In this article, we discuss the 10 stocks to buy now in the Mark Cuban stock portfolio.
Mark Cuban, the famous angel investor, entrepreneur, and television personality, is perhaps most commonly associated with his appearances on a startup funding show called Shark Tank that airs on media house ABC in the US. However, it is no secret that Cuban has turned his incredibly risky investments from the show, and those in his portfolio, into a billion dollar business empire in the past few decades. According to a list of richest men in the US maintained by Forbes magazine, the present net worth of Cuban is close to $5 billion.
Mark Cuban first rose to fame in the finance world after selling his video portal Broadcast.com to Yahoo for $5.7 billion in 1999. Cuban had founded the company just two years prior to selling it, a feat that earned him legendary status on Wall Street. Since his first big score, Cuban has continued to invest in successful businesses, mostly funding startups with mission statements, and also bought NBA team Dallas Mavericks. Cuban has also become a finance guru during the time, accurately predicting the ebb and flow of the markets.
Earlier this year, Cuban explained that he was selling stocks in his portfolio due to concerns about overvaluation in several asset classes. In March 2022, interest rates hit 4% for the first time in three years. Just three months later, in June, the Wall Street Journal declared an official bear market, just as Cuban had predicted. Cuban has built an ardent fan-following over the past few years because of his television persona and an active presence on social media, especially on social networking platform Twitter that was recently bought by Elon Musk.
Our Methodology
It is important to clarify that the stocks listed below were picked from the public comments that Cuban has made on these firms. He has explicitly mentioned some of his private holdings during these public appearances while only alluding to others. However, based on a careful assessment of the comments, the stocks listed below largely align with his investment philosophy.
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10. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 17
GameStop Corp. (NYSE:GME) is a specialty retailer that provides games and entertainment products through its e-commerce properties and various stores in the United States, Canada, Australia, and Europe. On September 7, GameStop Cop reported that revenue for the second quarter fell 4.0% to $1.14 billion. Hardware and accessories sales accounted for 52.5% of total sales vs 51.5% a year ago, where software sales fell to 27.9% from 33.5% last year. In February last year, Cuban said that WallStreetBets, one of the most influential platforms on Reddit, was changing how the market functioned, advising users on the platform to hold onto GameStop Corp. shares to benefit the firm in the long term.
On October 13, Jefferies analyst Andrew Uerkwitz took over coverage of GameStop Corp. stock with a Hold rating and $26 price target, noting that the Interactive Entertainment Team took over lead coverage of Toys & Entertainment Products as a step towards the industry’s evolution.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. with 2 million shares worth more than $252 million.
In its Q2 2022 investor letter, Bireme Capital, an asset management firm, highlighted a few stocks and GameStop Corp. was one of them. Here is what the fund said:
“Amazingly, GameStop Corp. is one of our only short positions to not fall in 2022. The stock trades at an $11.5b market cap, exceeding its pre-pandemic peak by billions of dollars. This is even though revenue is down 30% from the peak, gross margins are down 1500 bps, and the company has generated a negative free cash outflow of $700m in the last four quarters (we had to double-check that number because it is so high).
Wall Street has consistently revised downward their estimates of Gamestop’s profitability, making its stock price stability in 2022 even more perplexing. Analysts currently estimate an EBITDA loss of around $400m, markedly worse than their estimates as of 2/3/22 of a loss of $60m. Their recently launched NFT marketplace will do nothing to fix their core business and comes about a year too late to be relevant in the NFT space. Instead, we see this as another example of a meme stock company hoping it can ape its way into a new business model, utilizing the popularity of the stock to drive new lines of business. We are not optimistic and think the $11.5b market cap drastically overestimates the capability of Gamestop to pivot into something more profitable. We find it unlikely that Gamestop books a GAAP profit ever again.”
9. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 17
BlackBerry Limited (NYSE:BB) provides intelligent security software and services to enterprises and governments worldwide. On November 16, BlackBerry revealed that it is expanding its global footprint of BlackBerry SecuSUITE partners in Asia Pacific to offer its anti-eavesdropping technology to protect real-time communications across the region. Cuban had admitted recently that his son was trading in BlackBerry Limited stock after gathering information about the stock market from social media platforms like TikTok and Reddit, noting that these platforms were helping young people trade better.
On September 28, Canaccord analyst T. Michael Walkley maintained a Hold rating on BlackBerry Limited stock and lowered the price target to $5 from $6, noting that management has created a cogent long-term strategy and several parts of the business are turning the corner toward improving growth trends.
Among the hedge funds being tracked by Insider Monkey, Toronto-based firm Fairfax Financial Holdings is a leading shareholder in BlackBerry Limited with 46.7 million shares worth more than $251.9 million.
8. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 18
AMC Entertainment Holdings, Inc. (NYSE:AMC) engages in the theatrical exhibition business. On September 30, AMC Entertainment Holdings reported results for the third quarter that ended September 30, 2022. Total revenues grew to $968.4 million compared to $763.2 million for the third quarter of 2021. Cuban says his son also invested in the company as the firm has had a new lease of life, investing in several new endeavors designed to bring back cinema audiences.
On October 12, B. Riley analyst Eric Wold maintained a Neutral rating on AMC Entertainment Holdings, Inc. stock and lowered the price target to $7.50 from $11, noting the continued uncertainties around film slate timing and production delays.
At the end of the third quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $120.6 million in AMC Entertainment Holdings, Inc., compared to 16 in the preceding quarter worth $407 million.
7. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 25
Robinhood Markets, Inc. (NASDAQ:HOOD) operates a financial services platform in the United States. On 29 November, BlockFi, the cryptocurrency lender that filed for bankruptcy protection, also sued FTX founder Sam Bankman-Fried’s company, Emergent Fidelity Technologies, to recoup shares in Robinhood Markets. Cuban has publicly admitted that he owns Dogecoin, a cryptocurrency that started out as a joke but has since ballooned to billions in value. Dogecoin made up a large part of crypto revenue for Robinhood Markets, Inc..
On November 15, Deutsche Bank analyst Brian Bedell maintained a Hold rating on Robinhood Markets, Inc. stock and lowered the price target to $9 from $11, noting that the estimates and price targets were revised in the fourth quarter for the brokers, asset managers and exchanges.
At the end of the third quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $616 million in Robinhood Markets, Inc., compared to 19 in the previous quarter worth $947 billion.
In its Q4 2021 investor letter, Claret Asset Management, an asset management firm, highlighted a few stocks and Robinhood Markets, Inc. was one of them. Here is what the fund said:
“Robinhood Markets, Inc. went public at $38 a share at the end of July of this year. After a one-day decline of 8%, it proceeded to rise to a peak of $85 in a matter of 4 days before settling down around $40 in September. Then, we found out that the company does not appear to understand the margin rules that apply to their client’s trades… and got fined by the Securities Exchange Commission. As of today, it is trading below $20, at 57 times earnings, approximately half of its IPO price. Caveat emptor… Buyer beware.”
6. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 29
Coinbase Global, Inc. (NASDAQ:COIN) provides financial infrastructure and technology for the crypto economy. On November 29, Coinbase Global management announced that its wallet service is set to delist cryptocurrencies Bitcoin Cash, Ethereum Classic, Stellar and Ripple, citing their low usage, according to the crypto exchange’s website. Cuban, according to his own admission, has a Bitcoin-heavy crypto portfolio, with the currency making up 60% of his total crypto holdings. Bitcoin is the most-traded currency on Coinbase.
On November 22, Needham analyst John Todaro maintained a Buy rating on Coinbase Global, Inc. stock and lowered the price target to $73 from $89, highlighting that increased uncertainty and risks associated with the fall-out from FTX make the next several weeks a critical time for the crypto space.
At the end of the third quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Coinbase Global, Inc., compared to 46 in the preceding quarter worth $2.3 billion.
In its Q2 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. was one of them. Here is what the fund said:
“Coinbase Global Inc. Ordinary Shares (NASDAQ:COIN) fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto, not only supporting trading and cold storage, but also moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they can successfully execute their platform strategy.”
5. Fidelity National Financial, Inc. (NYSE:FNF)
Number of Hedge Fund Holders: 36
Fidelity National Financial, Inc. (NYSE:FNF) provides technology solutions for merchants, banks, and capital markets firms worldwide. On November 18, Fidelity National Financial reported that it has agreed to acquire TitlePoint, a part of Black Knight’s data and analytics division, for $225 million in cash. On November 3, Fidelity National Financial declared a $0.45 per share quarterly dividend. Cuban has advised large banks to mainstream crypto, like Fidelity Financial, as he believes this will help smoothen crypto prices in the long term.
On November 29, Truist analyst Mark Hughes maintained a Buy rating on Fidelity National Financial, Inc. stock and lowered the price target to $56 from $60, highlighting that the company will be the main beneficiary of firming prices, both residential and commercial.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Brave Warrior Capital is a leading shareholder in Fidelity National Financial, Inc. with 9.1 million shares worth more than $337 million.
In its Q3 2022 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and Fidelity National Financial, Inc. was one of them. Here is what the fund said:
“Fidelity National Financial, Inc. (2.4% of Fund Assets), which is planning to distribute a 15% stake in its wholly-owned life-insurance subsidiary (F&G Annuities & Life) having now established the segment at a significant scale with approximately $40 billion of assets under management. This transaction will leave the FNF Group with a listed proxy for the value of its retained 85% stake in F&G, as well as a “net cash” balance sheet and market-leading position in US title insurance (and other transaction-related activity) through its wholly-owned Fidelity National Financial subsidiary.”
4. Live Nation Entertainment, Inc. (NYSE:LYV)
Number of Hedge Fund Holders: 40
Live Nation Entertainment, Inc. (NYSE:LYV) operates as a live entertainment company. Cuban bought Live Nation Entertainment, Inc. stock when the market was at an all-time low in March 2020, scooping up shares at a bargain.
On November 28, investment advisory Citi upgraded Live Nation Entertainment, Inc. stock to Buy from Neutral with a price target of $82, down from $90. Analyst Jason Bazinet issued the ratings update.
At the end of the third quarter of 2022, 40 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Live Nation Entertainment, Inc., compared to 51 in the preceding quarter worth $2.1 billion.
In its Q2 2022 investor letter, Carillon Tower Advisors, an asset management firm, highlighted a few stocks and Live Nation Entertainment, Inc. was one of them. Here is what the fund said:
“Live Nation Entertainment, Inc. fell as economic worries gathered during the quarter and as a new wave of the pandemic gained steam. As this company also promotes concerts and shows in Europe and Latin America, economic worries in these regions may have weighed on sentiment. We are encouraged by very strong pent-up demand potential for concerts and shows following the pandemic.”
3. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 95
Netflix, Inc. (NASDAQ:NFLX) provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. Cuban has come out in the media and outlined his bullish stance on Netflix, Inc.. In an interview to news platform CNBC, Cuban said the trends in the streaming industry favored the firm more than competitors over the long-term.
On November 15, BofA analyst Jessica Reif Ehrlich reinstated coverage of Netflix, Inc. stock with a Buy rating and $370 price target, noting that the company’s leading position within the still burgeoning shift towards non-linear video viewing, a strong runway for subscriber growth outside the US and upside from advertising video on demand.
Among the hedge funds being tracked by Insider Monkey, Camas, Washington-based investment firm Fisher Asset Management is a leading shareholder in Netflix, Inc. with 6.6 million shares worth more than $1.2 billion.
In its Q3 2022 investor letter, Ensemble Capital Management, an asset management firm, highlighted a few stocks and Netflix, Inc. was one of them. Here is what the fund said:
“Netflix, Inc. (+34.6%): After a punishing first half of the year when bearish investors came to believe that Netflix’s growth days were done for good, the company reported fewer subscriber losses than expected in the second quarter and guided for a return to at least modest subscriber growth in the third quarter. In addition, as more information about the company’s planned advertising-supported subscription tier has become available, investors began to express growing confidence in this tool to revitalize growth in 2023.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 156
Alphabet Inc. (NASDAQ:GOOG) provides various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. On November 22, Google reported that Apple and Google came under additional scrutiny from worldwide regulators on Tuesday as the UK’s Competition and Markets Authority launched a probe into the tech giant’s effective duopoly on mobile browsers and cloud gaming. Cuban is bullish on AI and has lauded the efforts of Alphabet for heavy investment in the space.
On November 15, Morgan Stanley analyst Brian Nowak maintained an Overweight rating on Alphabet Inc. stock and lowered the price target to $120 from $125, highlighting that the company missed third-quarter ad revenue expectations and/or guided to slower than expected forward growth.
At the end of the third quarter of 2022, 156 hedge funds in the database of Insider Monkey held stakes worth $19.3 billion in Alphabet Inc., compared to 153 in the preceding quarter worth $22.3 billion.
In its Q3 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Alphabet Inc. was one of them. Here is what the fund said:
“In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?
“Google it!”
This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.
Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to something. Second, the reason Biden’s advice was met with such opprobrium was that Googling something has become almost second nature to us now.
These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Alphabet Inc. has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking the information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects (read more)
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products and subscriptions in North America and internationally. On November 29, Amazon unveiled several updates at its annual AWS re: Invent cloud computing conference, including new data and security services, new AWS-designed chips and more. Cuban started buying the stock in 2019 when it was trading at around half the price it is at presently. Cuban said he bought $1 billion in the stock during the time. The bet appears to have paid off handsomely.
On November 22, Piper Sandler analyst Thomas Champion maintained an Overweight rating on Amazon.com, Inc. stock and lowered the price target to $119 from $125, highlighting the company’s third-quarter results with a focus on Web Services.
At the end of the third quarter of 2022, 252 hedge funds in the database of Insider Monkey held stakes worth $30 billion in Amazon.com, Inc., compared to 271 in the preceding quarter worth $48 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Amazon.com, Inc. was one of them. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services, provider. Shares of Amazon declined 35% in the quarter due to weaker-than-expected profits resulting from the overcapacity of resources coming out of COVID. We expect Amazon to grow its retail capacity in the quarters to come, which would enable it to improve profitability accordingly. Amazon remains one of our largest holdings due to its durable competitive advantages with a leading position in multiple trillion-dollar markets with a long runway for growth (…read more)
You can also take a peek at 11 Best Micro-cap Dividend Stocks To Buy and 15 Best E-Commerce Stocks To Buy.
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This article is originally published at Insider Monkey.
