Market skeptics are on the back foot after the Federal Reserve’s indication that its battle against inflation is bearing fruit and its rate-hike spree is nearing conclusion. Market bears were growing louder in 2023 despite a huge rally driven by AI boom and strong consumer sentiment. A recession that was awaited didn’t arrive and many believe 2024 would see continued optimism, if not new highs. JPMorgan in its 2024 market outlook report said that 2024 would be the “last leg” in a long road towards normalcy in financial markets. However, JPMorgan said that investors should keep a check on their expectations :
Ecommerce company Coupang Inc (NYSE:CPNG) in November posted Q3 results. GAAP EPS in the period came in at $0.05, missing estimates by $0.02. Revenue jumped about 21% year over year to $6.2 billion, beating estimates by $260 million.
Here is what Baron Global Advantage Fund has to say about Coupang, Inc. (NYSE:CPNG) in its Q3 2023 investor letter:
“Coupang is a leading Korean e-commerce company founded in 2010. It went public in March of 2021, and we have been investors in this Fund since the IPO. After spending half a day with management, touring the company’s fulfillment center, asking questions, and learning more about the reasons behind the remarkable success the company has achieved over the last 13 years, we decided we wanted to own it in this Fund as well. When we originally invested in Coupang, our thesis was constructed around the company’s wide product selection, low prices, and unrivaled convenience thanks to its investments in an end-to-end infrastructure that covers over 70% of Korea’s population, enabling over 99% of orders to be delivered within one day or less, rather than the industry norm of two to three days, driving customer satisfaction, which translates to higher customer retention rates and lifetime value. We thought that Coupang would continue to gain market share in the U.S. $500 billion-plus Korean retail market, while expanding its offerings into additional categories, expanding its ecosystem via a third-party marketplace, and continuing to invest in infrastructure density to further capture inefficiencies, enhancing the customer experience, and improving profit margins. The company has since outperformed our expectations, growing its market share to 25% (#1 in the industry), despite not being a first mover, while building an unrivaled user experience with 99.8% of products delivered the next day (with the majority of them by dawn) and becoming profitable significantly faster than we expected. Our biggest takeaway from the visit was that despite all of Coupang’s success, there is still a long runway of growth ahead. For example, while most of the facility we visited is operated with pickers going to shelves to pick up items for orders, there was one room in which shelves drove themselves to pickers on the back of autonomous robots, which increased picker productivity by 3x. Additionally, while Coupang has been striving to reduce its reliance on distributors, which enables them to expand margins while lowering prices for consumers, a significant opportunity remains for further reduction. Lastly, we got plenty of examples of out-of-the-box thinking (no pun intended) from the company’s singulation process (improves the picking process by reducing the constraint to search for items order by order), decreasing use of boxes (80% of shipments are now boxless), enabling grocery delivery without cold-chain logistics (thanks to end-to-end supplychain efficiency), or how Coupang is able to fill trucks so that each carries more than 2x the parcels a UPS or a FedEx truck can, despite being half the size. The 4% free-cash-flow yield, which is also negatively impacted by the significant reinvestments the company is making into its emerging offerings, also contributed to our decision to add to our Coupang position upon returning to New York."
Number of Hedge Fund Investors: 57
Bank of America recently published its “triple momentum” stocks screen which filters for stock based on earnings, price, and sentiment from the news. DoorDash Inc (NASDAQ:DASH) made it to the list of these stocks.
Deutsche Bank recently started covering the stock. The firm said DoorDash Inc (NASDAQ:DASH) is capturing a small portion of its potential markets. Deutsche Bank has a $125 price target on the stock.
Number of Hedge Fund Investors: 57
Chip design company Synopsys Inc (NASDAQ:SNPS) shares were spotted in 57 hedge fund portfolios as of the end of the September quarter. Synopsys Inc (NASDAQ:SNPS) in November posted fiscal Q4 results. Revenue in the period jumped about 24.2% year over year.
Needham analyst Charles Shi reiterated a Buy rating on the stock and upped his price target to $660 from $500.
TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Synopsys, Inc. (NASDAQ:SNPS) in its Q3 2023 investor letter:
“Across the Information Technology universe, we seek companies possessing differentiated capabilities, products, and services. Synopsys, Inc. (NASDAQ:SNPS), a supplier of electronic design automation software for use in designing and testing integrated circuits, edged forward 5%. The company reported a solid fiscal fourth quarter and raised forward guidance. Despite macroeconomic concerns, their customers remain focused on developing next generation semiconductors with their electric design automation tools. We trimmed the position as it approached our price target.”
Number of Hedge Fund Investors: 59
Networking products company Arista Networks Inc (NYSE:ANET) saw a 29.1% YoY growth in revenue during the third quarter of 2023.
A total of 59 hedge funds tracked by Insider Monkey had stakes in Arista Networks Inc (NYSE:ANET). The biggest hedge fund stakeholder of Arista Networks Inc (NYSE:ANET) during this period was Steve Cohen’s Point72 Asset Management which owns a $314 million stake in Arista Networks Inc (NYSE:ANET).
Citi recently added the stock to its US Focus List and called it its top networking pick for 2024. Citi analyst Atif Malik increased his price target for Arista Networks Inc (NYSE:ANET) to $300 from $220.
Giverny Capital Asset Management made the following comment about Arista Networks, Inc. (NYSE:ANET) in its Q3 2023 investor letter:
“We modestly trimmed Arista Networks, Inc. (NYSE:ANET) as it reached an 8% weight in our portfolio. As I write this, Arista is up about 60% for the year, and it continued rising after our trims. Arista remains our second largest holding, ending the quarter at 7.1% of the portfolio.”
Number of Hedge Fund Investors: 60
Payments company Block Inc (NYSE:SQ) has gained about 14% in 2023 through December 19.
As of the end of the third quarter of 2023, 60 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Block Inc (NYSE:SQ). The biggest stakeholder of Block Inc (NYSE:SQ) during this period was Andreas Halvorsen’s Viking Global which owns a $545 million stake in Block Inc (NYSE:SQ).
Here is what Baron FinTech Fund has to say about Block, Inc. (NYSE:SQ) in its Q3 2023 investor letter:
“Block, Inc. provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to a confluence of factors, including slowing growth, a brief system outage, and the departure of a key executive who ran the Square business segment. Ongoing investor concerns over consumer spending and a recession did not help sentiment. Nevertheless, Block reported strong quarterly results with 27% gross profit growth and adjusted EBITDA more than doubling. We believe Block’s businesses are resilient, and greater management focus on cost discipline should drive further margin expansion. We continue to own the stock due to Block’s long runway for growth, durable competitive advantages, and track record of innovation.”
Number of Hedge Fund Investors: 62
Database company Mongodb Inc (NASDAQ:MDB) ranks 12th in our list of the best large-cap high growth stocks to buy according to hedge funds. During the third quarter, Mongodb Inc’s (NASDAQ:MDB) revenue increased by about 30% on a YoY basis. Adjusted EPS in the period came in at $0.96, beating estimates by $0.46.
Number of Hedge Fund Investors: 66
PDD Holdings Inc - ADR (NASDAQ:PDD) ranks 11th in our list of the best large-cap growth stocks to buy now. Morgan Stanley recently gave bullish comments about the stock as the firm downgraded Alibaba. Morgan Stanley analysts think PDD Holdings Inc - ADR (NASDAQ:PDD) will keep growing its market share in China as consumer behaviors change.
As of the end of the third quarter of 2023, 66 hedge funds in Insider Monkey’s database of 910 funds had stakes in PDD Holdings Inc - ADR (NASDAQ:PDD). The biggest stakeholder of PDD Holdings Inc - ADR (NASDAQ:PDD) was Lei Zhang’s Hillhouse Capital Management which owns a $721 million stake in PDD Holdings Inc - ADR (NASDAQ:PDD).
Number of Hedge Fund Investors: 67
Engineering company TransDigm Group Inc (NYSE:TDG) is one of the top large-cap growth stocks to buy according to smart money investors. In November TransDigm Group Inc (NYSE:TDG) posted third quarter results. Adjusted EPS in the period came in at $8.03, beating estimates by $0.51. Revenue jumped by about 32.1% year over year to $1.85 billion, beating estimates by $10 million.
Out of the 910 hedge funds in Insider Monkey’s database, 67 hedge funds were long TransDigm Group Inc (NYSE:TDG).
Number of Hedge Fund Investors: 69
Ecommerce stores platform company Shopify Inc (NYSE:SHOP) in November posted third quarter results. Adjusted EPS in the period came in at $0.24, beating estimates by $0.10. Revenue in the quarter jumped about 24.8% year over year to $1.71 billion, beating estimates by $40 million.
Of the 910 hedge funds in Insider Monkey’s database, 69 funds had stakes in Shopify Inc (NYSE:SHOP).
Alger Mid Cap Focus Fund made the following comment about Shopify Inc. (NYSE:SHOP) in its Q3 2023 investor letter:
“Shopify Inc. (NYSE:SHOP) operates a cloud-based commerce platform designed for small and medium-sized businesses. Its software is used by merchants to run business across all sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops. The firm’s platform provides merchants with a single view of business and customers and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting. While the company’s shares nearly doubled in the first half of 2023, market sentiment deteriorated towards unprofitable technology companies during the third quarter, as shares detracted from performance. Despite the share price decline, we continue to remain positive on the company’s asset-light model within the vast eCommerce market and believe that we are in the early innings of the company’s renowned focus on operational efficiency and profitability.”
Number of Hedge Fund Investors: 69
Crowdstrike Holdings Inc (NASDAQ:CRWD) ranks 8th in our list of the best large-cap growth stocks to buy according to hedge funds. Wedbush Securities recently said 2024 would be a strong year for the cybersec sector amid increased Federal spending on the sector. Wedbush’s Dan Ives said Crowdstrike Holdings Inc (NASDAQ:CRWD) would be one of the stocks that would benefit from this spending boost.
Of the 910 hedge funds in Insider Monkey’s database, 69 hedge funds had stakes in Crowdstrike Holdings Inc (NASDAQ:CRWD).
ClearBridge Multi Cap Growth Strategy made the following comment about CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its third 2023 investor letter:
“While the Strategy continued to trail the benchmark in the third quarter, the performance gap narrowed due to improvement among our information technology (IT) holdings, notably cyber security software maker CrowdStrike Holdings, Inc. (NASDAQ:CRWD). A lower average market capitalization versus the benchmark, however, remained a headwind as small and mid-cap companies have been more impacted than large caps by tightening liquidity.”
Number of Hedge Fund Investors: 71
Cloud company Snowflake Inc (NYSE:SNOW) posted Q3 results in November after which the stock jumped and Wall Street analysts gave bullish ratings to the stock. Citi analyst Tyler Radke said it was the "best beat/raise performance in [roughly] 6 quarters" as the analyst, who has a Buy rating on the stock, is seeing "some greenshoots" in new projects. Citi analyst Tyler Radke has a $191 price target on Snowflake Inc (NYSE:SNOW) stock.
ClearBridge Multi Cap Growth Strategy made the following comment about Snowflake Inc. (NYSE:SNOW) in its Q2 2023 investor letter:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.
Number of Hedge Fund Investors: 76
Argentina-based ecommerce company MercadoLibre Inc (NASDAQ:MELI) is one of the best large-cap growth stocks to buy according to hedge funds.
A total of 76 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in MercadoLibre Inc (NASDAQ:MELI). The biggest hedge fund stakeholder of the firm was David Blood and Al Gore’s Generation Investment Management which owns a $609 million stake in MercadoLibre Inc (NASDAQ:MELI).
Polen International Growth Strategy made the following comment about MercadoLibre, Inc. (NASDAQ:MELI) in its Q3 2023 investor letter:
“According to our research, MercadoLibre, Inc. (NASDAQ:MELI) continues to demonstrate all the signs of a strengthening e-commerce/fintech platform. In the most recent quarter, the company reported revenue growth of nearly 60% in local currency terms despite very difficult growth comparisons from the past two to three years. As we see it, nearly all key metrics for the company continue to trend very positively.”
Click to continue reading and see 5 High Growth Large-Cap Stocks To Invest In.
Suggested Articles:
Disclosure. None. 17 High Growth Large-Cap Stocks To Invest In was initially published on Insider Monkey.
