In this article, we reviewed Alexis Fortune’s investment philosophy and portfolio management strategies. We also examined the top 7 stocks to buy according to Alexis Fortune’s Blacksheep Fund Management.
Blacksheep Fund Management, led by Alexis Fortune, manages a portfolio of 13F securities worth more than $754 million. The Dublin-based hedge fund seeks to generate market-beating returns through investments in high-quality growth companies that are positioned to benefit from digitization and technological innovations.
With this philosophy, the firm spread its investments in internet companies across four sectors as of the second quarter. Following record gains in 2020, the tech and internet stocks faltered in the first half of 2021 as investors shifted to value stocks amid vaccine rollouts as well as economic recovery and stimulus packages.
Alexis Fortune, however, saw the dip in high-quality tech companies as a buying opportunity. His hedge fund added significantly to its existing tech stocks holdings such as Amazon.com, Inc. (NASDAQ:AMZN), Tucows Inc. (NASDAQ:TCX), SS&C Technologies Holdings, Inc., Netflix, Inc. (NASDAQ:NFLX), and KKR & Co. Inc. (NYSE:KKR).
As of June, internet services and infrastructure provider GoDaddy Inc. (NYSE:GDDY) was the largest stock holding of Alexis Fortune’s Blacksheep Fund Management while Alphabet Inc. (NASDAQ:GOOGL) is ranked second with $138 million worth of position.
Photo by Marga Santoso on Unsplash
Our Methodology
For this article, we analyzed Blacksheep Fund Management’s 13F stock portfolio as of June.
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With this context in mind, let’s now discuss the top 7 stocks to buy according to Alexis Fortune’s Blacksheep Fund Management.
Top 7 Stocks to Buy According to Alexis Fortune’s Blacksheep Fund Management
7. Amazon.com, Inc. (NASDAQ:AMZN)
Blacksheep Fund Management’s Stake Value: $67.5 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 8.95%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. stock price appreciated significantly in the past couple of years, and Alexis Fortune’s Blacksheep Fund Management has benefited from that rally since the final quarter of 2019. The Dublin-based hedge fund has raised its existing stake in Amazon.com, Inc. by 15% during the June quarter to 19,628 shares. It is likely that Amazon.com, Inc.’s (NASDAQ:AMZN) share price will extend its bull-run going forward amid its business diversification plans as well as consumers’ shift to online platforms.
In the third quarter investor letter, Polen Capital, an investment management firm, said that Amazon.com, Inc. has exceptional long-term growth potential. Here is what Polen Capital stated about Amazon.com, Inc.:
“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.”
6. Tucows Inc. (NASDAQ:TCX)
Blacksheep Fund Management’s Stake Value: $78.3 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 10.38%
Number of Hedge Fund Holders: 8
Tucows Inc., the small-cap internet services and infrastructure company, has been a member of Blacksheep Fund Management’s 13F portfolio since the end of 2019. The firm has also benefited from its position in Tucows Inc. because shares of the Canada-based internet services provider surged significantly during the pandemic year and continued to grow into 2021.
Of the 873 hedge funds tracked by Insider Monkey, 8 were bullish on Tucows Inc. as of June. Leading shareholders in the company are Blacksheep Fund Management and Renaissance Technologies.
Like Amazon.com, Inc., GoDaddy Inc., and Alphabet Inc., Tucows Inc. is one of the top stocks to buy according to Alexis Fortune’s Blacksheep Fund Management.
5. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
Blacksheep Fund Management’s Stake Value: $87.1 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 11.55%
Number of Hedge Fund Holders: 49
Alexis Fortune’s hedge fund first initiated a position in SS&C Technologies Holdings, Inc. during the second quarter of 2020 and lifted its position by 20% in the June quarter of 2021. SS&C Technologies Holdings, Inc. is a mid-cap software products and software-enabled services provider to the healthcare and financial services industries. The share price of SS&C Technologies Holdings, Inc. rose 25% in the last twelve months. Furthermore, the company offers a dividend yield of less than 1%.
SS&C Technologies Holdings, Inc. was in 49 hedge funds’ portfolios as of June. Cantillon Capital Management and Skylands Capital are the leading stakeholders in the company, according to the data tracked by Insider Monkey.
4. Netflix, Inc. (NASDAQ:NFLX)
Blacksheep Fund Management’s Stake Value: $88.5 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 11.73%
Number of Hedge Fund Holders: 113
Alexis Fortune’s strategy of initiating a position in Netflix, Inc. early this year and raising that position by 413% in the June quarter contributed strongly to the overall performance of Blacksheep Fund Management. This is because shares of Netflix, Inc. are up 27% year to date, driven by robust subscriber growth along with the rollout of gaming service. Moreover, Netflix, Inc. reported stronger than expected third-quarter revenue and added a net 4.38 million global streaming subscribers compared to 2.2 million additions in the year-ago period.
Like Netflix, Inc., GoDaddy Inc., Amazon.com, Inc., Tucows Inc., SS&C Technologies Holdings, Inc. and KKR & Co. Inc. are some of the notable stocks in Fortune’s Q2 portfolio.
In the third quarter investor letter, Ensemble Capital, an investment management firm, stated that new content velocity will support the share price momentum of Netflix, Inc.. Here is what Ensemble Capital said about Netflix, Inc.:
“Netflix stock had a disappointing first half of 2021 performance, treading water while the S&P 500 rallied, after a very strong 67% return in 2020. It benefited from the global pandemic in 2020, signing on 36.6 million new subscribers vs the typical 25 million or so it typically does. Total subscribers exceeded 200 million, up 22% over the previous year. However, in the first half of 2021, new subscriber additions slowed substantially, totaling only 5.5 million due to slower new content additions impacted by production delays, a resumption of outdoor activity as people everywhere adjusted to living with COVID, and the impact of a “pull-forward effect” on subscriber growth in last year’s very strong results. The third quarter saw new content velocity start to pick up, which is usually what drives new subscribers to the service, with expectations of an even stronger content slate going into the final quarter of the year, causing the stock to increase 15% in the quarter.”
3. KKR & Co. Inc. (NYSE:KKR)
Blacksheep Fund Management’s Stake Value: $123 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 16.36%
Number of Hedge Fund Holders: 54
KKR & Co. Inc. has also significantly boosted Blacksheep’s overall returns since the hedge fund first initiated its position in 2019. The share price of KKR & Co. Inc. is up 139% in the last twelve months alone. The company also offers dividends to investors, which makes it a good stock to hold for the long term. KKR & Co. Inc. is of the top stocks to buy according to Alexis Fortune’s Blacksheep Fund Management.
The number of long hedge fund bets stood at 54 as of June compared to 57 positions in the previous quarter. Blacksheep Fund Management lifted its existing position in KKR & Co. Inc. by 4% during the June quarter. David Harding’s Winton Capital Management is the leading stakeholder in the company.
2. Alphabet Inc. (NASDAQ:GOOGL)
Blacksheep Fund Management’s Stake Value: $138.4 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 18.35%
Number of Hedge Fund Holders: 190
Google parent Alphabet Inc. is one of the top stocks to buy for the long term. Blacksheep increased its existing stake in Alphabet Inc. by 51% recently, making it the second-largest stock holding in its 13F portfolio. The share price of Alphabet Inc. surged 78% since the beginning of this year.
Alger, an investment management firm, mentioned a few stocks including Alphabet Inc. in the third quarter investor letter. Here is what Alger stated:
“Alphabet Inc. was among the top contributors to performance during the third quarter. Alphabet is a leading internet search provider and is a beneficiary in the share shift of advertising dollars from traditional mediums like television, radio and newspapers to digital platforms. The company is a leader in implementing Al, autonomous vehicles and cloud computing it and owns the highly trafficked YouTube property. Alphabet contributed to performance due to a strong quarterly report highlighted by revenue growth that beat consensus expectations across segments. The company’s core search revenues have increased 10% over the past two years, with cloud computing increasing 8%. Results from YouTube also exceeded expectations. When discussing quarterly results, Alphabet management said retail, entertainment and travel were end markets that were particularly strong. The fixed cost structure of Alphabet’s search service resulted in profitability resulting from the increase in revenues being better than expected.”
1. GoDaddy Inc. (NASDAQ:GDDY)
Blacksheep Fund Management’s Stake Value: $179 million
Percentage of Blacksheep Fund Management’s 13F Portfolio: 22.64%
Number of Hedge Fund Holders: 39
GoDaddy Inc. (NASDAQ:GDDY), an internet infrastructure structure provider, continues to gain Alexis Fortune’s confidence over the past couple of quarters. His firm increased its stake in GoDaddy Inc. (NASDAQ:GDDY) by 25% to 22.64% of the overall portfolio as of June. GoDaddy Inc. is among the top stocks to buy after the recent selloff amid its attractive valuation along with a double-digit revenue and cash flow generation potential.
Godaddy Inc. (NYSE:GDDY) was in 39 hedge funds’ portfolios as of June. Winton Capital Management and Columbus Point were the leading stakeholders in the company.
You can also take a look at Best High Risk Stocks to Buy Right Now and Berkshire Hathaway Stock Portfolio: 10 Long-Term Stock Picks.
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This article is originally published at Insider Monkey.
