In this article, we present the list of Top 10 Stocks for 2022 According To Chet Kapoor’s Tenzing Global Investors.
Pinterest, Inc. (NYSE:PINS), Fiverr International Ltd. (NYSE:FVRR), and Zoom Video Communications, Inc. (NASDAQ:ZM) are some of Tenzing Global’s most prominent former investments, as the fund has previously shown a strong interest in social media and online work-related stocks.
Chet Kapoor’s Tenzing Global Investors is a San Francisco-based investment advisor that was co-founded in 2011 by Mr. Kapoor, who previously worked at Blum Capital and Credit Suisse First Boston. Mr. Kapoor has a B.S and a B. A. from Rice University as well as an MBA from Stanford.
Tenzing Global aims to deliver superior risk-adjusted returns for its clients through building a concentrated portfolio of only its best long ideas. Unlike a traditional hedge fund, Tenzing only uses short positions as a means to generate alpha for its clients rather than as a hedge against its other holdings.
Since its founding in January 2012, the Tenzing Global Investors Fund I LP has been a solid performer, delivering a compound annual return of 11.42% through April 2020. The fund really began hitting its stride before the coronavirus outbreak, posting double-digit gains each year between 2016 and 2019, including 32.75% gains in 2017. Tenzing Global had nearly $456 million in assets under management as of March 30, 2021.
Tenzing Global had just 13 long positions in its 13F portfolio as of September 30, 2021, though that was up from just 9 a quarter earlier as Tenzing initiated several new positions during the quarter. Its 13F portfolio was valued at just under $296 million at the end of Q3 and was heavily weighted towards industrial, telecommunication, and consumer discretionary stocks. We’ll take a look at the money manager’s top 10 stock picks in this article.
ZIDO SUN/Shutterstock.com
Our Methodology
We follow hedge funds like Tenzing Global Investors because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns. Scroll down below for the opportunity to sign up for a free report and stock pick from Insider Monkey.
Now then, let’s check out the Top 10 Stocks for 2022 According To Chet Kapoor’s Tenzing Global Investors. Note that all hedge fund data is based on the exclusive group of 800+ funds tracked by Insider Monkey as part of our market-beating investment strategy.
Top 10 Stocks for 2022 According To Chet Kapoor’s Tenzing Global Investors
10. 2U Inc (NASDAQ:TWOU)
The second part of our list of Tenzing Global’s top stock picks for 2022 begins with 2U Inc (NASDAQ:TWOU), which the investment advisor has owned since the second quarter of 2020. Tenzing owned 300,000 TWOU shares on September 30, selling off a net total of 180,000 shares during the quarter.
One of the 5 Online Education Stocks to Buy, 2U Inc (NASDAQ:TWOU) was owned by 23 of the hedge funds tracked by Insider Monkey as September 30, down from 29 a year earlier. In its Q3 2021 investor letter, Artisan Partners’ Artisan Small Cap Fund lauded the company’s impressive customer base, which includes Yale, Harvard, and Columbia, and praised its acquisition of learning platform edX. The fund believes that 2U Inc (NASDAQ:TWOU) is well-positioned as a market leader to capitalize on the on-campus to online trend in the $2.2 trillion higher education market, a trend which it believes will only intensify in the years to come as online learning credentials become more widely accepted.
9. Overstock.com, Inc. (NASDAQ:OSTK)
Online retailer Overstock.com, Inc. (NASDAQ:OSTK) was another new addition to Tenzing Global’s 13F portfolio in Q3 and ranks ninth on this list after the firm bought 50,000 shares valued at just under $3.9 million as of September 30.
Tenzing is far from the only money manager to have taken a recent interest in Overstock.com, Inc. (NASDAQ:OSTK) as there’s been a greater than four-fold increase in hedge fund ownership of the stock since the end of Q1 2020. Overstock shares gained over 2000% between March and August 2020 but have declined sharply in recent months on weaker consumer spending as the omicron variant has become dominant, as well as prominent supply chain disruptions.
Overstock.com, Inc. (NASDAQ:OSTK) was recently named a Best Idea by Wedbush, which likes the company’s varied selection of commodity and unbranded products as well as its potential to significantly grow revenue through the home furnishings market, the future growth of which the firm predicts will be captured entirely by the eCommerce market.
8. VIZIO Holding Corp. (NYSE:VZIO)
Tenzing Global is also bullish on VIZIO Holding Corp. (NYSE:VZIO), which manufactures smart TVs and other home entertainment devices, as well as its own smart TV operating system, which generates advertising revenue. Tenzing owned 250,000 VZIO shares on September 30 after selling off 125,000 shares during Q3. Other hedge funds were buying Vizio shares however, as there was a net increase of 850,000 shares owned by the hedge funds tracked by Insider Monkey.
In its Q2 2021 investor letter, Argosy Investors noted that VIZIO Holding Corp. (NYSE:VZIO) was now one of its five largest positions, even as the fund noted that the company could be negatively impacted by higher wage inflation in terms of producing its low-margin televisions. It also believes the company may have less negotiating power with advertisers compared to larger rivals like Roku when it comes to raising advertising prices, though it believes VIZIO Holding Corp. (NYSE:VZIO)’s ad business is otherwise well insulated.
7. Kaltura, Inc. (NASDAQ:KLTR)
Pinterest, Inc. (NYSE:PINS), Fiverr International Ltd. (NYSE:FVRR), and Zoom Video Communications, Inc. (NASDAQ:ZM) weren’t among the stocks that Tenzing Global was buying in Q3 2021, but enterprise video company and Zoom competitor Kaltura, Inc. (NASDAQ:KLTR), which had its IPO during the quarter, was. The investment advisor initiated a position of 225,000 KLTR shares valued at $2.32 million on September 30. Tenzing was one of 15 hedge funds tracked by Insider Monkey that went long Kaltura during the quarter.
Kaltura, Inc. (NASDAQ:KLTR) went public in July after 15 years as a private company, raising $150 million through its IPO to help accelerate its growth. The stock has crumbled since its $12.00 offering however, sitting at just $3.37 as the phenomenal 46% year-over-year growth in Q1 that fueled its IPO hype has already begun to wane. Q4 revenue projections call for flat growth quarter-over-quarter, while Kaltura, Inc. (NASDAQ:KLTR) has also admitted to being behind on its sales force hiring targets, which could further hamper its revenue targets.
6. Enovix Corporation (NASDAQ:ENVX)
In addition to adding 182,500 of Enovix Corporation (NASDAQ:ENVX)’s public warrants to its 13F portfolio during Q3, which the company has since redeemed, Tenzing Global also added a 400,000-share long position in the company, which produces lithium-ion batteries for the electric vehicle industry.
Enovix Corporation (NASDAQ:ENVX) went public in July after completing its reverse merger with Rodgers Silicon Valley Acquisition Corp., which Tenzing had owned 405,000 shares of as of June 30. 29 hedge funds tracked by Insider Monkey are long ENVX following its first quarter as a public company, owning 46 million of its shares.
Enovix Corporation (NASDAQ:ENVX) has been a relatively secretive company until its public debut, focusing on developing its proprietary 3D stacking structure, which allows it to create more powerful silicon-based batteries. The company now believes it’s ready to scale up and bring its batteries into the limelight, raising $405 million through its offering to do just that. To that end, Enovix plans to build an additional plant to complement its existing facility in Fremont, California.
Will some of these stocks eventually go the way of Pinterest, Inc. (NYSE:PINS), Fiverr International Ltd. (NYSE:FVRR), and Zoom Video Communications, Inc. (NASDAQ:ZM), and be sold off by Tenzing Global in favor of more compelling opportunities? Only time will tell. What we do know is that Tenzing has five more stocks that it thinks very highly of right now, which you can read about at the link below.
5. Peloton Interactive, Inc. (NASDAQ:PTON)
Closing out the first part of our list of Tenzing Global’s top stocks for 2022 is fitness product manufacturer Peloton Interactive, Inc. (NASDAQ:PTON). The firm initiated a new position in the company consisting of 100,000 PTON shares valued at $8.71 million at the end of Q3.
Peloton Interactive, Inc. (NASDAQ:PTON) shares have crashed by nearly 85% from their peak in February 2021, when surging demand for their connected-fitness devices had the market salivating. The company struggled to meet the intense demand, which it compensated for by spending over $800 million to buy another fitness bike manufacturer, Precor, as well as build another new plant in Ohio.
However, with competition in the space intensifying and gyms reopening, demand for Peloton Interactive, Inc. (NASDAQ:PTON)’s equipment has begun to slacken, making those expenditures look like huge mistakes for the company. Peloton’s connected-fitness device revenue fell by 17% year-over-year in Q3 and the company has hired consulting firm McKinsey with the goal of cutting costs. Nonetheless, Tenzing clearly believes that PTON shares were a good buying opportunity and that the company will find its footing as a leader in the connected-fitness space.
Miller Value Partners, an investment management firm, published its “Miller Opportunity Equity” fourth quarter 2021 investor letter and mentioned Peloton Interactive, Inc. (NASDAQ:PTON). Here is what the fund said:
“Money losing growth stocks posted the biggest losses late in the year. Jim Cramer termed this behavior getting “pelotoned,” as Peloton is the poster child for what we experienced. At recent prices ($31.33 as of close 1/14/22), Peloton is more than 80% off its highs. It’s reversed nearly all its pandemic gains, trading at levels close to the IPO price ($29).
We previously owned Peloton, so we know the company well. We bought Peloton after the IPO based on our belief it was a misunderstood consumer brand pegged as a faddish hardware company.
It benefited enormously from the pandemic as demand surged and customer acquisition costs plummeted. We expected these dynamics to reverse as the environment normalized from stay-at-home. We sold in late 2020 because we thought it was fully valued around $100. Growing risks created a poor risk/reward.
At current prices, it’s interesting once again and we’ve resumed work on it. Market sentiment towards money losers remains quite negative. Peloton’s prospects, like others, ultimately depend on its ability to drive free cash flow over the long term. We reference Peloton because it’s an extreme example of behavior we’ve seen more broadly.”
4. Brightcove Inc. (NASDAQ:BCOV)
Former Brightcove Inc (NASDAQ:BCOV) board member Chet Kapoor remains an investor in the cloud-based video distribution platform despite his 2017 resignation from the said board, which resulted from a reported disagreement over the board’s composition and the company’s governance structure. Tenzing Global owned 3.5 million BCOV shares on September 30, selling a net total of 500,000 during the quarter and has been a shareholder of the company since Q4 of 2016.
Brightcove Inc (NASDAQ:BCOV)’s leadership instability has loomed large in the stock’s recent disappointing results, with shares down by over 50% during the last year as CEO Jeff Ray is scheduled to retire at the end of 2022. Weak guidance for the fourth quarter also dented the stock’s performance in recent weeks, as the company predicted between $51 and $52 million of revenue and 0.02 to $0.04 in earnings per share, figures which would both represent small declines from a year earlier.
Brightcove Inc (NASDAQ:BCOV) just announced that it has acquired audience insights company Wicker Labs, which will further augment Brightcove’s video analytics capabilities, which provide real-time engagement feedback to streamers.
3. Gogo Inc. (NASDAQ:GOGO)
Topping the list of Tenzing Global Investors’ top stocks for 2022 is Gogo Inc (NASDAQ:GOGO), which functions as a service provider for the airline industry. Tenzing owned 4.2 million GOGO shares on September 30, with the stock becoming its top pick for the first time.
While Gogo Inc (NASDAQ:GOGO) has a dominant position in the airline wireless communication field at present, with 80% market share, that really leaves it with nowhere to go but down, which is what Morgan Stanley is predicting as the competition begins to heat up. The investment bank believes that Gogo will control just half of the market within two years, which no doubt factors into the stock being so heavily shorted by investors and having fallen by 32% since that report.
Nonetheless, Gogo Inc (NASDAQ:GOGO) is coming off a strong third quarter in which sales rose by 31% on the strength of growing airline demand, while the company was able to increase both the number of aircraft it services as well as its average monthly revenue per aircraft. And despite Morgan Stanley’s predictions, the company believes that it will achieve a 15% compound annual growth rate through 2025.
2. Yelp Inc. (NYSE:YELP)
Tenzing has also been a shareholder of Yelp Inc (NYSE:YELP) since the final quarter of 2016, a lengthy period during which YELP shares have actually declined in value. Tenzing owned 1.76 million YELP shares at the end of Q3, being one of 26 of the hedge funds tracked by Insider Monkey to own the stock.
Yelp Inc (NYSE:YELP) shares have rebounded by 75% since the end of October 2020 on the back of stronger results in 2021 as the effect of the pandemic began to lessen and restaurant activity in particular improved. Yelp’s revenue rose by 52% during the second quarter of 2021, while its Q3 revenue of $269.1 million also topped estimates. Yelp Inc (NYSE:YELP) has also been successful when it comes to improving its bottom-line results, with past investments in its ad products paying huge dividends in recent quarters.
1. Uber Technologies, Inc. (NYSE:UBER)
Ranking second on this list is Uber Technologies, Inc. (NYSE:UBER), which Tenzing has owned since the third quarter of 2019. The money manager added another 250,000 shares of the ride-sharing operator to its 13F portfolio during Q3, lifting its holding to 1.33 million shares valued at $59.36 million.
Uber Technologies, Inc. (NYSE:UBER) has proven to be extremely popular among hedge funds over the past two years, with ownership of the stock tripling during that time. UBER shares have tumbled by 39% over the past nine months however as the company remains unable to generate net income or free cash flow.
Its food delivery and freight services may be able to help in this regard in the future, as the financials for both are improving and Uber Technologies, Inc. (NYSE:UBER)’s ride-sharing platform appears to be hitting its stride again coming out of the worst of the pandemic, with bookings hitting a record high in October. The company was also EBITDA positive in Q3 with expectations for the same in Q4.
ClearBridge Investments, an investment management firm, published its “Large Cap Growth Strategy” third quarter 2021 investor letter and mentioned Uber Technologies, Inc. (NYSE:UBER). Here is what the fund said:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
You can also take a peek at 10 Tech Stocks To Buy According To Billionaire George Soros and Analysts Think These 10 Stocks Are Overvalued.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Stocks Under $10 to Buy Right Now
- 10 Best Healthcare Stocks To Buy In 2022
- 10 Weed Stocks to Buy in 2022
Disclosure: None. Top 10 Stocks for 2022 According To Chet Kapoor’s Tenzing Global Investors is originally published at Insider Monkey.
