In this article, we discuss the top 10 stock picks of Cannell Capital. If you want to skip our detailed analysis of the fund’s investment philosophy and performance, go directly to Top 5 Stock Picks of Cannell Capital.
In 1992, J. Carlo Cannell established Cannell Capital. Previously, he worked for Dakin Securities, an investment firm in San Francisco, California. Cannell attended New College in Oxford after graduating from Princeton and studied commerce at Templeton College. He has over 19 years of expertise in analyzing technology firms and 16 years of experience investing in small-caps. Cannell, a third-generation investment manager, serves as the managing member of the Wyoming-based Cannell Capital.
Cannell claims that his observations of the natural forces at work in the markets and, to some extent, the rest of the world affect how he approaches investment. He investigates the patterns and movements rather than making predictions about which businesses will prosper to gain a thorough grasp of what is occurring right now, where the market is going, and what goods or services may become increasingly popular in the near future.
Cannell prefers to invest in small-cap businesses. He stated:
“Everyone likes to buy stuff that’s exciting. I’m into boring. And if you look at the companies that have generated the best returns – I went over business’ over 60 years of data. What are the real titans? Apple computers is the only profitable and exciting company. You know what the profitable companies are? Resin companies. Insurance. If you run an insurance company well, it’s a great business. I developed this crazy infatuation with mini-storage business’. They’re good business’! You put ‘em in Henderson Nevada, if people don’t pay, you just cut the lock… buy boring, good cash flow generative business’.”
Cannell Capital is an employee-owned investor in the public equities markets. The hedge fund invests in several sectors, including information technology, energy, industrials, consumer discretionary, finance, healthcare, communications, and real estate. In the first quarter of 2022, the 13F portfolio of the hedge fund reported that it had $661.56 million invested at the end of March in 64 stocks. Some of the most significant stocks in Cannell Capital’s portfolio included Yandex NV (NASDAQ:YNDX) and Pinterest, Inc. (NYSE:PINS).
J. Carlo Cannell of Cannell Capital
Cannell Capital added Yandex NV (NASDAQ:YNDX) to its portfolio in the first quarter by buying 341,104 shares. Another stock added in the first quarter to the portfolio was Pinterest, Inc. (NYSE:PINS), where Cannell Capital purchased 605,815 shares. On July 5, Barclays analyst Ross Sandler maintained an Equal Weight rating on Pinterest, Inc. (NYSE:PINS) while lowering his price objective to $20 from $24. Given the reduction in investment and conversions throughout the internet infrastructure in Q2, a growing trend from new rivals such as TikTok and Apple, and the obvious harsh comparisons, the analyst predicted a perfect storm.
Our Methodology
We have selected the top 10 stock picks of Cannell Capital for our list below. The stocks have been selected from Cannell Capital’s first-quarter portfolio.
Top Stock Picks of Cannell Capital
10. Arlo Technologies, Inc. (NYSE:ARLO)
Cannell Capital’s Stake Value: $24,355,000
Percentage of Cannell Capital’s Portfolio: 3.68%
Number of Hedge Fund Holders: 25
Arlo Technologies, Inc. (NYSE:ARLO) provides a cloud-based platform across Asia Pacific, Europe, the Middle East, and the Americas, together with its subsidiaries. As of January 2022, Arlo Technologies, Inc. (NYSE:ARLO) claimed that it had supplied 21.6 million devices, had 5.82 million registered accounts, and 877,000 paying accounts.
In Q1 2022, Cannell Capital held 2.75 million shares of Arlo Technologies, Inc. (NYSE:ARLO), worth $24.36 million, representing 3.68% of the total 13F securities. The hedge fund increased its stake in Arlo Technologies, Inc. (NYSE:ARLO) by 12% in the first quarter. In addition, Cannell Capital is the biggest stakeholder of the company.
According to Insider Monkey’s Q1 data, 25 hedge funds were bullish on Arlo Technologies, Inc. (NYSE:ARLO), compared to 19 funds in the prior quarter. The total stakes owned in Q1 2022 amounted to $81.92 million.
Just like Yandex NV (NASDAQ:YNDX) and Pinterest, Inc. (NYSE:PINS), Arlo Technologies, Inc. (NYSE:ARLO) is one of the stocks on the radar of Cannell Capital.
9. Select Energy Services, Inc. (NYSE:WTTR)
Cannell Capital’s Stake Value: $25,271,000
Percentage of Cannell Capital’s Portfolio: 3.81%
Number of Hedge Fund Holders: 21
Select Energy Services, Inc. (NYSE:WTTR), a provider of oilfield services, specializes in water management and chemical services to the onshore oil and gas company in the United States. Shares of Select Energy Services, Inc. (NYSE:WTTR) rallied 7.86% in the last 12 months as of July 6, resulting in a $690.57 million market capitalization.
At the end of March, a total of 21 hedge funds tracked by Insider Monkey held long positions in Select Energy Services, Inc. (NYSE:WTTR). By comparison, 11 hedge funds held shares in Select Energy Services, Inc. (NYSE:WTTR) a quarter ago.
Cannell Capital reported owning shares worth $25.27 million in Select Energy Services, Inc. (NYSE:WTTR) at the end of March, making it the company’s most significant stakeholder. Brightlight Capital followed it with a $19.70 million position.
8. Taboola.com Ltd. (NASDAQ:TBLA)
Cannell Capital’s Stake Value: $25,709,000
Percentage of Cannell Capital’s Portfolio: 3.88%
Number of Hedge Fund Holders: 23
Taboola.com Ltd. (NASDAQ:TBLA) operates an artificial intelligence-based algorithmic engine platform in Israel, France, the United Kingdom, Germany, the United States, and other countries with the help of its subsidiaries. Fund managers reduced their Taboola.com Ltd. (NASDAQ:TBLA) holdings in the first quarter. Insider Monkey’s data shows that 23 elite hedge funds were bullish on Taboola.com Ltd. (NASDAQ:TBLA) in Q1 2022, down from 25 funds a quarter earlier.
On May 16, Cowen analyst John Blackledge maintained an Outperform rating on Taboola.com Ltd. (NASDAQ:TBLA), while trimming his price target to $9 from $13. The analyst claimed that Taboola.com Ltd. (NASDAQ:TBLA)’s Q1 results were inconsistent and that their Q2 prediction was too low, mainly due to macroeconomic concerns and the situation in Ukraine.
Cannell Capital added Taboola.com Ltd. (NASDAQ:TBLA) to its portfolio during the second quarter of 2021, when the hedge fund bought 1.23 million shares worth about $12.68 million. Since then, the hedge fund has been purchasing additional shares in Taboola.com Ltd. (NASDAQ:TBLA) every quarter. As a result, Cannell Capital, with approximately 4.98 million shares worth $25.71 million, is the largest shareholder of Taboola.com Ltd. (NASDAQ:TBLA) as of Q1 2022.
7. Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH)
Cannell Capital’s Stake Value: $27,687,000
Percentage of Cannell Capital’s Portfolio: 4.18%
Number of Hedge Fund Holders: 19
Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) and its subsidiaries are outdoor sports equipment retailers in the United States. On April 27, 2022, Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) had 125 operating stores. According to Insider Monkey’s database, Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) was found in the public stock portfolios of 19 hedge funds at the end of March 2022, compared to 28 funds in the earlier quarter.
Craig-Hallum analyst Ryan Sigdahl reiterated a Buy rating on Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) on June 1 and slashed his price objective to $15 from $20. Even though the company’s performance was slightly below sell-side consensus, it offered positive updates on its new initiatives, outperformed expectations in the first quarter, and provided better-than-expected Q2 guidance.
J. Carlo Cannell’s Cannell Capital was the most significant stakeholder of Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) as of March this year, increasing its stake in the company by 62% in Q1, holding 2.59 million shares worth almost $27.69 million.
Here is what Merion Road Capital Management had to say about Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) in its Q1 2022 investor letter:
“During the quarter I added to Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH). SPWH is an outdoor sporting goods retailer with about half of their revenue coming from hunting & shooting products (guns, ammo). I initiated our position back in December following their failed merger with Great Outdoors on the grounds of anti‐trust concerns. It appeared that the stock was being sold off indiscriminately by merger arbitrageurs and valuation seemed attractive, particularly after adjusting for the receipt of a $55mm termination payment and unwind of excess inventory.….” (Click here to see the full text)
6. Viad Corp (NYSE:VVI)
Cannell Capital’s Stake Value: $27,709,000
Percentage of Cannell Capital’s Portfolio: 4.18%
Number of Hedge Fund Holders: 13
Viad Corp (NYSE:VVI) is a supplier of integrated leisure travel, live events, and advertising in the US, Canada, the UK, continental Europe, the United Arab Emirates, and Iceland. Oppenheimer analyst Tyler Batory commenced coverage of Viad Corp (NYSE:VVI) on June 13, assigning an Outperform rating and a $42 price target. He believed that the unmet demand for leisure travel, together with the inauguration of many new attractions and a new hotel, may fuel the expansion of the tourism industry.
Cannell Capital’s investments in Viad Corp (NYSE:VVI) have fluctuated during the previous quarters, which may have contributed to the dramatic reversal of fortune. The hedge fund initiated a stake in Viad Corp (NYSE:VVI) in Q4 2018. However, it sold all the company shares in the second quarter of 2019. Again, it purchased 303,603 shares of the company in Q1 2020. In Q1 2022, the hedge fund owned 777,467 shares of Viad Corp (NYSE:VVI) worth over $27.71 million, representing 4.18% of its portfolio.
Viad Corp (NYSE:VVI) has recently experienced an increase in hedge fund interest. Viad Corp (NYSE:VVI) was in 13 hedge funds portfolios at the end of the first quarter of 2022, compared to 12 hedge funds in our database with Viad Corp (NYSE:VVI) at the end of Q4 2021.
In addition to Yandex NV (NASDAQ:YNDX) and Pinterest, Inc. (NYSE:PINS), Viad Corp (NYSE:VVI) is a notable stock in Cannell Capital’s Q1 portfolio.
Click to continue reading and see Top 5 Stock Picks of Cannell Capital.
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Disclosure: None. Top 10 Stock Picks of Cannell Capital is originally published on Insider Monkey.
