Top 10 Stock Picks of Steve Leonard’s Pacifica Capital Investments

Published November 29, 2021 at 7:15 am EST Updated August 19, 2026 at 12:06 pm EDT

In this article, we discuss the top 10 stock picks of Steve Leonard’s Pacifica Capital Investments.

Steve Leonard is the managing principal and founder of Pacifica Capital Investments, having established the investment firm in 1998. Pacifica Capital Investments employs a value-based investment philosophy in public equities, holding a portfolio that is concentrated in well-managed companies. Leonard believes in holding stakes in businesses he understands well, and buying stocks when they are discounted as compared to the intrinsic value.

Steve Leonard graduated from UCLA in 1977, and entered the real estate profession. To benefit from the commercial real estate cycles, Leonard established Pacifica Holding Company in the early 1980s. He had a successful run in the commercial real estate sector for years, via market acquisitions and collaboration with private and institutional investors. When real estate prices started to spike, Leonard exited the market and established Pacifica Capital Investments.

At Pacifica Capital Investments, Leonard manages a portfolio worth over $309 million, as well as discretionary assets under management of more than $467 million. His Q3 portfolio is concentrated in the communications, information technology, finance, and consumer discretionary sectors. The largest holding in Pacifica Capital Investments’ portfolio as of September this year is Berkshire Hathaway Inc. (NYSE:BRK-B), which represents 20.86% of Leonard’s total 13F securities.

Top 10 Stock Picks of Steve Leonard's Pacifica Capital Investments

Steve Leonard of Pacifica Capital

The most notable stocks in Steve Leonard’s Q3 portfolio include Alphabet Inc. (NASDAQ:GOOG), Starbucks Corporation (NASDAQ:SBUX), Apple Inc. (NASDAQ:AAPL), and Wells Fargo & Company (NYSE:WFC), among others discussed in detail below.

Our Methodology

We used Steve Leonard’s Q3 portfolio to pick his top 10 stocks, and the list was compiled according to the value of each holding in the investment portfolio.

Top Stock Picks of Steve Leonard’s Pacifica Capital Investments

10. Berkshire Hathaway Inc. (NYSE:BRK-A)

Pacifica Capital Investments’ Stake Value: $5,348,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 1.72%

Number of Hedge Fund Holders: N/A

Berkshire Hathaway Inc. (NYSE:BRK-A) is one of the top stock picks of Steve Leonard, with Pacifica Capital Investments owning a $5.3 million stake in the company, representing 1.72% of the firm’s Q3 portfolio. Berkshire Hathaway Inc. is a multinational conglomerate holding company headed by the Billionaire Warren Buffett, owning subsidiaries including Dairy Queen, Duracell, and Helzberg Diamonds, among multiple others. The Class A Berkshire Hathaway Inc. stock refers to the originally offered shares by the company, known for their high equity value and the extremely expensive price point.

As a result of the Q3 earnings miss and the persistent supply chain headwinds, Keefe Bruyette analyst Meyer Shields on November 7 kept a Market Perform rating on Berkshire Hathaway Inc. with a $485,000 price target.

As of the third quarter of 2021, the leading Berkshire Hathaway Inc. stakeholder is Bill & Melinda Gates Foundation Trust, with 38.6 million shares worth over $10.5 billion.

In addition to Alphabet Inc., Starbucks Corporation, Apple Inc., and Wells Fargo & Company, Berkshire Hathaway Inc. is a notable stock in Steve Leonard’s Q3 portfolio.

Here is what Black Bear Value Partners has to say about Berkshire Hathaway Inc. in its Q3 2021 investor letter:

“Please see the Q1 letter for our Berkshire on a Napkin investment exercise. We have written on it extensively and will save your eyeballs from extraneous reading. Berkshire is very cheap for owning such high-quality businesses and will continue to grind higher and compound value for us.”

9. CNA Financial Corporation (NYSE:CNA)

Pacifica Capital Investments’ Stake Value: $6,536,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 2.11%

Number of Hedge Fund Holders: 12

CNA Financial Corporation (NYSE:CNA) is an insurance company that offers property and casualty insurance products and services for corporate clients in the U.S., Canada, Europe, and Asia. As of Q3 2021, Pacifica Capital Investments holds 155,762 shares in CNA Financial Corporation, worth $6.53 million, representing 2.11% of the firm’s Q3 investments.

CNA Financial Corporation on November 1 declared a cash dividend of $0.38 per share, payable on December 2 to shareholders on record as of November 15. The company also reported a Q3 EPS of $0.87, beating estimated EPS of $0.60 by $0.27.

As of the third quarter of 2021, 12 hedge funds were bullish on CNA Financial Corporation, down from 13 funds in the preceding quarter. The total stake value reported by these hedge funds in Q3 was $63.8 million. Arrowstreet Capital is the leading stakeholder in CNA Financial Corporation as per Insider Monkey’s records, with 778,221 shares valued at $32.6 million.

8. Alliance Data Systems Corporation (NYSE:ADS)

Pacifica Capital Investments’ Stake Value: $13,801,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 4.45%

Number of Hedge Fund Holders: 31

Alliance Data Systems Corporation (NYSE:ADS) is an Ohio-based company offering private label credit cards, direct marketing services, and loyalty programs. Pacifica Capital Investments owns a $13.8 million stake in Alliance Data Systems Corporation as of September this year, which accounts for 4.45% of the firm’s Q3 portfolio.

The leading Alliance Data Systems Corporation stakeholder is Palestra Capital Management, with 3.5 million shares worth $354.5 million. Overall, 31 hedge funds in the database of Insider Monkey were long Alliance Data Systems Corporation, with a total stake value of $1.11 billion.

Alliance Data Systems Corporation posted its Q3 results on October 28. EPS in the period totaled $4.47, beating analysts’ estimates of $3.29 by $1.18. The $1.10 billion revenue also exceeded estimates by $12.94 million.

Truist analyst Andrew Jeffrey on November 1 lowered the price target on Alliance Data Systems Corporation to $115 from $130 and kept a Buy rating on the shares, following the solid Q3 results.

Here is what Alphyn Capital Management has to say about Alliance Data Systems Corporation in their Q4 2020 investor letter:

“My investment in Alliance Data Systems was a mistake, as mentioned in my Q1 letter. I allowed myself to be drawn to management’s narrative and was not critical enough of their excuses for poor performance. I was also heavily influenced by the notion that the valuation appeared cheap on a price-to-free cash flow basis. As I should have better remembered from my investment banking days in the early 2000’s when I was involved with IPOs, the stock market seeks growth and does not attribute high terminal value to stagnating companies, especially when management teams have lost the market’s confidence. While this seems obvious in hindsight, the lesson is to act more decisively in cutting a “bad” position in the future.”

7. Nordstrom, Inc. (NYSE:JWN)

Pacifica Capital Investments’ Stake Value: $14,791,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 4.77%

Number of Hedge Fund Holders: 25

Nordstrom, Inc. (NYSE:JWN) is an American luxury department store chain, offering clothing, footwear, accessories, cosmetics, home goods, and fragrances. Steve Leonard, via Pacifica Capital Investments, holds 559,211 shares in Nordstrom, Inc. as of September 2021, valued at $14.7 million, representing 4.77% of the firm’s Q3 portfolio.

As of Q3 2021, 25 hedge funds in the database of Insider Monkey’s 867 elite funds were bullish on Nordstrom, Inc., down from 31 in the previous quarter. Brett Barakett’s Tremblant Capital is the leading Nordstrom, Inc. stakeholder, with 4.44 million shares worth $117.6 million.

Citi analyst Paul Lejuez lowered the price target on Nordstrom, Inc. to $31 from $39 on October 22, keeping a Neutral rating on the shares.

6. Alibaba Group Holding Limited (NYSE:BABA)

Pacifica Capital Investments’ Stake Value: $18,748,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 6.05%

Number of Hedge Fund Holders: 115

Alibaba Group Holding Limited (NYSE:BABA), a Chinese multinational e-commerce corporation, is one of Steve Leonard’s top stock picks as of September 2021. Leonard’s Pacifica Capital Investments owns 126,632 shares in Alibaba Group Holding Limited, valued at $18.7 million, representing 6.05% of the firm’s Q3 portfolio.

Alibaba Group Holding Limited posted its Q3 results on November 18. EPS in the period equaled $1.75, missing estimates by -$0.19. The $31.43 billion revenue also missed analysts’ consensus estimates by -$638.61 million. Benchmark analyst Fawne Jiang, on November 19, lowered the price target on Alibaba Group Holding Limited to $245 from $270 and kept a Buy rating on the shares post the Q3 earnings.

Fisher Asset Management is the biggest Alibaba Group Holding Limited stakeholder as of September this year, with a position worth over $2.1 billion. Overall, 115 hedge funds in Insider Monkey’s database of elite funds reported owning stakes valued at $10.2 billion in Alibaba Group Holding Limited.

In addition to Alphabet Inc., Starbucks Corporation, Apple Inc., and Wells Fargo & Company, Alibaba Group Holding Limited is a notable stock in Steve Leonard’s Q3 portfolio.

Here is what Polen Global Growth has to say about Alibaba Group Holding Limited in its Q3 2021 investor letter:

“First, on managing risk. We have held positions in Alibaba since the inception of the Polen Global Growth Portfolio in 2015, and it has performed very well during that period. We invested via the variable interest entity (VIE) structure, given that it is the only channel for foreign capital to invest in the company. Investing in a VIE involves a contract for ownership in a business (that cannot be owned by non-Chinese investors), rather than direct equity ownership, as we have in all other businesses in the Portfolio. The Chinese government has never explicitly endorsed nor condemned the VIE structure, so a certain amount of risk remains.

From our point of view, China has always had the capability to appropriate businesses from foreign owners but had not demonstrated the will to do so. We felt that changed when the Chinese government enacted a series of regulatory policies that turned for-profit, after-school tutoring companies into non-profit entities. While a logical argument could be made that such actions are not likely to bleed over into China’s tech sector, we think increased regulation and the potential for government-directed capital allocation from these businesses could lead to lower-than expected earnings growth.

To be clear, we are not “making a call” on China. We believe that the risk of such draconian regulation of China’s tech sector is unlikely. That said, given our global opportunity set, we decided to reallocate capital into businesses likely to produce similar earnings growth over the next five years with a greater degree of certainty. We still believe that Alibaba is a great business and could be owners of one or both in the future, but we felt there were easier ways to achieve our objective at the present time.”

5. Jefferies Financial Group Inc. (NYSE:JEF)

Pacifica Capital Investments’ Stake Value: $29,370,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 9.49%

Number of Hedge Fund Holders: 37

Jefferies Financial Group Inc. (NYSE:JEF) is a New York-based financial services company that specializes in investment banking, institutional brokerage, securities research, mergers and acquisitions, corporate restructuring, and asset management. Steve Leonard, via Pacifica Capital Investments, holds a $29.3 million stake in Jefferies Financial Group Inc. as of the third quarter, which accounts for 9.49% of the firm’s investment portfolio.

As of Q3 2021, 37 hedge funds in the database of Insider Monkey were bullish on Jefferies Financial Group Inc., with a stake value of $684 million. This is compared to 29 hedge funds in the preceding quarter, owning stakes valued at $698 million. The leading stakeholder in Jefferies Financial Group Inc. is Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, with 6.79 million shares worth over $252 million.

Jefferies Financial Group Inc. posted its Q3 results on September 30. EPS in the period came in at $1.50, beating estimates by $0.50. The Q3 revenue equaled $1.94 billion, exceeding estimates by $196.25 million.

On November 16, Keefe Bruyette analyst Michael Brown downgraded Jefferies Financial Group Inc. to Market Perform from Outperform with a price target of $46, citing the stock’s valuation as the reason for the downgrade.

Here is what GoodHaven Funds has to say about Jefferies Financial Group Inc. in its Q2 2021 investor letter:

“Jefferies Financial was our next biggest dollar gainer in the period, yet also remains undervalued in our opinion. We are running out of accolades to describe the string of great results at Jefferies. In their just reported six-month period, the core business earned over 35% return on tangible equity (ROTE) and more than doubled pre-tax income versus the prior year’s six months. Book value and tangible book value/share are now $40.77 and $30.29 respectively. Students of capital allocation should study Rich Handler. Over the last three years, Jefferies has repurchased 123 million shares for $2.6 billion at an average price of $21.04/share. Astute repurchases materially benefit remaining owners. While it’s reasonable to expect some normalization of Jefferies recent great results, Jefferies has gained market share in its core business and has a culture adept at finding new niches to earn good returns, while helping clients, and when existing niches become less profitable. Even if a more normalized ROTE is in store, we think that level will be materially higher than it has been in the recent past.”

4. Alphabet Inc. (NASDAQ:GOOG)

Pacifica Capital Investments’ Stake Value: $32,074,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 10.36%

Number of Hedge Fund Holders: 156

Alphabet Inc., a top US tech company, represents 10.36% of Leonard’s Pacifica Capital Investments’ Q3 portfolio, with the firm holding a $32 million stake in the company. Alphabet Inc. is the parent company of Google and Google subsidiaries, created in 2015 with the intention of increasing transparency and accountability throughout the organization.

Alphabet Inc. posted on October 26 its Q3 results. EPS for the quarter came in at $27.99, topping estimates by $4.75. The $65.12 billion revenue exceeded estimated revenue by $1.83 billion. Jefferies analyst Brent Thill raised the price target on Alphabet Inc. from $3,325 to $3,500 and kept a Buy rating on the stock, following the strong Q3 earnings beat.

One of the leading Alphabet Inc. stakeholders is Harris Associates, with 1.87 million shares valued at over $5 billion. Overall, 156 hedge funds in the database of Insider Monkey reported owning stakes worth $34.95 billion in Alphabet Inc. as of September this year.

Here is what Oakmark Funds has to say about Alphabet Inc. in its Q3 2021 investor letter:

“Alphabet, a U.S. communication services provider, was once again a top contributor for the quarter, solidifying its rank as a top contributing stock for the one-year period. The company’s financial results repeatedly exceeded expectations. In particular, its revenue grew faster than expected and its margin trends improved across all segments. In addition, management has executed $24.4 billion of stock repurchases so far in 2021. After further examination, we recently increased our estimate of Alphabet’s intrinsic value based on the company’s better than expected operating leverage and its notable efficiency improvements. As a result, we continue to believe that Alphabet is trading at a significant discount to its intrinsic value.”

3. Starbucks Corporation (NASDAQ:SBUX)

Pacifica Capital Investments’ Stake Value: $44,643,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 14.42%

Number of Hedge Fund Holders: 58

Starbucks Corporation, the largest American coffeehouse chain, posted a Q3 EPS of $1.00 on October 28, in line with analysts’ consensus estimates. The $8.15 billion revenue for the third quarter missed estimates by -$77.46 million.

Steve Leonard’s Pacifica Capital Investments owns 404,709 shares in Starbucks Corporation as of September this year, worth $44.6 million, representing 14.42% of the firm’s total investments.

As of Q3 2021, 58 hedge funds tracked by Insider Monkey were bullish on Starbucks Corporation, down from 63 in the preceding quarter, with a total stake value of $4.8 billion. Terry Smith’s Fundsmith LLP is the leading Starbucks Corporation stakeholder, with a $1.18 billion stake in the company.

Argus analyst John Staszak on November 4 downgraded Starbucks Corporation to Hold from Buy, citing rising labor costs, supply chain challenges, and increased competition.

Here is what Polen Capital has to say about Starbucks Corporation in its Q2 2021 investor letter:

“For Starbucks, we believe the underlying businesses for the company remain strong. Starbucks has grappled with the impact of the pandemic, but results have continued to show an ongoing post-pandemic recovery.”

2. Five Below, Inc. (NASDAQ:FIVE)

Pacifica Capital Investments’ Stake Value: $62,525,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 20.20%

Number of Hedge Fund Holders: 40

Five Below, Inc. (NASDAQ:FIVE) was upgraded to Overweight from Neutral by Morgan Stanley analyst Simeon Gutman on October 7, who kept an unchanged price target of $230 on the stock. He stated that the stock is trading at a discount due to freight and inventory concerns, which are blown out of proportion.

Five Below, Inc., an American discount store selling products under $5, is one of Steve Leonard’s top stock picks as of Q3. Pacifica Capital Investments holds a $62.5 million stake in the company, which accounts for 20.2% of the firm’s total 13F securities.

At the end of the third quarter of 2021, Balyasny Asset Management was one of the largest stakeholders of Five Below, Inc., with a $90.6 million position in the company. Overall, 40 hedge funds were bullish on Five Below, Inc., down from 42 in the preceding quarter.

Here is what Harding Loevner has to say about Five Below, Inc. in their Q4 2020 investor letter:

“Throughout the year, we tried methodically to rebalance the portfolio between “stay at home” and “return to normal” whenever the market appeared too pessimistic or optimistic about the sustainability of recent, pandemic-driven trends. As the year went on, we found ourselves tilting more towards “return to normal.” We established a new position in US retailer Five Below, a discount chain built around a rather simple concept: fill nondescript big-box locations with as many as possible items priced under US$5 that can tickle the imagination of an American teen or tween. As “pre-2020” as that may sound, we were impressed by the company’s quick resumption of strong same-store sales growth after the lockdowns early in the year. Clearly, Five Below offers a value and entertainment proposition that e-commerce is not able to satisfy and which we can see ourselves “sitting” on potentially for years to come.”

1. Berkshire Hathaway Inc. (NYSE:BRK-B)

Pacifica Capital Investments’ Stake Value: $64,572,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 20.86%

Number of Hedge Fund Holders: 106

Berkshire Hathaway Inc. Class B shares were first issued in 1996, being affordably priced and having a modest share of equity value in the company. Berkshire Hathaway Inc. posted its Q3 results on November 6, with EPS for the quarter being $2.87, missing estimates by -$0.06. The $70.58 billion revenue was up 11.99% from the prior-year quarter, outperforming estimates by $163.14 million.

As of the third quarter, Leonard’s Pacifica Capital Investments holds a $64.5 million stake in Berkshire Hathaway Inc., which is the largest holding in the firm’s portfolio. The stock accounts for 20.86% of Steve Leonard’s Q3 portfolio.

Of the 867 hedge funds tracked by Insider Monkey as of September this year, 106 funds reported owning stakes in Berkshire Hathaway Inc., down from 116 in the previous quarter. The total value of these stakes amounted to $19.4 billion.

You can also take a look at 10 European Stocks to Buy According to Tom Russo’s Hedge Fund and 10 Small-Cap Stocks to Buy According to Australian Billionaire Kerr Neilson.

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