In this article, we discuss the top 10 stocks to buy according to Charles Pollnow’s Triple Frond Partners.
Charles Pollnow is the manager of Triple Frond Partners LLC, a Seattle-based hedge fund. As of the second quarter of 2021, Triple Frond Partners LLC manages a portfolio of 11 stocks with a value of $921.93 million in 13F securities. The portfolio has increased in its value from $806.31 million as of Q1 of 2021.
Some of the notable stocks in Triple Frond Partners’ Q2 portfolio are Visa Inc. (NYSE:V), Alphabet Inc. (NASDAQ:GOOG), and Moody’s Corporation (NYSE:MCO).
Visa Inc., a San Francisco-based company, provides digital payment services. Triple Frond Partners holds 453,500 shares in Visa Inc., valued at $106 million. In September, JPMorgan Chase & Co. raised its price target on Visa Inc. to $267 from $249, keeping an ‘Overweight’ rating on the shares.
Triple Frond has a major stake in Moody’s Corporation. In September 2021, Oppenheimer raised its price target on Moody’s Corporation to $418 from $406, keeping an ‘Outperform’ rating on the shares.
Clearly, Pollnow’s focus has been on the tech sector in the second quarter, and justifiably so.
The technology industry and communication companies have benefitted the most from the COVID-19 as Nasdaq Composite delivered a 43.64% return in 2020, the highest since 2009 and beating the S&P’s 16.26% gain. In March 20201, Forbes reported that tech-based hedge funds are predominant in the market. The Custom Eurekahedge Tech-Focused Hedge Fund Index has delivered a return of 12.22% per annum since 2012, beating returns from value funds at 4.72%, long and short equities funds at 6.24%, and average international hedge funds with 5.89%.
Our Methodology
We analyzed the second-quarter portfolio of Triple Frond Partners and picked the top 10 stocks for this article. The value of stakes of Triple Frond Partner in each company is also mentioned. We have also added the number of hedge funds holders as tracked by Insider Monkey in the second quarter of 2021.
Why should we pay attention to hedge funds’ 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 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 SPY. Our stock picks outperformed the market by 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.
Top 10 Stocks to Buy According to Charles Pollnow’s Triple Frond Partners
10. Liberty Broadband Corporation (NASDAQ:LBRDA)
Triple Frond Partner’s Stake Value: $31.672 million
Percent of Triple Frond Partner’s Portfolio: 3.43%
Number of Hedge Fund Holders: 28
Liberty Broadband Corporation (NASDAQ:LBRDA) is based in Colorado and ranks tenth on the list of top stocks to buy according to Charles Pollnow’s Triple Frond Partners. Liberty Broadband Corporation operates in the communication industry and provides broadband, cable TV, video, and voice services.
In Q2 2021, Triple Frond Partners holds 182,379 shares in Liberty Broadband Corporation, worth $31.672 million. Thus, Liberty Broadband Corporation accounts for 3.43% of the portfolio of Charles Pollnow’s Triple Frond Partner.
In August 2021, Pivotal Research raised its price target on Liberty Broadband Corporation from $211 to $267.
As of Q2 2021, 28 hedge funds tracked by Insider Monkey have stakes in Liberty Broadband Corporation, worth more than $904 million. This number of hedge funds has increased from 23 in Q1 2021.
Like Visa Inc., Alphabet Inc. and Moody’s Corporation, Liberty Broadband Corporation is a notable stock pick in Triple Frond Partners’ Q2 portfolio.
9. Alibaba Group Holding Limited (NYSE:BABA)
Triple Frond Partner’s Stake Value: $38.65 million
Percent of Triple Frond Partner’s Portfolio: 4.19%
Number of Hedge Fund Holders: 146
Alibaba Group Holding Limited (NYSE:BABA) is based in Hangzhou, China, and provides Internet Retail services through its subsidiaries. Alibaba Group Holding Limited provides technology for e-commerce stores and marketing services for merchants, businesses, and retailers to reach customers.
As of the second quarter of 2021, Triple Frond Partners holds 170,450 shares of the company worth $38.65 million. Alibaba Group Holding Limited represents 4.19% of the Triple Frond Partners portfolio of 13F securities.
As of Q2 2021, 146 hedge funds tracked by Insider Monkey have stakes in Alibaba Group Holding Limited, worth more than $16.79 billion.
8. Guidewire Software, Inc. (NYSE:GWRE)
Triple Frond Partner’s Stake Value: $44.61 million
Percent of Triple Frond Partner’s Portfolio: 4.83%
Number of Hedge Fund Holders: 27
Guidewire Software, Inc. (NYSE:GWRE) ranks eighth on our list of top stocks to buy according to Charles Pollnow’s Triple Frond Partners. Guidewire Software, Inc. is based in California and provides services in Software Technology. Guidewire Software, Inc. develops and sells software for property and casualty insurers.
Triple Frond Partners LLC has 395,800 shares in Guidewire Software, Inc., worth $44.61 million. Thus, Guidewire Software, Inc. accounts for 4.83% of the portfolio of Charles Pollnow’s Triple Frond Partners.
In September 2021, JPMorgan Chase & Co. raised its price target on Guidewire Software, Inc. to $160 from $140.
As of Q2 2021, 27 hedge funds tracked by Insider Monkey have stakes in Guidewire Software, Inc., worth more than $1.84 billion.
Like Visa Inc., Alphabet Inc. and Moody’s Corporation, Guidewire Software, Inc. is a notable stock pick in Triple Frond Partners’ Q2 portfolio.
Wasatch Global Investors, in its Q1 2021 investor letter, mentioned Guidewire Software, Inc. (NYSE: GWRE). Here is what the fund said:
“Guidewire Software, Inc. (GWRE) was another large detractor. The company provides enterprise software for the property and casualty insurance industry. The software supports collaborative workflow, cooperation with external partners and rule-based decision making—all of which characterize modern underwriting and claims operations. Guidewire’s InsuranceSuite platform allows insurance-industry customers to manage claims, policies and billing functions. Other modules can be added to assist in data management, analytics and digital engagement. We believe Guidewire will eventually be well-positioned to benefit as insurance companies increasingly replace their core (usually on-premises) legacy software with centralized, cloud-based offerings. In the shortterm, however, Guidewire has seen some challenges with its move to the cloud. We think these challenges, along with the broad correction among technology names, accounted for the stock-price decline.”
7. Facebook, Inc. (NASDAQ:FB)
Triple Frond Partner’s Stake Value: $62 million
Percent of Triple Frond Partner’s Portfolio: 6.83%
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is based in California and provides communication services through its portfolio of connectivity applications, including Messenger and WhatsApp.
As of Q2 2021, Triple Frond Partners holds 181,100 shares in Facebook, Inc., valued at $62 million. Facebook, Inc. represents 6.83% of Triple Frond Partners’ portfolio of 13F securities. Triple Frond Partners has increased its activity in Facebook, Inc. by 22% in Q2 2021.
As of Q2 2021, 266 hedge funds tracked by Insider Monkey have stakes in Facebook, Inc., worth more than $42 billion. This number of hedge funds has increased from 257 in Q1 2021.
Like Visa Inc., Alphabet Inc. and Moody’s Corporation, Facebook, Inc. is a notable stock pick in Triple Frond Partners’ Q2 portfolio.
6. Microsoft Corporation (NASDAQ:MSFT)
Triple Frond Partner’s Stake Value: $67.74 million
Percent of Triple Frond Partner’s Portfolio: 7.34%
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ:MSFT) ranks sixth on our list of top stocks to buy according to Charles Pollnow’s Triple Frond Partners. Microsoft Corporation is a Washington-based company providing services in Software Technology. Microsoft Corporation develops, licenses, sells software, services, and devices, and offers aftersales support.
As of the second quarter of 2021, Triple Frond Partners has 250,050 shares in Microsoft Corporation, valued at $67.74 million. Microsoft Corporation accounts for 7.34% of the 13F portfolio of Charles Pollnow’s Triple Frond Partners LLC.
As of Q2 2021, 238 hedge funds tracked by Insider Monkey have stakes in Microsoft Corporation, worth more than $62.46 billion.
In its Q2 2021 investor letter, Baron Opportunity Fund highlighted a few stocks and Microsoft Corp. is one of them. Here is what the fund said:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constantcurrency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”
5. TransDigm Group Incorporated (NYSE:TDG)
Triple Frond Partner’s Stake Value: $83 million
Percent of Triple Frond Partner’s Portfolio: 9.01%
Number of Hedge Fund Holders: 57
TransDigm Group Incorporated (NYSE:TDG) is based in Ohio and works in the Aerospace & Defense Industry. TransDigm Group Incorporated manufactures and sells aircraft components in the US and abroad. TransDigm Group Incorporated ranks 5th on the list of top stocks according to Charles Pollnow’s Triple Frond Partners.
As of Q2 2021, Triple frond Partners holds 128,394 shares in TransDigm Group Incorporated worth $83 million. TransDigm Group Incorporated constitutes 9.01% of the hedge fund’s 13F portfolio. Compared to Q1 2021, the fund’s activity has increased in TransDigm Group Incorporated by 13% in Q2 2021.
As of Q2, 2021, 57 hedge funds have more than $67.35 billion worth of stakes in TransDigm Group Incorporated, as tracked by Insider Monkey.
4. Visa Inc. (NYSE:V)
Triple Frond Partner’s Stake Value: $106 million
Percent of Triple Frond Partner’s Portfolio: 11.52%
Number of Hedge Fund Holders: 62
Visa Inc. ranks 4th on our list of top stocks by Charles Pollnow. Visa Inc. is a San Francisco-based company providing Financial Services. Visa Inc. provides a digital payment gateway to consumers, merchants, businesses, and institutions.
As of Q2 2021, Triple Frond Partners holds 453,500 shares in Visa Inc., valued at $106 million. Visa Inc. accounts for 11.52% of the portfolio of Charles Pollnow’s Triple Frond Partners.
Visa Inc. has generated a net income of $2.57 billion in Q2 2021, increasing from $2.37 billion in the same quarter last year. The year-on-year growth of quarterly revenue is recorded to be 26.7%. Visa Inc. reported an EPS of $1.49, beating the market consensus by $0.14 in Q2 2021. In September, Visa announced a strategic partnership in the Asia Pacific with Ascenda, the loyalty technology company. In September 2021, JPMorgan Chase & Co. raised its firm’s price target on Visa Inc. to $267 from $249, keeping an ‘Overweight’ rating on the shares.
As of Q2, 2021, 62 hedge funds have more than $27.6 billion worth of stakes in Visa Inc., as tracked by Insider Monkey.
3. Moody’s Corporation (NYSE:MCO)
Triple Frond Partner’s Stake Value: $108.2 million
Percent of Triple Frond Partner’s Portfolio: 11.73%
Number of Hedge Fund Holders: 44
Moody’s Corporation is based in New York, the US, and provides financial services through its risk assessment segments.
As of Q2 2021, Triple Frond Partners has 298,608 shares in the Moody’s Corporation, worth $108.2 million. Moody’s Corporation accounts for 11.73% of the total 13F portfolio of Triple Frond Partners.
In September 2021, Oppenheimer raised its price target on Moody’s Corporation to $418 from $406, keeping an ‘Outperform’ rating on the shares.
As of Q2, 2021, 44 hedge funds have more than $16 billion worth of stakes in Moody’s Corporation, as tracked by Insider Monkey. This number has increased from 55 hedge funds with a value of $13.7 billion in Q1 of 2021.
In the Q2 2021 investor letter of Qualivian Investment Partners, the fund mentioned Moody’s Corporation. Here is what the fund said:
“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”
2. Alphabet Inc. (NASDAQ:GOOG)
Triple Frond Partner’s Stake Value: $123 million
Percent of Triple Frond Partner’s Portfolio: 13.35%
Number of Hedge Fund Holders: 155
Alphabet Inc. is based in California and operates as an advertising company. Alphabet Inc. has operations in the Americas, Middle East, Europe, and Asia. Alphabet Inc. runs its operations in segments like Google Services, Google Cloud, and Other Bets.
In the Q2 of 2021, Triple Frond Partners owned 49,120 shares worth $123 million. Alphabet Inc. accounts for 13.35% of the hedge fund’s portfolio of 13F securities.
In September 2021, Goldman Sachs initiated coverage of Alphabet with a ‘Buy’ rating and a $3,350 price target.
In the Q2 2021 investor letter of Polen Capital, the fund mentioned Alphabet Inc.. Here is what the fund said:
“Alphabet was the top contributor to our return for the second consecutive quarter. The company has over $1 trillion market capitalizations. Yet, based on first quarter 2021 results, GOOG is currently still growing revenue at over 30% organically! Alphabet has generated earnings and intrinsic value growth for many years, driven largely by the mostly free services the company provide to people who can easily choose to stop using them and spend their time elsewhere.
That said, we are regularly asked about the perceived high regulatory risk around Alphabet. We examine risks to businesses and, in particular, regulatory risks through a lens of risk exposure versus actual risk. However, we do not believe risk exposure is the same as actual risk…” (Click here to see the full text)
1. Charter Communications, Inc. (NASDAQ:CHTR)
Triple Frond Partner’s Stake Value: $229.08 million
Percent of Triple Frond Partner’s Portfolio: 24.84%
Number of Hedge Fund Holders: 75
Charter Communications, Inc. (NASDAQ:CHTR) tops our list of top 10 stocks to buy according to Charles Pollnow’s Triple Frond Partners. Charter Communications, Inc. is based in Connecticut, United States, and specializes in communication services such as broadband internet and cable operator services for residential and commercial customers. The company has over 31 million customers and serves in 41 states.
Charles Pollnow’s Triple Frond Partners holds 317,529 shares worth $229 million in Charter Communication, accounting for 24.84% of the total 13F portfolio in the second quarter of 2021.
Charter Communications, Inc. generated revenue of $12.8 billion in the Q2 of 2021, increasing from $11.69 billion in the same quarter last year. Charter Communications, Inc. reported an EPS of $5.29, beating the market consensus of $4.78 in Q2 2021. In August 2021, Pivotal Research raised its price target on Charter Communications Inc. to $1,000 from $820, keeping a ‘Buy’ rating on the shares.
As of Q2 of 2021, 75 hedge funds as tracked by Insider Monkey have stakes in Charter Communications, Inc., valued at $19.48 billion.
You can also take a peek at 10 Best High-Yield Dividend Stocks According to Billionaire Mario Gabelli and 10 Best Safe Dividend Stocks According to Billionaire Dan Loeb.
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This article is originally published at Insider Monkey.
