In this article, we will be taking a look at the top 10 stock picks of Jeffrey Diehl’s Adams Street Partners.
Jeffrey Diehl is the current head of investments and managing partner at Adam Street Partners. Having joined the firm back in 2000 as a partner, not only does he oversee the overall process and strategies that the investment team develops, he is also responsible for the management of the firm. He is part of the Growth Equity Investment Team where the focus is on companies which are growth-oriented and operating in the consumer internet sector, IT enabled business services, and the software sector, though the fund is pivoting towards the biopharma sector as well.
Currently, Adams Street Partners has more than $50 billion in assets under management. One of the funds is operated by Jeffrey Diehl, with the total portfolio value of the fund worth more than $540 million. Of the top 10 stock picks of Jeffrey Diehl’s Adams Street Partners, only one stock was added in the most recent quarter, showing that the firm is currently keeping faith with its previous stock picks.
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If you take a look at the portfolio, there aren’t many incredibly famous companies such as Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT). One of the popular stocks in the hedge fund’s portfolio is Robinhood Markets, Inc. (NASDAQ:HOOD), a financial services company, whose primary purpose is to allow non-finance savvy people to be able to invest in stocks and trade easily. However, Robinhood Markets, Inc. (NASDAQ:HOOD) hit the news during the GameStop Corp. (NYSE:GME) short squeeze, where tens of thousands of people on Reddit came together to drive up the price of GameStop Corp. (NYSE:GME), only to have Robinhood Markets, Inc. (NASDAQ:HOOD) stop people from buying the shares for some time.
Our Methodology
We used Adams Street Partners’ Q1 portfolio and picked the top 10 stocks for this analysis.
Top Stock Picks of Jeffrey Diehl’s Adams Street Partners
10. Roblox Corporation (NYSE:RBLX)
Adams Street Partners’ Stake Value: $3.736 million
Number of Hedge Fund Holders: 40
Roblox Corporation (NYSE:RBLX) is the only company in our list of top 10 stock picks of Jeffrey Diehl’s Adams Street Partners which has been added to the firm’s portfolio in the latest quarter. Roblox Corporation (NYSE:RBLX) is a game creation and online gaming platform. The company has only begun its rapid growth in the past five years, and has developed at an even faster pace during the pandemic. The company currently has more than 164 million monthly active users.
The stock price of Roblox Corporation (NYSE:RBLX) has nosedived in 2022, losing more than 65% of its value YTD, which may be one of the reasons why more than seventeen brokerages have issued an average “Hold” rating while one analyst has even issued a “Sell” rating.
Roblox Corporation (NYSE:RBLX) was mentioned by Tao Value in its Q4 2021 investor letter. Here is what it said:
“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in virtual world. Apple in its iOS 14.5 rolled out an impactful change for digital advertising landscape by requiring all apps to ask users to “opt in”.
9. Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS)
Adams Street Partners’ Stake Value: $5.373 million
Number of Hedge Fund Holders: 13
Representing nearly 1% of the total portfolio of Adams Street Partners, Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) is a bio-pharmaceutical company driven by science. According to Insider Monkey’s Q1 database, 13 hedge funds were bullish on the stock, compared to 14 funds in the prior quarter.
8. Aptinyx Inc. (NASDAQ:APTX)
Adams Street Partners’ Stake Value: $12.249 million
Number of Hedge Fund Holders: 10
Rather than focus on the big guns such as Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), Adams Street Partners is more focused on the biopharma sector. The hedge fund owns a prominent position in Aptinyx Inc. (NASDAQ:APTX), a clinical-stage biopharmaceutical company.
Aptinyx Inc. (NASDAQ:APTX) has seen a recent surge, with its stock price increasing by 28% in just the past five days, though it’s still down nearly 80% YTD in 2022.
7. Fusion Pharmaceuticals Inc. (NASDAQ:FUSN)
Adams Street Partners’ Stake Value: $22.905 million
Number of Hedge Fund Holders: 8
Another biopharma company, Fusion Pharmaceuticals Inc. (NASDAQ:FUSN), is among the top 10 stock picks of Jeffrey Diehl’s Adams Street Partners, making up 4.23% of the total portfolio. Fusion Pharmaceuticals Inc. (NASDAQ:FUSN) is focused on the evolution of radiopharmaceuticals and improving its safety by using targeted alpha therapeutics.
Recently, Fusion Pharmaceuticals Inc. (NASDAQ:FUSN)’s share price hit a 52-week low, even as it got the approval of the Food and Drug Regulation Authority to commence trials for battling tumors, though the trials were delayed, which affected its share price in the past few months.
6. Icosavax, Inc. (NASDAQ:ICVX)
Adams Street Partners’ Stake Value: $23.889 million
Number of Hedge Fund Holders: 12
Even though Adams Street Partners has reduced its hold in Icosavax, Inc. (NASDAQ:ICVX) by 1% in the latest quarter, it is still one of the top 10 stock picks of Jeffrey Diehl’s Adams Street Partners.
Icosavax, Inc. (NASDAQ:ICVX) is a pharmaceutical company which aims to advance vaccines and aid them in the fight against life threatening diseases. In recent months, Icosavax, Inc. (NASDAQ:ICVX) reported that its vaccine intended to protect against COVID-19 was not successful, though it is now reporting that its RSV vaccine looks promising, and could even be among the first companies intending to launch a vaccine of its kind.
5. Couchbase, Inc. (NASDAQ:BASE)
Adams Street Partners’ Stake Value: $31.040 million
Number of Hedge Fund Holders: 8
Couchbase, Inc. (NASDAQ:BASE) is a NoSQL cloud database, with its aim being to provide a modern database for enterprise applications. While Couchbase, Inc. (NASDAQ:BASE) has lost 32% in share price YTD during 2022, it has started to recover a bit in the past month, rising by nearly 18%.
Baron Funds published its Q3 investor letter, where Couchbase, Inc. (NASDAQ:BASE) was mentioned. Here is what it said:
“Couchbase, Inc., a new position in the Fund after a successful IPO, provides a modern database that collects and stores data and powers enterprise applications, for which there is no tolerance for disruption, inaccuracy, or downtime. The Couchbase database is based on a platform called NoSQL, which means that rather than having a predetermined rigid structure to store data (like legacy relational database software), it stores data in documents, making it easy to have a flexible set of items that can move into and out of each record. Its solution is fast as it utilizes caching, or retrieval from memory, versus hard drives; scales to large numbers of records, which is expensive for old-style relational databases and not even possible with some of the other NoSQL solutions; and works in all settings (on-premise, in the cloud, or in mixed hybrid environments). Couchbase is addressing a large total market of $62 billion, which is slowly migrating to the cloud and using less rigid database structures. We believe Couchbase can win its fair share of these workloads over time given its unified platform, ability to scale run anywhere, and its familiar query language that makes it easier for developers to quickly create solutions. The company’s growth rate is currently being impacted by COVID (about 15% of Couchbase’s customers are in the travel and hospitality industries), but we believe a return to normal pre-COVID spending levels later this year and into early 2022 should help to accelerate growth. Longer term, we believe that management will improve its go-to market efficiency, which will further accelerate growth. Given that revenues are only about $150 million now, it has a huge opportunity in this $62 billion marketplace, and we expect that Couchbase will be a profitable investment for many years to come.”
4. Q2 Holdings, Inc. (NYSE:QTWO)
Adams Street Partners’ Stake Value: $47.937 million
Number of Hedge Fund Holders: 19
Q2 Holdings, Inc. (NYSE:QTWO) provides end-to-end banking services and has services for both the consumer as well as the commercial industry. Making up nearly 9% of the total portfolio, Q2 Holdings, Inc. (NYSE:QTWO) is one of the top 10 stock picks of Jeffrey Diehl’s Adams Street Partners.
Q2 Holdings, Inc. (NYSE:QTWO) has been in the news while piquing the interest of investors as it announced that it would be considering sale offers. However, Q2 Holdings, Inc. (NYSE:QTWO) decided to hold off for the moment as the bids that were coming in were lower than what the company had anticipated.
Artisan Partners published its Q3 2021 investor letter, where it mentioned Q2 Holdings, Inc. (NYSE:QTWO). Here is what it said:
“Among our bottom contributors was Q2 Holdings. Q2 Holdings is a leading provider of secure, cloud-based virtual banking solutions for smaller regional and community banks. Shares have been pressured alongside slowing in the company’s bookings backlog as it faces difficult year-over-year growth comparisons and recovers from an air pocket of bookings caused by delays in bank decision-making during the harshest of pandemic lockdowns. We expect these headwinds to abate over the near-to-intermediate term. We believe several areas of Q2’s business appear lowly penetrated— RCFI regional and community financial institutions—and given recent client wins, a reasonable valuation and an improving selling environment, we are remaining patient.”
3. Paylocity Holding Corporation (NASDAQ:PCTY)
Adams Street Partners’ Stake Value: $122.063 million
Number of Hedge Fund Holders: 30
Paylocity Holding Corporation (NASDAQ:PCTY) provides cloud-based payroll and HR software, which is built to free the recipient company of arduous tasks. Founded in 1997, Paylocity Holding Corporation (NASDAQ:PCTY) has grown significantly in the past 5 years, with its share price increasing by more than 293% in the time period, despite the recent decrease in 2022.
Paylocity Holding Corporation (NASDAQ:PCTY) was also mentioned by Polen Capital in its Q4 2021 investor letter. Here is what it said:
“All our Portfolio companies, detractors included, are delivering on our long-term expectations and continue to have compelling growth prospects… We also reduced our position in Paylocity. This was purely a risk management decision, as we are still very positive on each company and its prospects.”
2. Vacasa, Inc. (NASDAQ:VCSA)
Adams Street Partners’ Stake Value: $129.851 million
Number of Hedge Fund Holders: 20
Vacasa, Inc. (NASDAQ:VCSA) is a vacation rental management company that manages properties in several countries including North America, and it has a presence in 34 American states. Vacasa, Inc. (NASDAQ:VCSA) reported $889 million in revenue in 2021. While the market has been neutral on Vacasa, Inc. (NASDAQ:VCSA) lately, its director Karl Peterson recently purchased 500,000 shares of the company for a transaction worth $1.385 million.
1. Rimini Street, Inc. (NASDAQ:RMNI)
Adams Street Partners’ Stake Value: $136.68 million
Number of Hedge Fund Holders: 16
With a position worth $136.68 million, Rimini Street, Inc. (NASDAQ:RMNI) is the top stock pick of Jeffrey Diehl’s Adams Street Partners. Rimini Street, Inc. (NASDAQ:RMNI) is a small-cap tech company which claims to be the “leading provider of independent, third-party enterprise software support services, driving substantial savings and better business outcomes”.
Rimini Street, Inc. (NASDAQ:RMNI) has increased its active clients by 13% to just under 2,900 and has some promising indicators but large sales of its shares made by the CEO are a bit discouraging, along with the fact that there is a lot of competition in the same space. Rimini Street, Inc. (NASDAQ:RMNI) also recently announced a stock repurchase plan, upping the amount from $15 million to $50 million.
You can also take a look at 10 Best Real Estate Stocks To Buy Now and 10 Cheap Stocks Leon Cooperman Is Buying.
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Disclosure. None. Top 10 Stock Picks of Jeffrey Diehl’s Adams Street Partners is originally published on Insider Monkey.
