported by the recent launch of its international e-commerce platform, Temu, which has become one of the fastest growing apps globally. Leveraging China’s excess manufacturing capacity, Temu has strong negotiating power with domestic suppliers and attracts global consumers with competitively priced products. Temu’s recent initiatives to improve unit economics, coupled with achieving variable breakeven in the sizable U.S. market, showcase management’s skill and commitment to sustained growth. We expect PDD to at least double its earnings and free cash flow in the next three years, with the potential for continued compounding thereafter.”
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Analog Devices, Inc. (NASDAQ:ADI), and Meta Platforms Inc (NASDAQ:META), Pinduoduo Inc. (NASDAQ:PDD) is one of the top stocks in 3G Capital’s portfolio.
Click to continue reading and see Jorge Paulo Lemann’s Hedge Fund 3G Is Betting On These 5 Stocks.
Suggested Articles:
11 Best Beaten Down Dividend Stocks to Invest in Now
25 Biggest Food Companies in the World by Revenue
25 Largest Automotive Companies and Suppliers in the World
Disclosure: None. Jorge Paulo Lemann’s Hedge Fund 3G Is Betting On These Stocks is originally published on Insider Monkey.
