Top 10 Stock Picks of Ryan Frick’s Dorsal Capital: Facebook, Snap and More

In this article, we will discuss top 10 stock picks of Ryan Frick’s Dorsal Capital: Facebook, Snap and More based on Q2 holdings of the fund. If you want to skip our detailed analysis of Frick’s history, investment philosophy, and hedge fund performance, go directly to the Top 5 Stock Picks of Ryan Frick’s Dorsal Capital.

Ryan David Frick graduated from Stanford University with a master’s degree in business administration. He has worked as an analyst at Credit Suisse First Boston, a portfolio manager at SAC Capital, and a fund manager at CR Intrinsic. Dorsal Capital Management was established by Ryan David Frick and Oliver Evans. The hedge fund was founded in 2009, and its headquarters are in Redwood City, California. Frick is currently the CIO of the hedge fund.

The investing goal of Dorsal Capital Management is to produce risk-adjusted total returns that are generally uncorrelated to the movement of broad stock indexes. Dorsal Capital Management specializes in assisting pooled investment vehicles. The hedge fund’s 13F public equity portfolio is worth $2.14 billion in the second quarter of 2021.

As of the second quarter, Dorsal Capital holds significant stakes in several companies including Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).

Based on the latest 13F holdings for the second quarter of 2021, Dorsal Capital owns 740,000 shares in Facebook, Inc. (NASDAQ:FB) after increasing its holding in the company by 48% in the second quarter of 2021. On September 13, Goldman Sachs analyst Eric Sheridan initiated coverage of Facebook, Inc. (NASDAQ:FB) with a “Buy” rating and gave a price target of $455.

In Microsoft Corporation (NASDAQ:MSFT), Ryan Frick’s Dorsal Capital owns 700,000 shares. The huge investment covers an impressive 8.85% of the fund’s portfolio.

Ryan Frick Dorsal Capital

Ryan Frick of Dorsal Capital

 

Dorsal Capital also has a significant holding in Alphabet Inc. (NASDAQ:GOOG). The hedge fund owns 74,000 shares in Alphabet Inc. (NASDAQ:GOOG), worth $180.69 million. On September 13, Goldman Sachs analyst Eric Sheridan initiated coverage of Alphabet Inc. (NASDAQ:GOOG) with a “Buy” rating and gave a price target of $3,350.

Why should we pay attention to Ryan Frick’s stock picks? 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 124 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 SPY. Our stock picks outperformed the market by more than 115 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.

Keeping all these points in mind, let’s start our list of top 10 stock picks of Ryan Frick’s Dorsal Capital. We used Frick’s 13F portfolio for the second quarter for this analysis.

Top Stock Picks of Ryan Frick’s Dorsal Capital: Facebook, Snap and More

10. Dynatrace, Inc. (NYSE: DT)

Frick’s Stake Value: $99,314,000
Percentage of Ryan Frick’s 13F Portfolio: 4.63%
Number of Hedge Fund Holders: 50

Dynatrace, Inc. (NYSE:DT) is a multinational technology firm that offers an artificial intelligence-based software intelligence platform. The company was founded in 2005 and is placed tenth on the list of top 10 stock picks of Ryan Frick’s Dorsal Capital. Dynatrace, Inc. (NYSE:DT) shares have returned 80.54% to investors over the course of the past 12 months.

On September 14, Dynatrace, Inc. (NYSE:DT) acquired SpectX, a company that specializes in high-speed parsing and query analytics. On July 29, Truist analyst Joel Fishbein raised the price target on Dynatrace, Inc. (NYSE:DT) to $72 from $60 and kept a “Buy” rating on the shares.

Dorsal Capital holds 1.70 million shares in Dynatrace, Inc. (NYSE:DT), worth over $99.314 million, representing 4.63% of their portfolio. The hedge fund has reduced its stake in the firm by 23% in the second quarter of 2021. In the second quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $1.95 billion in Dynatrace, Inc. (NYSE:DT), down from 52 the preceding quarter worth $1.64 billion.

In addition to Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), analysts are paying attention to Dynatrace, Inc. (NYSE:DT) amid the company’s long-term growth potential.

9. US Foods Holding Corp. (NYSE:USFD)

Frick’s Stake Value: $109,326,000
Percentage of Ryan Frick’s 13F Portfolio: 5.1%
Number of Hedge Fund Holders: 35

US Foods Holding Corp. (NYSE:USFD) markets and distributes frozen, fresh, and dry food in the United States. It was incorporated in 2007 and is ranked ninth on the list of top 10 stock picks of Ryan Frick’s Dorsal Capital. US Foods Holding Corp. (NYSE:USFD) shares have gained about 30.38% over the last 12 months.

On August 9, US Foods Holding Corp. (NYSE:USFD) posted earnings for the second quarter of 2021. It declared earnings per share of $0.58, beating the estimates by $0.23. In addition, the revenue over the period was $7.66 billion, up 66.5%YoY, surpassing the predictions by $810 million. On July 29, UBS analyst Mark Carden initiated coverage of US Foods Holding Corp. (NYSE:USFD) with a “Neutral” rating and gave a price target of $36.

Dorsal Capital holds 2.85 million shares in US Foods Holding Corp. (NYSE:USFD), worth $109.33 million, representing 5.1% of their portfolio. Insider Monkey’s data shows that 35 hedge funds held stakes in US Foods Holding Corp. (NYSE:USFD) as of the second quarter of 2021, compared to 40 funds at the end of the first quarter of 2021.

In addition to Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), analysts are paying attention to US Foods Holding Corp. (NYSE:USFD) amid the company’s long-term growth potential.

8. Zillow Group, Inc. (NASDAQ:Z)

Frick’s Stake Value: $116,109,000
Percentage of Ryan Frick’s 13F Portfolio: 5.42%
Number of Hedge Fund Holders: 76

Zillow Group, Inc. (NASDAQ:Z) is an online real estate marketplace based in the United States. It was founded in 2004 and is ranked eighth on the list of top 10 stock picks of Ryan Frick’s Dorsal Capital. Zillow Group, Inc. (NASDAQ:Z) currently has a $23.97 billion market capitalization.

On August 9, Zelman upgraded Zillow Group, Inc. (NASDAQ:Z) to “Buy” from “Hold.” On August 5, Zillow Group, Inc. (NASDAQ:Z) declared earnings for the second quarter of 2021. It posted revenue of $1.31 billion, up 70.5% YoY, beating the estimates by $40 million.

Ryan Frick’s Dorsal Capital holds 950,000 shares in Zillow Group, Inc. (NASDAQ:Z), worth over $65.03 million. This represents 16.8% of their portfolio. Dorsal Capital’s stake in Zillow Group, Inc. (NASDAQ:Z) decreased by 5% in the second quarter of 2021, the latest data reveals. Catherine D. Wood’s ARK Investment Management is the biggest stakeholder in Zillow Group, Inc. (NASDAQ:Z), with 10.15 million shares worth $1.24 billion.

In addition to Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), analysts are paying attention to Zillow Group, Inc. (NASDAQ:Z).

In its second-quarter, 2021 investor letter Baron Funds, mentioned Zillow Group, Inc. (NASDAQ:Z). Here is what the fund said:

Zillow Group, Inc. operates leading U.S. real estate websites, a mortgage marketplace, and the Zillow Offers home-buying business. Shares were down due to rising mortgage rates and the potential adverse effects on the housing environment. Zillow also issued second quarter revenue guidance that was slightly below Street expectations. Despite this intra-quarter volatility, we continue to believe that Zillow has substantial upside in mortgages and Offers, which can grow its addressable market not only in houses bought/sold but also in leads provided to Zillow Premier Agents.”

7. Twilio Inc. (NYSE:TWLO)

Frick’s Stake Value: $130,073,000
Percentage of Ryan Frick’s 13F Portfolio: 6.07%
Number of Hedge Fund Holders: 98

Twilio Inc. (NYSE:TWLO), located in San Francisco, California, is a cloud communications platform as a service company. It was incorporated in 2008 and is ranked seventh on the list of top 10 stock picks of Ryan Frick’s Dorsal Capital. Twilio Inc. (NYSE:TWLO) shares have offered investors returns exceeding 49.22% over the course of the past 12 months.

On July 30, Baird analyst William Power raised the price target on Twilio Inc. (NYSE:TWLO) to $450 from $430 and kept an “Outperform” rating on the shares. On July 29, Twilio Inc. (NYSE:TWLO) posted earnings for the second quarter of 2021. It declared earnings per share of -$0.11, beating the estimates by $0.02. In addition, the revenue over the period was $668.93 million, up 66.9% YoY, surpassing the predictions by $69.8 million.

Dorsal Capital holds 330,000 shares in Twilio Inc. (NYSE:TWLO) worth over $130.07 million, representing 6.07% of their investment portfolio. The hedge fund has increased its stake in Twilio Inc. (NYSE:TWLO) by 32% in the second quarter of 2021. As of the second quarter of 2021, 98 hedge funds in Insider Monkey’s database of 873 funds held stakes in Twilio Inc. (NYSE:TWLO) compared to 99 funds in the first quarter.

In addition to Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Twilio Inc. (NYSE:TWLO) is one of the top picks of Ryan Frick.

Lakehouse Capital, in its second-quarter 2021 investor letter, mentioned Twilio Inc. (NYSE:TWLO). Here is what the fund said:

“The Fund held 20 positions as of the end of June and exited four during the year (including) Twilio. The companies we exited were sold almost entirely on the basis of their valuations getting stretched well past their norms and to levels where the return profile no longer offered the asymmetric upside that led us to invest in the first place. We dislike selling on valuation as great growth companies are hard to find and letting winners run is an important facet of a winning growth strategy, however, we’re not gluttons for punishment either and in each of those cases we redeployed capital towards other high-quality growth companies with less demanding valuations.”

6. Costco Wholesale Corporation (NASDAQ:COST)

Frick’s Stake Value: $138,485,000
Percentage of Ryan Frick’s 13F Portfolio: 6.46%
Number of Hedge Fund Holders: 54

Costco Wholesale Corporation (NASDAQ:COST) owns and operates a chain of membership-only big-box retail shops. It was founded in 1976 and is placed sixth on the list of top 10 stock picks of Ryan Frick’s Dorsal Capital. Costco Wholesale Corporation (NASDAQ:COST) shares have gained about 33.20% in value over the last 12 months.

On September 9, Morgan Stanley analyst Simeon Gutman raised the price target on Costco Wholesale Corporation (NASDAQ:COST) to $500 from $425 and maintained an “Overweight” rating on the shares.

The hedge fund chaired by Ryan Frick holds 350,000 shares in Costco Wholesale Corporation (NASDAQ:COST) worth $138.49 million. In addition, Dorsal Capital’s stake in Costco Wholesale Corporation (NASDAQ:COST) shares increased by 28% in the second quarter of 2021. Out of the hedge funds being tracked by Insider Monkey, Fisher Asset Management is a leading shareholder in Costco Wholesale Corporation (NASDAQ:COST), with 3.75 million shares worth more than $1.48 billion.

In addition to Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Costco Wholesale Corporation (NASDAQ:COST) is one of the top stocks in Ryan Frick’s portfolio.

ClearBridge Investments, in its first-quarter 2021 investor letter, mentioned Costco Wholesale Corporation (NASDAQ:COST). Here is what the fund said:

“To take a more discretionary stance in retailing and make room for our additional purchases where we see better opportunities, we closed our position in Costco Wholesale. Costco was a big winner during the most restrictive periods of the COVID-19 lockdowns with its focus on staples, larger basket size, necessities and bulk items, and it remains an exceptional retailer in its category, with a sticky subscription base and non-U.S. growth ahead. However, the company is facing very tough comparisons as well as margin pressure in its core business and we believe its valuation has become stretched.”

 

Click to continue reading and see rest of the stocks on this list: Top 5 Stock Picks of Ryan Frick’s Dorsal Capital.

 

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Disclosure: None. Top 10 Stock Picks of Ryan Frick’s Dorsal Capital: Facebook, Snap and More is originally published on Insider Monkey.