The 10 Stocks That Account for 90.88% of Varenne Capital’s 13F Portfolio

Published August 11, 2022 at 11:00 am EDT Updated September 7, 2026 at 2:20 pm EDT

In this article we present the list of 10 Stocks That Account for 90.88% of Varenne Capital’s 13F Portfolio.

Guiseppe Perrone and Marco Sormani’s Varenne Capital Partners is a Paris, France-based investment firm that was co-founded by Perrone, Sormani, and David Mellul in 2003. The firm prides itself on conducting extensive in-house proprietary research and developing its own methodologies to fuel its investment decisions.

Perrone, the firm’s President and Managing Partner, earned degrees from Bocconi University in Milan and HEC in Paris. He served as a Senior Strategy and Finance Consultant at Corporate Value Associates before co-founding Varenne. Sormani followed a similar path, graduating summa cum laude from Bocconi University and HEC. He’s also an alumnus of NYU’s Stern School of Business. Sormani also spent time at Corporate Value Associates as a Senior Manager, in addition to serving as an auditor at KPMG.

Varenne Capital is coming off one of its most impressive years yet, as its flagship Value Active Fund returned 38.2% in 2021. That performance pushed the fund’s annualized returns since its October 1, 2007 inception to a solid 14.4%. Investors are certainly taking notice of the fund’s success, as its net inflows topped $1 billion last year, pushing assets under management to $4.3 billion at the end of 2021.

Heading into the second-half of 2022, the firm’s 13F portfolio contained just 12 long positions, five of which were added to it during the second quarter, replacing five former positions that were cast off, including a large position in Applied Materials, Inc. (NASDAQ:AMAT). The fund’s 13F exposure to tech stocks was cut in half as a result of that sale, with consumer discretionary and communications stocks accounting for 85% of its 13F assets. Alphabet Inc. (NASDAQ:GOOG), NIKE, Inc. (NYSE:NKE), and Dollar General Corporation (NYSE:DG) take up prominent positions in the highly concentrated portfolio of Varenne Capital Partners.

In this article we’ll take a look at Varenne’s ten largest positions, which account for nearly 91% of its 13F portfolio assets.

Photo by Firmbee.com on Unsplash

Our Methodology

The following data is gathered from Varenne Capital Partners’ latest 13F filing with the SEC. We follow hedge funds like Varenne Capital Partners because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.

All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2022 reporting period.

The 10 Stocks That Account for 90.88% of Varenne Capital’s 13F Portfolio

10. Meritor Inc (NYSE:MTOR)

Value of Varenne Capital Partners‘ 13F Position: $3.26 million

Number of Hedge Fund Shareholders: 28

Alphabet Inc., NIKE, Inc., and Dollar General Corporation take up some of the most prominent positions in the 13F portfolio of Varenne Capital Partners. Taking up a smaller but still noteworthy 0.9% stake in its 13F portfolio is Meritor Inc (NYSE:MTOR). Varenne cranked up the size of its MTOR holding by 283% during Q2 to 89,637 shares. There was a 47% jump in hedge fund ownership of Meritor during the first quarter.

The increased hedge fund ownership of Meritor Inc isn’t surprising, as the company is set to be acquired by Cummins in a $3.7 billion deal that was announced in February. The maker of vehicle and industrial components was an attractive acquisition target for Cummins, enhancing its diesel engine operations. Meritor is set to be replaced in the S&P SmallCap 600 by AdaptHealth Corp. (NASDAQ:AHCO).

Interestingly, Meritor Inc also has an acquisition of its own in the works, as it’s paying 190 million euros to buy Siemens’ commercial vehicles business. The deal has been approved by Cummins as part of its own purchase of Meritor.

9. PNM Resources, Inc. (NYSE:PNM)

Value of Varenne Capital Partners‘ 13F Position: $4.60 million

Number of Hedge Fund Shareholders: 37

Varenne cut the size of its PNM Resources, Inc. (NYSE:PNM) stake by 37% during Q2 to 96,235 shares, which still gave its 13F portfolio 1.27% exposure to the stock. Hedge fund ownership of PNM has jumped by 37% over the past two quarters. Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital built a large stake in PNM Resources during Q1, buying 1.29 million shares to give its 13F portfolio 5.54% exposure to the company.

PNM Resources, Inc. is a holding company that provides electricity primarily to residents of New Mexico through its two subsidiaries. As with Meritor, the holding company is also set to be acquired, in this case by Avangrid, Inc. (NYSE:AGR). The completion of that deal is proving more challenging than Meritor’s, as it was recently rejected by the New Mexico Public Regulation Commission

Mizuho analyst Paul Fremont remains confident that the PMN Resources, Inc. deal will eventually go through and has a ‘Buy’ rating and $52 price target on the stock. Should the deal go through by May 2023 at the $50.30 contract price, Fremont notes that investors would achieve annualized returns of 18% on the deal.

8. Welbilt, Inc. (NYSE:WBT)

Value of Varenne Capital Partners‘ 13F Position: $4.77 million

Number of Hedge Fund Shareholders: 31

Varenne’s stake in Welbilt, Inc. (NYSE:WBT) was left unchanged during Q2, coming in at 200,407 shares, which accounted for a 1.32% stake in its 13F portfolio. Hedge fund ownership of WBT has declined for three straight quarters, sliding by 30% during that time. Carl Icahn’s Icahn Capital is the largest Welbilt shareholder among the funds in our database, owning 11.2 million shares.

Welbilt, Inc. shareholders resoundingly approved the company’s planned merger with Ali Group, a deal that has also come under some scrutiny from U.S lawmakers. To allay the Justice Department’s concerns regarding the merger, Welbilt is set to sell its Manitowoc Ice business to Pentair plc (NYSE:PNR) for $1.6 billion.

Turtle Creek Asset Management had this to say about Welbilt, Inc. in its Q1 2022 investor letter:

“The final example is Welbilt Inc. (NYSE:WBT), a company we had followed for years, but only added to our portfolio in mid-2020. As with many companies, its share price declined significantly in the March 2020 COVID Crash, falling by more than two-thirds. But whereas the share prices of many of the companies we owned quickly rebounded, Welbilt’s share price was still at a low point months later. By July of 2020, the stock was relatively attractive, so we added it to both TCEF and Turtle Creek United States Equity Fund at around $6.50 per share.⁵ During the last quarter of 2020, the share price rose into the low teens, during which time we trimmed the position by half…” (Click here to see the full text)

7. LHC Group, Inc. (NASDAQ:LHCG)

Value of Varenne Capital Partners‘ 13F Position: $5.29 million

Number of Hedge Fund Shareholders: 26

Varenne Capital built a new stake in LHC Group, Inc. (NASDAQ:LHCG) during Q2, buying 33,988 shares, which accounted for a 1.46% stake of its 13F portfolio. Several hedge funds have taken notice of LHC Group in recent quarters, as the company hit an all-time high in Q1 in terms of number of funds long its shares. John Orrico’s Water Island Capital and Ian Simms’ Impax Asset Management were some of the funds to open new LHCG stakes in Q1.

Healthcare services provider LHC Group, Inc. is set to be acquired by UnitedHealth Group Incorporated (NYSE:UNH) in a deal valued at $170 per share. The deal is expected to close later this year. LHC Group had $576.2 million in revenue and $0.98 in adjusted EPS during Q2, both of which came in below estimates.

Here is what the Carillon Scout Small Cap Fund had to say about LHC Group, Inc. in its Q1 2022 investor letter:

“LHC Group (NASDAQ:LHCG) provides post-acute healthcare services including home health, hospice, home and community-based, and facility-based services as well as healthcare innovations. Favorable demographics and the cost benefits of at-home care have driven favorable long-term results. What’s more, late in the quarter, the company was approached with a buyout option from a large national healthcare company.”

6. Change Healthcare Inc. (NASDAQ:CHNG)

Value of Varenne Capital Partners‘ 13F Position: $7.04 million

Number of Hedge Fund Shareholders: 51

Closing out the first half of the list is Change Healthcare Inc. (NASDAQ:CHNG), in which Varenne trimmed its stake by 1% during Q2 to 305,083 shares, a position which accounted for 1.95% of the value of the fund’s 13F portfolio. David Abrams’ Abrams Capital Management owns the largest CHNG stake in our database, at just under 17 million shares, with the stock ranking as the fund’s third-largest position.

Change Healthcare Inc. is another company that UnitedHealth Group Incorporated is attempting to buy, having first announced the proposed merger in January 2021. Antitrust concerns have held up the potential deal, and has headed all the way to a trial, which began on August 1 and is expected to last two weeks.

The American Hospital Association has come out against the merger, noting that it would reduce competition in the healthcare information technology space in addition to raising concerns about how patient care and claims should the largest insurer in the U.S acquire that much healthcare data and power. Analysts remain bullish on Change Healthcare Inc. regardless of the trial’s outcome, with some believing the stock has limited downside from current levels and that it could even eclipse the United Health purchase price within a year on its own.

Check out the second half of this article to see where Alphabet Inc., NIKE, Inc., and Dollar General Corporation rank among Varenne’s top stock picks.

5. Warner Bros. Discovery, Inc. (NASDAQ:WBD)

Value of Varenne Capital Partners‘ 13F Position: $17.3 million

Number of Hedge Fund Shareholders: 76

Guiseppe Perrone and Marco Sormani’s Varenne Capital Partners built a new stake in Warner Bros. Discovery, Inc. (NASDAQ:WBD) during Q2, buying 1.29 million shares that were worth 4.78% of the value of the fund’s 13F portfolio. Since peaking in the first quarter of 2021, hedge fund ownership of WBD has fallen by 17% since.

Warner Bros. Discovery, Inc. was the result from another recent merger, of industry titans Discovery Communications and Warner Media. The combined entity boasts an impressive stable of entertainment brands and content, including HBO, DC Films, Warner Bros., TLC, CNN, and The Cartoon Network.

Warner Bros. Discovery, Inc. also has two streaming services, HBO Max and Discovery+, which the company plans to likewise merge into a single service. The initiative, which will include a round of layoffs, is partly intended to cut costs as part of the $3 billion in savings that CEO David Zaslav said the merger would deliver. Analysts predict the company will pull in Q2 revenue of $11.84 billion.

4. KLA Corporation (NASDAQ:KLAC)

Value of Varenne Capital Partners‘ 13F Position: $23.1 million

Number of Hedge Fund Shareholders: 52

Varenne’s stake in KLA Corporation (NASDAQ:KLAC) accounts for 6.4% of its $361 million 13F portfolio after the fund trimmed its position by 5% during Q2 to 72,361 shares. Hedge fund ownership of KLA has risen during five of the past six quarters, jumping by 58% during that time.

KLA Corporation, which provides process-monitoring systems for the semiconductor industry, reported strong fiscal Q4 results in late July, which were powered by its foundry and logic segments. The company’s $2.49 billion in revenue and $5.81 in adjusted EPS beat estimates, even in the face of ongoing supply chain headwinds. Deutsche Bank analyst Sidney Ho has a ‘Buy’ rating and $400 price target on KLAC shares, with the price target being raised from $385 earlier this month.

Vltava Fund had been waiting for the perfect opportunity to buy KLA Corporation shares and found it recently, as it detailed in its Q1 2022 investor letter:

“We then used the money freed up to, among other things, open three new positions. The stock price declines during the Russian invasion brought a lot of good prices to the market. Out of all the possibilities we considered, we picked the stock of KLA Corporation (KLAC).

KLA Corporation develops leading-edge equipment and services that enable innovation throughout the electronics industry. It specialises in process management and control in semiconductor manufacturing and the related nanoelectronics industries. During manufacturing processes, products must be inspected for defects and correct critical dimensions in order to identify and eliminate possible sources of problems. As customers continue to enforce Moore’s Law, smaller chips must meet more precise specifications, which in turn increases the need for advanced inspection and diagnostic tools. This is a key step within the entire manufacturing process and one in which the company has built a very strong, and in places dominant, global position. We have been watching and waiting for an opportunity to acquire this stock for some time already, and this year’s drop in its price finally prompted us to buy.”

3. NIKE, Inc. (NYSE:NKE)

Value of Varenne Capital Partners‘ 13F Position: $41.5 million

Number of Hedge Fund Shareholders: 67

Varenne cut its NIKE, Inc. stake by 44% during Q2, just a quarter after first amassing it, slashing its exposure to the stock to 11.5% from 19.8% in the process. The position nonetheless remained the fund’s third-largest. There’s been net selling of NIKE among hedge funds during four of the past five quarters, with ownership of the stock slipping by 20% during that time.

NIKE, Inc. shares took a hit following the company’s fiscal Q4 results, as inventory surged by 23%, a clear indicator that even the most popular apparel brand in the world isn’t immune to the effects of falling discretionary spending. Nike indicated that it may need to adopt stronger promotional efforts in the coming quarters to clear out that inventory, which will put pressure on the company’s bottom line.

The ClearBridge All Cap Growth Strategy sees a number of potential future catalysts for NIKE, Inc.’s shares, discussing the company in its Q4 2021 investor letter:

“Nike is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. Nike is also still underindexed to the women’s category, which we see as a significant ongoing catalyst.

2. Dollar General Corporation (NYSE:DG)

Value of Varenne Capital Partners‘ 13F Position: $105 million

Number of Hedge Fund Shareholders: 53

Varenne trimmed its Dollar General Corporation position by 9% during Q2, reducing its share count to 429,480. The fund’s 13F exposure to the stock nonetheless jumped to 29.23% from 21.14%, as DG had a strong Q2 relative to most other companies, gaining 10%. Hedge fund ownership of Dollar General rose by 20% during Q1.

Dollar General Corporation is the perfect portfolio complement to a discretionary stock like Nike, as the discount consumables retailer typically excels during lean economic periods. Dollar General had a 31-year streak of positive same-store sales growth snapped in 2021 due to frenetic buying of certain products during the early days of the pandemic in 2020. The company expects to return to positive comps in 2022.

Gordon Haskett analyst Chuck Grom recently upgraded Dollar General Corporation to ‘Buy’ from ‘Hold’. He has a $280 price target on the stock.

1. Alphabet Inc. (NASDAQ:GOOG)

Value of Varenne Capital Partners‘ 13F Position: $115 million

Number of Hedge Fund Shareholders: 372

Topping the list is Alphabet Inc., which Varenne Capital’s 13F portfolio has 32% exposure to. Surprisingly, that would only rank it third in terms of exposure to GOOG among the funds in our database based on Q1 data. Alphabet is the most popular stock among hedge funds, with 372 owning both classes of the company’s shares.

Despite slowing ad spending, Alphabet Inc. was still able to grow revenue by 13% during Q2, which included a strong 14% year-over-year growth rate for its Search division. Alphabet is also pouring money into its stock at an opportune time, with shares down 18% this year. The company bought back $15 billion worth of shares in Q2, putting its $12.5 billion in free cash flow generation to good use.

The Oakmark Global Select Fund expects Alphabet Inc. to generate strong advertising growth this year, saying this about the company in its Q2 2022 investor letter:

“Alphabet (NASDAQ:GOOG), a global communication services provider, was a top detractor to the Fund’s performance for the quarter. Investors were disappointed by the company’s first-quarter earnings report, though its results were largely in line with analysts’ expectations, including 23% revenue growth to $68 billion and a total operating margin of 30%. Search revenue improved 28% in constant currency, led by retail and the ongoing recovery in travel. Although YouTube’s brand advertising was strong, segment revenue decelerated due to difficult comparable sales and the adverse effects of the Russia/Ukraine war. However, share repurchases for the first quarter amounted to $13.3 billion and were tracking in line with our full-year estimate, and the company authorized an additional $70 billion for buybacks, adding to our confidence in management’s commitment to adding value for its shareholders. While an industry-wide trend of slowing advertising revenues persisted in the second quarter, we believe Alphabet’s total advertising business is still positioned to grow in the mid-teens in 2022 and that the stock remains an attractive holding.”

For more of the latest stock picks worth considering for your portfolio, check out Top 10 Stocks to Buy Now According to Billionaire Seth Klarman and 10 Dividend Stocks to Buy According to John Allison’s Unio Capital.