In this article, we discuss the top 10 stock picks of Mitch Rubin’s RiverPark Advisors.
Mitch Rubin is the founding partner and chief investment officer at RiverPark Advisors, which is a New York-based investment advisory firm dealing in mutual funds, separate accounts, private equities, fixed income funds, and venture capital. As of the 13F filings at the end of June this year, Mitch Rubin manages a portfolio worth $783.98 million, as well as assets under management totaling $1.68 billion.
Mitch Rubin completed his Bachelor’s in economics and political science in 1988, from the University of Michigan. In 1991, Rubin received a JD from Harvard Law School, after which he began his career as an associate at Latham & Watkins, a New York-based law firm, where he was involved in corporate finance transactions. In 1994, Mitch joined Smith Barney as an equity research analyst for emerging growth stocks. He switched to Baron Capital in 1995, where he worked across several funds as a successful portfolio manager until 2006, when he left Baron Capital to start his own investment firm.
Currently, Rubin is responsible for the equities research at RiverPark Advisors in his capacity as co-founder and chief investment officer, and is the portfolio manager for the RiverPark Long/Short Opportunity Fund and the RiverPark Large Growth Fund. Rubin’s 13F portfolio is concentrated in stocks from the utilities and telecommunications, finance, information technology, healthcare, consumer discretionary, and communications sectors. Rubin’s largest holding is Blackstone Inc. (NYSE:BX), representing 3.95% of his investment portfolio at the end of June.
The most notable stocks in Mitch Rubin’s RiverPark Advisors’ Q2 portfolio include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN), among others discussed in detail below.
Our Methodology
With this context in mind, let’s discuss the top 10 stock picks of Mitch Rubin’s RiverPark Advisors.
We picked these stocks from the Q2 portfolio of RiverPark Advisors.
Why should we pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Mitch Rubin’s RiverPark Advisors Portfolio: Top Stock Picks
10. PayPal Holdings, Inc. (NASDAQ:PYPL)
RiverPark Advisors’ Stake Value: $20,830,000
Percentage of RiverPark Advisors’ 13F Portfolio: 2.65%
Number of Hedge Fund Holders: 143
PayPal Holdings, Inc. (NASDAQ:PYPL) is an American financial technology corporation that enables the digital transfer of funds, and its business model consists of charging a transaction fee when payments are processed for vendors, auction sites, and commercial users. PayPal Holdings, Inc. is a top stock in Mitch Rubin’s Q2 portfolio, with Rubin owning 71,461 shares in PayPal Holdings, Inc. as of the end of June, via RiverPark Advisors. With a stake value of $20.83 million, PayPal Holdings, Inc. represents 2.65% of RiverPark Advisors’ investment portfolio.
As of the second quarter, 143 hedge funds tracked by Insider Monkey were bullish on PayPal Holdings, Inc., with stakes worth $16.35 billion.
PayPal Holdings, Inc., on November 8, posted its Q3 results. EPS for the period totaled $1.11, beating estimates by $0.03. Revenue for the quarter came in at $6.18, missing target revenue by -$51.91 million.
Truist analyst Andrew Jeffrey kept a Hold rating on PayPal Holdings, Inc. as of November 10, following the Q3 performance and below-consensus guidance. He also lowered the price target from $275 to $200 on PayPal Holdings, Inc..
In addition to Microsoft Corporation, Meta Platforms, Inc., Apple Inc., and Amazon.com, Inc., PayPal Holdings, Inc. is a top stock pick of Mitch Rubin as of June this year.
Here is what Alger has to say about PayPal Holdings Inc. in its Q3 2021 investor letter:
“PayPal Holdings, Inc. was among top detractors from performance. PayPal is a pure play on e-commerce and electronic payments which is driving the company’s high unit volume growth. As a digital payments company, it is helping to facilitate the shift to a cashless society. The coronavirus pandemic has significantly accelerated the adoption of e-commerce and the utilization of digital payments platforms. In our view, PayPal is currently positioned to benefit from the strength in e-commerce trends, including increasing net new active users and increased engagement per user. PayPal also has launched a service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account. PayPal’s vision is to become a Super App that integrates payments, commerce and financial services, as well as crypto capabilities. After outperforming earlier in the year, the performance of PayPal shares weakened in the third quarter with the company facing potentially higher transaction expenses and credit losses. The higher transaction expenses are driven by a shift by consumers to the higher cost travel and entertainment categories which skew toward less profitable credit transactions.”
9. Meta Platforms, Inc. (NASDAQ:FB)
RiverPark Advisors’ Stake Value: $21,746,000
Percentage of RiverPark Advisors’ 13F Portfolio: 2.77%
Number of Hedge Fund Holders: 266
Meta Platforms, Inc. is the parent organization of Facebook, Instagram, and WhatsApp, founded by Mark Zuckerberg in 2004.
According to Mark Gurman from Bloomberg, as of October 28, Meta Platforms, Inc. is working on smartwatches, which will be equipped with a front camera and would compete directly with Apple Inc. watches.
Piper Sandler analyst Thomas Champion kept a Neutral rating on Meta Platforms, Inc. as of October 28, with a $385 price target, following the significant rebranding of the tech corporation.
At the end of June, 266 hedge funds out of the 873 elite funds monitored by Insider Monkey reported owning stakes in Meta Platforms, Inc., up from 257 in Q1.
Here is what Polen Capital has to say about Meta Platforms, Inc. in its Q3 2021 investor letter:
“Facebook’s stock was pressured on concerns about regulation in the quarter. We are constantly monitoring the potential regulatory risks to Facebook (and all of our holdings). At this point, we see very little chance that regulation changes Facebook’s business model in a meaningful and adverse way. Regarding the recent data shared by a former Facebook employee and the company itself on some of the unfortunate negative consequences of social media, we recognize these types of issues will inevitably linger in different forms and fashions well into the future. We have been focused on the ability of Facebook to identify and mitigate these negative consequences while amplifying the value users typically cite for its apps across a long list of use cases. We continuously monitor the vibrance of the user base on Facebook’s apps to confirm that value.”
8. Pinterest, Inc. (NYSE:PINS)
RiverPark Advisors’ Stake Value: $22,959,000
Percentage of RiverPark Advisors’ 13F Portfolio: 2.92%
Number of Hedge Fund Holders: 63
Pinterest, Inc. (NYSE:PINS), a top stock in Mitch Rubin’s Q2 portfolio, is an image sharing platform, where users can create mood boards from images, videos, and animated GIFs shared across the platform to get ideas, inspiration, and exchange information. RiverPark Advisors owns 290,809 shares in Pinterest, Inc., worth $22.95 million, representing 2.92% of the firm’s Q2 portfolio.
The Q3 EPS for Pinterest, Inc., on November 4, came in at $0.28, beating estimated EPS by $0.05. Revenue for the quarter totaled $632.93 million, exceeding estimates by $1.83 million.
MKM Partners analyst Rohit Kulkarni kept a Buy rating on Pinterest, Inc. on November 8, but lowered the price target from $74 to $60, owing to the Q3 results and lower user traffic.
As of June this year, 63 hedge funds in the database of Insider Monkey’s elite funds were long Pinterest, Inc., down from 83 in the preceding quarter.
Here is what Carillon Tower Advisers has to say about Pinterest, Inc. in its Q3 2021 investor letter:
“Pinterest operates a pinboard-style social media website that enables users to create theme-based image collections for events, hobbies, and other personal interests. Despite a quarterly report that displayed solid revenue and profitability versus expectations, the stock was pressured as user engagement metrics decreased as the world reopened post-pandemic. We believe the company can continue to drive growth in the face of this headwind by increasing the number of advertisers, adding engaging video content, and ramping ecommerce capabilities.”
7. Zoetis Inc. (NYSE:ZTS)
RiverPark Advisors’ Stake Value: $23,042,000
Percentage of RiverPark Advisors’ 13F Portfolio: 2.93%
Number of Hedge Fund Holders: 58
Zoetis Inc. (NYSE:ZTS) is one of Rubin’s top stock picks, as of June 2021, with RiverPark Advisors’ holding stakes worth over $23 million in Zoetis Inc., which represents 2.93% of the firm’s investment portfolio. Zoetis Inc. is the leading global manufacturer of drugs and vaccines for pets and livestock, which was previously a subsidiary of Pfizer Inc. (NYSE:PFE), until it became an independent company in 2012.
As of the end of June, 58 hedge funds in Insider Monkey’s database of elite were bullish on Zoetis Inc., with stakes valued over $2.70 billion.
Balaji Prasad, a Barclays analyst, on November 5 kept an Overweight rating on the stock, raising the price target from $235 to $240. He believes that the Q3 earnings beat will sustain the stock valuations, resultantly raising the 2021 guidance.
Like Microsoft Corporation, Meta Platforms, Inc., Apple Inc., and Amazon.com, Inc., Zoetis Inc. is a notable stock in Mitch Rubin’s Q2 portfolio.
Here is what Polen Capital has to say about Zoetis Inc. in its Q2 2021 investor letter:
“As is usually the case, Portfolio turnover was modest during the quarter. We trimmed Zoetis. The Zoetis trim is simply an acknowledgement of the company’s current valuation, which we assess is elevated.”
6. KKR & Co. Inc. (NYSE:KKR)
RiverPark Advisors’ Stake Value: $24,563,000
Percentage of RiverPark Advisors’ 13F Portfolio: 3.13%
Number of Hedge Fund Holders: 54
RiverPark Advisors holds 414,630 shares in KKR & Co. Inc., as of June this year, worth $24.56 million, representing 3.13% of the firm’s investment portfolio. KKR & Co. Inc. is an American global investment company dealing in several asset classes including private equity, real estate, hedge funds, and credit. KKR & Co. Inc. is also known for investing in the infrastructure and energy sectors.
KKR & Co. Inc., on November 2, reported that the Q3 EPS came in at $1.05, beating estimates by $0.10. Revenue for the period totaled $818.58 million, exceeding estimates by $108.92 million.
Argus analyst Stephen Biggar kept a Buy rating on KKR & Co. Inc. on November 4, raising the price target from $72 to $94, citing strong fundamentals and Q3 earnings beat.
As of June this year, 54 hedge funds in Insider Monkey’s database were long KKR & Co. Inc., down from 56 in the previous quarter.
Here is what Greenhaven Road Capital has to say about KKR & Co. Inc. in its Q3 2021 investor letter:
“KKR (KKR) – This remains an extremely resilient business with an A+ team enjoying the secular tailwinds of the migration of investable dollars toward alternative assets, where large allocators like the returns and love the muted volatility.”
5. Snap Inc. (NYSE:SNAP)
RiverPark Advisors’ Stake Value: $25,691,000
Percentage of RiverPark Advisors’ 13F Portfolio: 3.27%
Number of Hedge Fund Holders: 64
Snap Inc. (NYSE:SNAP) is a California-based social media and camera company, founded in 2011. The flagship products of Snap Inc. include Snapchat, Spectacles, and Bitmoji. As of Q3 2021, Snapchat has a daily worldwide user traffic of 306 million. RiverPark Advisors holds 377,028 shares in Snap Inc. as of June this year, valued at $25.6 million, representing 3.27% of the firm’s investment portfolio.
As of the second quarter of 2021, 64 funds from the elite database of 873 hedge funds maintained by Insider Monkey were long Snap Inc., down from 73 in the preceding quarter.
On October 21, Snap Inc. posted a Q3 EPS of $0.17, beating estimates by $0.09. Revenue for the quarter totaled $1.07 billion, missing estimates by -$31.97 million. Citi analyst, Jason Bazinet, on November 1, upgraded Snap Inc. from Sell to Neutral, following the Q3 results, with a price target of $53, down from $67.
Here is what RiverPark Funds has to say about Snap Inc. in its Q2 2021 investor letter:
“Snap shares were a top contributor for the quarter as well, also driven by strong first quarter results. The company reported accelerating revenue growth of 66% for the period (up from 62% fourth quarter growth), driven by user growth of 22%, and a 36% expansion in average revenue per user (ARPU). The company also guided to stronger-than-expected and accelerating 81%-85% revenue growth for second quarter 2021. Adjusted EBITDA improved by $79 million year over year for a break-even margin, up 1,800 basis points, and free cash flow improved dramatically, turning positive for the period to $126 million. Snap also continued to roll-out products that should help drive further expansion in user growth and ARPU, including Spotlight, a TikTok-like experience, with more than 125 million Snapchatters using it during March, and original programming starring Ryan Reynolds.
With TTM of $2.8 billion in revenue and an ARPU that is about 1/2 that of Twitter and 1/3 that of Facebook, we believe Snap has a long runway for both revenue growth and expanded profitability as it improves its platform functionality, grows its audience, and continues to advance its monetization.”
4. Apple Inc. (NASDAQ:AAPL)
RiverPark Advisors’ Stake Value: $26,466,000
Percentage of RiverPark Advisors’ 13F Portfolio: 3.37%
Number of Hedge Fund Holders: 138
Apple Inc. is one of the Big Five US tech firms, and also a top stock of Mitch Rubin’s Q2 portfolio. RiverPark Advisors, as of the second quarter, owns 193,239 shares in Apple Inc., worth $26.46 million, representing 3.37% of the firm’s stock portfolio. In addition to the signature Apple Inc. products like iPhones, iPads, MacBooks, and Apple Watches, Apple Inc. is reportedly working on electric vehicles which will be launched by 2025, if the growing patents are any indication of Apple Inc. entering the automobile industry.
As of June, 138 hedge funds observed by Insider Monkey were long Apple Inc., up from 127 in the first quarter.
Apple Inc.’s Q3 EPS, as of October 28, was reported as $1.24, meeting analysts’ consensus estimates. Revenue for the quarter equaled $83.36 billion, missing estimates by -$1.62 billion.
Richard Kramer, an Arete analyst, on November 9, kept a Buy rating on Apple Inc., raising the price target from $168 to $180. Apple Inc. is positioned to avoid the chip shortages that are currently prevalent in the industry, according to Kramer, who raised his 2022 fiscal estimates for Apple Inc. products above the consensus estimates.
Here is what ClearBridge Investments has to say about Apple Inc. in its Q1 2021 investor letter:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
RiverPark Advisors’ Stake Value: $28,908,000
Percentage of RiverPark Advisors’ 13F Portfolio: 271
Number of Hedge Fund Holders: 3.68%
Amazon.com, Inc. is another top stock pick of RiverPark Advisors, with the investment firm owning 8,403 shares in the US tech giant, worth $28.9 million, representing 3.68% of the firm’s investment portfolio as of June this year. Amazon.com, Inc. is a force to be reckoned with in the ecommerce, cloud computing, online streaming, and artificial intelligence sectors.
Amazon.com, Inc. announced Q3 earnings, and EPS for the quarter came in at $6.12, missing estimates by -$2.78. Revenue for the quarter was valued at $110.81 billion, missing estimates by -$784.89 million.
Tigress Financial analyst Ivan Feinseth raised the price target on Amazon.com, Inc. from $4,370 to $4,460, keeping a Buy rating on the stock. He believes that Amazon.com, Inc. can tackle the supply chain hindrances and benefit from the overwhelming 2021 holiday season, and achieve strong sales in 2022 as well.
As of the second quarter of 2021, 271 hedge funds tracked by Insider Monkey reported owning stakes in Amazon.com, Inc., up from 243 in the preceding quarter.
Here is what Polen Capital has to say about Amazon.com, Inc. in its Q3 2021 investor letter:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
2. Microsoft Corporation (NASDAQ:MSFT)
RiverPark Advisors’ Stake Value: $28,960,000
Percentage of RiverPark Advisors’ 13F Portfolio: 3.69%
Number of Hedge Fund Holders: 238
Billionaire Bill Gates’ Microsoft Corporation is a top stock pick of Mitch Rubin, who owns 106,904 shares in the tech conglomerate, via RiverPark Advisors as of June this year, worth $28.96 million. Microsoft Corporation represents 3.69% of Rubin’s stock portfolio for the second quarter. Microsoft Corporation is a top US tech firm, whose products such as Microsoft Office, Microsoft Windows, and Internet Explorer, as well as consumer electronics and personal computers are used worldwide.
As of the second quarter of 2021, 238 hedge funds out of the 873 elite funds monitored by Insider Monkey were bullish on Microsoft Corporation, down from 251 in the previous quarter.
On October 26, the Q3 EPS for Microsoft Corporation came in at $2.27, surpassing analysts’ consensus estimates by $0.19. Revenue for the quarter totaled $45.32 billion, exceeding estimates by $1.33 billion.
Brad Zelnick from Deutsche Bank kept a Buy rating on Microsoft Corporation, with a $390 price target. He believes that Microsoft Corporation is a solid software stock, and is positioned to benefit from the public cloud market, which will be valued at $127 billion in 2021.
Here is what Alger has to say about Microsoft Corporation in its Q3 2021 investor letter:
“Microsoft Corporation was among the top contributors to performance during the third quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 51% in the second quarter. This high unit volume growth is a primary driver of the company’s higher share price, but the company’s strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
1. Blackstone Inc. (NYSE:BX)
RiverPark Advisors’ Stake Value: $30,968,000
Percentage of RiverPark Advisors’ 13F Portfolio: 3.95%
Number of Hedge Fund Holders: 54
Blackstone Inc. is the largest holding in Mitch Rubin’s investment portfolio as of June this year. Rubin, via RiverPark Advisors, owns 318,795 shares in Blackstone Inc., worth $30.96 million, representing 3.95% of the firm’s Q2 portfolio. Blackstone Inc. is an alternative investment management company specializing in private equity, real estate, and mergers and acquisitions.
As of the second quarter, 54 hedge funds in Insider Monkey’s exclusive database were bullish on Blackstone Inc., up from 49 in the previous quarter.
On October 21, Blackstone Inc. reported earnings for Q3. EPS for the quarter equaled $1.28, beating estimated EPS by $0.36. The Q3 revenue came in at $3.04 billion, surpassing revenue estimates by $872.27 million.
BofA analyst Craig Siegenthaler, on November 4, reinstated coverage of Blackstone Inc. with a Buy rating and a $182 price target, indicating a total return potential of 30% to 35%. By expanding in the retail channel, Blackstone Inc. can achieve exceptional earnings growth, according to the analyst.
Here is what Artisan Partners has to say about Blackstone Inc. in its Q2 2021 investor letter:
“Top contributors included The Blackstone Group. Investment stalwart Blackstone Group’s virtuous cycle is in full swing. Throughout Blackstone’s history, excellent investment performance and capital protection have allowed the firm to increase fundraising in existing verticals as well as launch new endeavors. Historically, less than 10% of assets under management matures in any given year, and that number should move lower with continued growth in perpetual capital vehicles. Blackstone’s A+ rated balance sheet and capital-light model are the backbone of its 85% of cash flow distribution policy via a variable quarterly dividend.”
You can also take a look at 10 Stocks Making Noise After Releasing Their Earnings Reports and 10 Most Shorted Stocks Hedge Funds Are Buying.
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originally published by Insider Monkey.
