In this article, we discuss the top 10 stock picks of Gregg Moskowitz’s Interval Partners.
Gregg Moskowitz has been the managing partner at Interval Partners since October 2011, where he oversees over $2.42 billion in managed 13F securities. Moskowitz’s portfolio comprises stocks from the information technology, finance, industrials, consumer staples, transport, and communications sectors, with a top ten holdings concentration of 26.06%.
Before joining the New York-based investment management firm, Moskowitz was the managing director at Bascom Hill Partners, an investment advisory firm, where he served for two years, from 2009 to 2011. Previously, he was a research analyst at the Galleon Group, one of the largest hedge funds of its time, from 2003 to 2008. He graduated from the University of Wisconsin with a Bachelor’s in business administration and management.
At the end of the second quarter of 2021, Moskowitz’ 13F portfolio consisted of some extremely noteworthy stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Walmart Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), and Southwest Airlines Co. (NYSE:LUV), among others.
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.
Our Methodology
With this context in mind, here are the top 10 stock picks of Gregg Moskowitz’ Interval Partners. We used Interval Partners’ 13F portfolio for the second quarter of 2021 to rank these stocks. The list was compiled according to the value of each holding in the investment portfolio.
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Top Stock Picks of Gregg Moskowitz’ Interval Partners
10. The AZEK Company Inc. (NYSE:AZEK)
Interval Partners’ Stake Value: $30,506,000
Percentage of Interval Partners’ 13F Portfolio: 1.25%
Number of Hedge Fund Holders: 37
The AZEK Company Inc. (NYSE:AZEK) is a building and construction company, which designs outdoor living spaces with sustainable methods and building materials, focusing on designs that are modern and made of 100% recycled and repurposed materials. They have diverted millions of pounds of waste from landfills since 2020, saved over 3 million trees by replacing wood as a primary material in construction. The AZEK Company Inc. is one of the top stock picks of Gregg Moskowitz’ Interval Partners.
Interval Partners owns 718,459 shares in The AZEK Company Inc., valued at $30.5 million, representing 1.25% of Gregg Moskowitz’s Q2 portfolio.
At the end of Q2, 37 hedge funds tracked by Insider Monkey held stakes in The AZEK Company Inc., up from 29 in the previous quarter.
Here is what Baron Funds has to say about The AZEK Company Inc. in its Q2 2021 investor letter:
“The AZEK Company Inc.: AZEK is a leading manufacturer of outdoor, non-wood building products including decking, railing, trim, and other leading outdoor products. 95% of cash flow is generated from the U.S. residential housing market. We believe the company has a compelling multi-year strategic growth plan that should result in strong share price appreciation in the next few years.”
9. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Interval Partners’ Stake Value: $32,567,000
Percentage of Interval Partners’ 13F Portfolio: 1.34%
Number of Hedge Fund Holders: 37
Texas Roadhouse, Inc. (NASDAQ:TXRH) is an American steakhouse, specializing in Texan and Southwestern cuisines, headquartered in Louisville, Kentucky. Texas Roadhouse, Inc. has steakhouses in 666 locations across 49 US states, as of 2021. It is also located in 29 international locations in 10 countries. Texas Roadhouse, Inc. is one of the top stocks in Gregg Moskowitz’ Q2 portfolio.
Interval Partners’ owns 338,538 shares in Texas Roadhouse, Inc., worth $32.56 million, accounting for 1.34% of the firm’s 13F portfolio.
Wells Fargo analyst Jon Tower kept an Equal Weight rating on Texas Roadhouse, Inc., lowering the price target from $106 to $97 on October 18. He stated that the rising costs, as well as the COVID-19 Delta variant and Hurricane Ida would make demand unpredictable.
8. Caterpillar Inc. (NYSE:CAT)
Interval Partners’ Stake Value: $33,808,000
Percentage of Interval Partners’ 13F Portfolio: 1.39%
Number of Hedge Fund Holders: 62
Caterpillar Inc. (NYSE:CAT) is a Fortune 100 company operating in the US industrial sector. Caterpillar Inc. is engaged in manufacturing machinery, engines, financial products, and insurance. It is the largest manufacturer of construction equipment in the world. Caterpillar Inc. is a Dow Jones Industrial Average Index Component, and it is one of the top stock picks by Gregg Moskowitz.
Interval Partners owns 155,344 shares in Caterpillar Inc., amounting to $33.8 million, making up 1.39% of the firm’s 13F portfolio.
At the end of June, 62 hedge funds monitored by Insider Monkey were long Caterpillar Inc., with stakes roughly worth $5.26 billion, up from 53 in Q1, with a total stake value of almost $4.95 million. Ken Fisher’s Fisher Asset Management is the leading stakeholder in Caterpillar Inc., with 6.83 million shares valued at $1.31 billion.
Here is what Oakmark Funds has to say about Caterpillar Inc. in its Q2 2021 investor letter:
“Having followed the company closely for north of a decade, Caterpillar is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
7. Eaton Corporation plc (NYSE:ETN)
Interval Partners’ Stake Value: $34,774,000
Percentage of Interval Partners’ 13F Portfolio: 1.43%
Number of Hedge Fund Holders: 40
Eaton Corporation plc (NYSE:ETN) is an Irish multinational power management company, with operational headquarters in Ohio. Eaton Corporation plc (NYSE:ETN) is engaged in several products and services, including electrical, industrial, aerospace, hydraulics, filtration, e-mobility, and vehicle sectors. Eaton Corporation plc (NYSE:ETN) is one of the top stocks according to Gregg Moskowitz.
Interval Partners owns 234,671 shares in Eaton Corporation plc (NYSE:ETN), worth $34.77 million, making up 1.43% of Moskowitz’ 13F portfolio.
On August 3, Eaton Corporation plc (NYSE:ETN) reported an EPS of $1.72 for the second quarter, exceeding analysts’ expectations by $0.15. Eaton Corporation plc (NYSE:ETN)’s revenue was $5.21 billion, beating estimates by $223.16 million.
Here is what ClearBridge Investments has to say about Eaton Corporation plc (NYSE:ETN) in its Q2 2021 investor letter:
“One secular consumer trend we are increasingly investing in is electric vehicles (EVs). In addition to owning Aptiv and NXP, leading component suppliers for EVs, we initiated a new position in the second quarter in Eaton, a global manufacturer of electrical, power management and hydraulics components and equipment. Eaton is a critical player in supporting the increasing electrification of the global economy with opportunities in areas ranging from utility generation and distribution infrastructure to EV charging stations, solar power systems and electricity supply for data centers. Eaton has transformed itself over the last decade from a heavy industrial company into a diverse set of businesses levered to the more attractive secular growth of electrification. We anticipate this focus will allow electrical products’ revenue to grow in the mid-to-high single digits and support margin improvement.”
6. Amazon.com, Inc. (NASDAQ:AMZN)
Interval Partners’ Stake Value: $37,611,000
Percentage of Interval Partners’ 13F Portfolio: 1.55%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. is a highly sought-after tech stock by hedge funds, and it is one of the top stock picks of Gregg Moskowitz’ Interval Partners. The American tech multinational offers services like e-commerce, cloud computing, digital streaming, and artificial intelligence. It is one of the Big Five United States tech companies, and is the most valuable global brand.
Moskowitz’ Interval Partners owns 10,933 shares in Amazon.com, Inc., worth $37.61 million, making up 1.55% of the firm’s 13F portfolio for the second quarter.
At the end of June, of the hedge funds tracked by Insider Monkey, 271 funds were long Amazon.com, Inc., up from 243 in the previous 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.”
5. Expedia Group, Inc. (NASDAQ:EXPE)
Interval Partners’ Stake Value: $42,991,000
Percentage of Interval Partners’ 13F Portfolio: 1.77%
Number of Hedge Fund Holders: 87
Expedia Group, Inc. (NASDAQ:EXPE) is a travel technology company, which facilitates private and small business travel. Through its websites and travel metasearch engines like expedia.com, Vrbo, hotels.com, hotwire.com, Orbitz, and Travelocity, among others, Expedia Group, Inc. acts as a fare aggregator for users.
Interval Partners owns 262,603 shares in Expedia Group, Inc., amounting to $42.99 million, representing 1.77% of Moskowitz’ 13F portfolio.
By the end of June, 87 hedge funds were long Expedia Group, Inc., up from 86 in the previous quarter.
Here is what ClearBridge Investments has to say about Expedia Inc. in its Q1 2021 investor letter:
“Several of our better performers in the first quarter were purchased while their business models were under stress from COVID restrictions or the macro environment the pandemic created. What gave us confidence in purchasing Expedia were the actions the company took to extend out their balance sheets until travel resumed. It should benefit as a broader vaccination rollout prompts cruise lines to resume operations and consumers to start traveling again and are positioned to deliver better margins and gain pricing power as the economy normalizes due to the cost controls implemented during the downturn.”
4. Acuity Brands, Inc. (NYSE:AYI)
Interval Partners’ Stake Value: $52,883,000
Percentage of Interval Partners’ 13F Portfolio: 2.18%
Number of Hedge Fund Holders: 33
Acuity Brands, Inc. (NYSE:AYI) is one of the top stock picks of Gregg Moskowitz’ Interval Partners. It is a lighting and building management company from Georgia, which operates in North America, Europe, and Asia. Acuity Brands, Inc. is also the largest manufacturer of lighting in North America. The commercial and industrial lighting mega company is an S&P 400 Component.
Moskowitz’ Interval Partners owns 282,749 shares in Acuity Brands, Inc., with an approximate stake value of $52.88 million. Acuity Brands, Inc. represents 2.18% of Moskowitz’ 13F portfolio for Q2.
At the end of Q2, 33 hedge funds in Insider Monkey’s database were bullish on Acuity Brands, Inc., up from 31 in Q1.
3. Walmart Inc. (NYSE:WMT)
Interval Partners’ Stake Value: $56,365,000
Percentage of Interval Partners’ 13F Portfolio: 2.32%
Number of Hedge Fund Holders: 71
Walmart Inc. is an American multinational retail mega corporation, with hypermarkets, discount departmental stores, and grocery chains across the United States and Canada, as well as subsidiaries in multiple countries including Mexico, India, and Central America. Walmart Inc. has 10,524 stores in 24 countries, operating under 48 different brand names as of July 2021. Walmart Inc. is one of Gregg Moskowitz’ top stock picks.
Interval Partners owns stakes worth $56.36 million in Walmart Inc. as of the end of June, and the retail giant makes up 2.32% of the investment firm’s 13F portfolio.
On October 25, KeyBanc analyst Edward Yruma kept an Overweight rating on the stock, with a price target of $180. The analyst said that Walmart Inc. is positioned to grow further via e-commerce and digital advertising, since these channels present monetization opportunities.
At the end of Q2, 71 hedge funds were long Walmart Inc., up from 58 in the previous quarter. Fisher Asset Management is the leading stakeholder in Walmart Inc., with 12.6 million shares worth $1.78 billion.
2. Builders FirstSource, Inc. (NYSE:BLDR)
Interval Partners’ Stake Value: $57,433,000
Percentage of Interval Partners’ 13F Portfolio: 2.37%
Number of Hedge Fund Holders: 60
Builders FirstSource, Inc. (NYSE:BLDR) manufactures and supplies building materials, and it is the largest supplier of building products, prefabricated components and value-added services in the United States. The main clientele for Builders FirstSource, Inc. belongs to the residential construction sector, as well as individuals invested in repair and remodeling. Operating in 550 locations across 40 states in the US, Builders FirstSource, Inc. is one of the top stocks in Gregg Moskowitz’ 13F portfolio.
Interval Partners owns 1.34 million shares in Builders FirstSource, Inc. as of Q2, amounting to $57.43 million, representing 2.37% of Moskowitz’ 13F portfolio.
Ken Fisher’s Fisher Asset Management owns 190,754 shares in Builders FirstSource, Inc., valued at $9.87 million. Overall, 60 hedge funds tracked by Insider Monkey were long Builders FirstSource, Inc. at the end of Q2, up from 48 in Q1.
Here is what Merion Road Capital Management has to say about Builders FirstSource, Inc. in its Q3 2021 investor letter:
“I added to our position in Builders FirstSource (“BLDR”) during the quarter. BLDR is the largest national supplier of structural building products and value-added components to the residential construction market. They have been active in consolidating the industry, most notably with the merger of BMC earlier this year. Like other distributors, BLDR benefits from scale advantages that afford them a robust product offering, enhanced purchasing power, and fixed cost leverage. They will continue to acquire smaller competitors and have announced 5 new deals so far this year.
I view the strategic benefit of these acquisitions in three different buckets. There are the core tuck-in acquisitions of facilities and customer lists that increase scale and geographic reach. An example would be the company’s May acquisition of John’s Lumber, a lumber and specialty product distributor serving the Detroit MSA, at 0.5x revenue. There are product acquisitions that leverage their platform to increase distribution and improve the product offering. For instance, last month BLDR announced the acquisition of California TrusFrame, a designer and manufacturer of prefabricated components like trusses and wall panels, at 1.3x revenue. And lastly BLDR has begun investing in software and services. In June they spent $450mm on the purchase of WTS Paradigm, a software company that addresses the complexity around building configuration, estimating, and manufacturing, at 9.0x revenue. By utilizing software in the planning process, WTS Paradigm cuts down on material and labor waste, ensures an optimal fit of product and design, and eases the contractor’s workload. BLDR has followed this up with a much smaller software acquisition in September.
BLDR is in the very early innings of their software investment, so it is difficult to pinpoint exactly how it will impact the company in the coming years. Management believes that there is a lot of low hanging fruit, pointing to a McKinsey study ranking the construction industry as second to last on overall digitization. If anyone has had any work done to their house, I am sure they can anecdotally attest to this. BLDR plans to leverage WTS Paradigm to increase internal productivity (i.e. improved estimating leading to fewer visits to the job site), cross-sell the software to existing clients, and drive greater adoption of value-added products. So thinking a few years out I think the goal would be to have higher margins on their commodity business, a greater mix of revenue coming from value added products, a stronger relationship with their customer, and an enhanced competitive advantage…” (Click here to see the full text)
1. CSX Corporation (NASDAQ:CSX)
Interval Partners’ Stake Value: $71,801,000
Percentage of Interval Partners’ 13F Portfolio: 2.96%
Number of Hedge Fund Holders: 56
An American holding company offering rail transportation and real estate services in North America, CSX Corporation (NASDAQ:CSX) is the top stock pick of Gregg Moskowitz’ Interval Partners. CSX Corporation is a Fortune 500 Company, operating railroads in the Eastern US and the Canadian provinces of Quebec and Ontario.
At the end of June, 56 hedge funds were bullish on CSX Corporation, up from 53 in the previous quarter.
Deutsche Bank analyst Amit Mehrotra raised the price target on CSX Corporation from $38 to $41, and he kept a Buy rating on the stock.
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This article is originally published at Insider Monkey.
