In this article, we will be taking a look at the top 10 stock picks of Jose Fernandez’s Stepstone Group. To skip our detailed analysis, you can go directly to see Top 5 Stock Picks of Jose Fernandez’s Stepstone Group.
Jose Fernandez previously worked as the managing director of Pacific Corporate Group before co-founding Stepstone Group, where he focuses on Latin America and US based companies. Currently, Stepstone has more than 280 professionals analyzing markets and identifying investment opportunities, while working closely with clients to build optimal asset allocation. Stepstone has more than $570 billion in total capital allocation and $134 billion in assets under management. With a current portfolio of more than $1.34 billion, it is obvious that Jose Fernandez’s Stepstone Group is doing quite well.
We’ve all seen how uncertain the economy has been in 2022, with the stock market being decimated, as inflation reaches record levels. Many stocks which are seen as solid picks, especially in the tech industry, have crashed. These stocks include Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:META), and Amazon.com, Inc. (NASDAQ:AMZN).
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This is why Stepstone has liquidated its shareholding in multiple stocks which include Coinbase Global, Inc. (NASDAQ:COIN), one of the biggest cryptocurrency exchanges in the world right now. Of course, whatever pain the stock markets are feeling is amplified when you look at the crypto market, which has crashed from the dizzying heights of late 2021. Bitcoin, which peaked at close to $70,000, is currently trading at around $21,000 while many other top traded coins have lost up to 90% of their value.
This is why you won’t see many tech picks such as Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:META) and Amazon.com, Inc. (NASDAQ:AMZN), but instead Stepstone focuses more on low value stocks which have the potential to grow significantly.
Our Methodology
We used Stepstone Group’s Q1 portfolio and picked the top 10 stocks for this analysis.
Top Stock Picks of Jose Fernandez’s Stepstone Group
10. Vacasa, Inc. (NASDAQ:VCSA)
Stepstone’s Stake Value: $24.357 million
Number of Hedge Fund Holders: 20
Vacasa, Inc. (NASDAQ:VCSA) is a vacation rental management company that manages over 35,000 locations in multiple countries including the United States, Canada, Costa Rica, and Belize. Vacasa, Inc. (NASDAQ:VCSA) stock has fallen by more than 30% in June even as lockdown restrictions expired and trading increased.
JMP Securities analyst Nicholas Jones on June 9 initiated coverage of Vacasa, Inc. (NASDAQ:VCSA) with an Outperform rating but lowered the price target to $6.50 from $12.00 as part of a broader research note on Internet & Digital Media.
9. Doma Holdings Inc. (NYSE:DOMA)
Stepstone’s Stake Value: $32.288 million
Number of Hedge Fund Holders: 22
Doma Holdings Inc. (NYSE:DOMA) has seen its share price sink in 2022, with a YTD loss of almost 79%. Doma Holdings Inc. (NYSE:DOMA) is a real estate technology company aiming to revolutionize the way real estate transactions are conducted in a faster, efficient, and more reliable method.
Stepstone’s shareholding has not changed, which shows that the hedge fund stands by its position and expects the stock to rise in the future. Compass Point analyst Jason Weaver on May 25 initiated coverage of Doma Holdings Inc. (NYSE:DOMA) with a Neutral rating and a $2 price target.
8. MoneyLion Inc. (NYSE:ML)
Stepstone’s Stake Value: $61.269 million
Number of Hedge Fund Holders: 23
Founded in 2013, MoneyLion Inc. (NYSE:ML) offers a mobile banking app and aims to be a one-stop shop for all financial requirements. MoneyLion Inc. (NYSE:ML)’s Q1 results more than doubled from the previous year, and the management expects this momentum to continue, resulting in expectations of reaching breakeven adjusted earnings before interest, tax, depreciation, and amortization by the end of the year.
However, there is still a long way to go for MoneyLion Inc. (NYSE:ML) considering that the share price is down by more than 85% after the company went public back in September 2021.
7. UiPath Inc. (NYSE:PATH)
Stepstone’s Stake Value: $77.053 million
Number of Hedge Fund Holders: 33
Making up 5.74% of the total portfolio and one of the top 10 picks of Jose Fernandez’s Stepstone Group is UiPath Inc. (NYSE:PATH), a software company specializing in robotic process automation software.
It’s not just tech companies such as Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:META) and Amazon.com, Inc. (NASDAQ:AMZN) which have taken a beating over 2022 – cloud companies have struggled as well. However, a few weeks ago, cloud companies did rally, led by UiPath Inc. (NYSE:PATH). Truist analyst Terry Tillman on June 27 kept a Buy rating on UiPath with a $45 price target after the company reported a restructuring, reaffirmed annual revenue guidance, and announced a 5% reduction to its global workforce.
6. Xometry, Inc. (NASDAQ:XMTR)
Stepstone’s Stake Value: $78.966 million
Number of Hedge Fund Holders: 19
Xometry, Inc. (NASDAQ:XMTR) is an industrial parts company and its customers include many major market players such as NASA, BMW, Bosch, and Dell Technologies Inc. (NYSE:DELL). Even though Xometry, Inc.’s (NASDAQ:XMTR) revenue growth has been nothing short of impressive, due to an uncertain 2022, unprofitable companies have seen their share price decline, which means they may be ripe for buying.
Goldman Sachs analyst Eric Sheridan on June 9 maintained a Buy rating on Xometry, Inc. (NASDAQ:XMTR) but lowered the price target on the shares to $44 from $51. The analyst cut forward operating estimates to account for a higher possibility of a weaker macro environment.
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Disclosure. None. Top 10 Stock Picks of Jose Fernandez’s Stepstone Group is originally published on Insider Monkey.
