In this piece, we will take a look at the top ten technology stocks to buy according to billionaire Louis Bacon. If you want to skip our introduction to the hedge fund boss, then head on over to Top 5 Tech Stocks to Buy According to Billionaire Louis Bacon.
Louis Bacon is an American investor who is at the helm of the hedge fund Moore Capital Management. Moore Capital Management, also known as MCM, is a multi-billion dollar hedge fund and it is headquartered in New York, New York, the United States.
Mr. Bacon is a graduate of Middlebury College in Virginia, where unlike most of his peers in the finance industry, he studied English Literature and graduated in 1979. However, before he would go on to graduate, the now hedge fund billionaire made his first foray into the finance industry, as he worked at the brokerage Walter Frank during his summer break. He then went to the Columbia Business School for his Master of Business Administration with a major in finance. Unable to wait, Mr. Bacon would start trading commodities while he was in Columbia, and face losses during his first year only to turn a profit the next year.
Before setting up Moore Capital Management, the billionaire would first set up another investment firm in 1987 which would see him profit from the infamous Black Monday market crash in the same year. Two years later Mr. Bacon set up Moore Capital Management, and over the course of the next two decades, the firm would grow its portfolio to billions of dollars. The growth would be attributed to strong financial performance as well, with Moore Capital returning an average of 15.8% by 2018.
With the U.S. dollar on a rampage unleashed by the Federal Reserve, and inflation decimating purchasing powers in the developed world, MCM has become extremely relevant. It invests in cash, futures, and derivatives, among others, in its portfolio by analyzing trends such as inflation, central bank monetary policies, and economic growth. Mr. Bacon is personally involved in the fund's investment decisions, and he leverages a team of researchers to help him.
By the end of this year's second quarter, Moore Capital's portfolio was worth a cool $3.7 billion, and Mr. Bacon's net worth stood at a whopping $1.6 billion according to Forbes Magazine. Today's piece will focus on his hedge fund's top technology investments, with the top picks being Twitter, Inc. (NYSE:TWTR), Fisker Inc. (NYSE:FSR), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Top 10 Tech Stocks to Buy According to Billionaire Louis Bacon
Louis Bacon Moore of Moore Capital
Our Methodology
We analyzed Moore Capital Investment's filings with the Securities and Exchange Commission for this year's second quarter to sift out its top technology stock picks.
Top 10 Tech Stocks to Buy According to Billionaire Louis Bacon
Moore Capital Investment's Stake Value: $4.9 million
Percentage of Moore Capital Investment's 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 51
Five9, Inc. (NASDAQ:FIVN) is a cloud software and services provider that is headquartered in San Ramon, California, the United States. The company provides a virtual contact center platform that allows its customers to interact with customers across a variety of different platforms such as the Internet and APIs.
Mr. Bacon's hedge fund owned 54,000 Five9, Inc. (NASDAQ:FIVN) shares as part of its investments for this year's second quarter. The shares allowed it to hold a $4.9 million stake in the company which represented 0.13% of its investment portfolio. Insider Monkey surveyed 895 hedge funds for their Q2 2022 investments and discovered that 51 had also bought the company's shares.
Five9, Inc. (NASDAQ:FIVN) is one of the strongest players in its industry, with its annual revenue, operating income, and earnings per share (EPS) growth rates of 34%, 54%, and 21%, respectively, all being above the industry average. Credit Suisse set the company's share price target to $90 in September 2022, as it outlined that it will benefit from the shift to online marketing in the wake of the coronavirus pandemic.
Five9, Inc. (NASDAQ:FIVN)'s largest investor in our database is Christopher Lyle's SCGE Management which owns 1.5 million shares that are worth $140 million.
Alongside Fisker Inc. (NYSE:FSR), Twitter, Inc. (NYSE:TWTR), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD), Five9, Inc. (NASDAQ:FIVN) is one of Moore Capital Investment's favorite technology stocks.
Moore Capital Investment's Stake Value: $4.9 million
Percentage of Moore Capital Investment's 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 37
ZoomInfo Technologies Inc. (NASDAQ:ZI) is a market intelligence and engagement platform provider that allows marketers to identify customers and decision makers for their campaign targets. It operates a cloud platform that provides its clients with data metrics such as buying signals and customer target data. The firm is headquartered in Vancouver, Washington, the United States.
ZoomInfo Technologies Inc. (NASDAQ:ZI) has a database of more than 200 million individuals that work for more than 100 million companies, allowing the firm to generate vast amounts of insights for its customers. Most of its competitors are smaller companies, which are unable to leverage economies of scale and the subsequent cost benefits like ZoomInfo Technologies Inc. (NASDAQ:ZI) can.
Moore Capital Investment's stake in ZoomInfo Technologies Inc. (NASDAQ:ZI) was worth $4.9 million by Q2 2022 end. This came in the form of 150,000 shares and it represented 0.13% of the fund's investment portfolio. During the same time period, 37 out of the 895 hedge funds polled by Insider Monkey had also invested in the company.
ZoomInfo Technologies Inc. (NASDAQ:ZI)'s largest investor in our database is Karthik Sarma's SRS Investment Management which owns 5.1 million shares that are worth $170 million.
Artisan Partners mentioned the company in its Q2 2022 investment letter. Here is what the fund said:
“ZoomInfo Technologies Inc. (NASDAQ:ZI) is a leading provider of contact databases and associated marketing automation tools for business-to-business sellers. We believe the company’s combination of data, insights and digital tools is being well received by companies looking to increase sales force productivity and enhance the returns on their substantial customer relationship management (CRM) software investments. In addition, the company has impressively grown its base data business and layered in more advanced software functionality while maintaining 40% operating margins. While ZoomInfo’s growth strategies have significant long-term growth runway, investors have grown increasingly skeptical about the durability of its top-line growth in a recession as customers potentially look to cut costs. Our research suggests ZoomInfo’s sales analytics tools offer solid paybacks to its customers, and we believe the company will still be able to efficiently reach new sales prospects in a downturn. With shares trading at an attractive valuation and our profit cycle thesis intact, we added modestly to our position.”
Moore Capital Investment's Stake Value: $5.7 million
Percentage of Moore Capital Investment's 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 46
Bill.com Holdings, Inc. (NYSE:BILL) is a cloud based software provider which allows companies to automate and digitize their back office financial operations. The company lets its customers make cloud based payments and manage their Accounts Payables and Accounts Receivables. It is headquartered in San Jose, California, the United States.
Bill.com Holdings, Inc. (NYSE:BILL) posted a strong 30.2% customer growth rate by the end of its fiscal year 2022, which marks consecutive growth since 2018. Additionally, during the same time period, its average payment volume per customer has also grown at an average of 15.7%.
As part of its second quarter of 2022 investments, Moore Capital owned 52,000 Bill.com Holdings, Inc. (NYSE:BILL) shares which were worth $5.7 million and represented 0.15% of its investment portfolio. Insider Monkey studied 895 hedge fund holdings for this year's June quarter to discover that 46 had owned a stake in the company.
Colin Moran's Abdiel Capital Advisors is Bill.com Holdings, Inc. (NYSE:BILL)'s largest investor. It owns 1.9 million shares that are worth $218 million.
Moore Capital Investment's Stake Value: $5.9 million
Percentage of Moore Capital Investment's 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 32
Tower Semiconductor Ltd. (NASDAQ:TSEM) is an Israeli semiconductor foundry that manufactures a variety of products such as image sensors and signals processors. It serves the needs of a variety of industries such as personal computing and industrials and is headquartered in Tel Aviv.
Mr. Bacon's hedge fund held a $5.9 million stake in Tower Semiconductor Ltd. (NASDAQ:TSEM) as this year's June quarter ended. The stake constituted 0.15% of the fund's investment portfolio. Insider Monkey's Q2 2022 survey of 895 hedge funds revealed that 32 had also invested in the company.
Tower Semiconductor Ltd. (NASDAQ:TSEM) is set to be acquired by U.S. chip giant Intel Corporation, in a deal that was announced earlier this year. The firm recently entered into a partnership with a chip design firm to develop a new automotive chip design platform that will enable Tower Semiconductor Ltd. (NASDAQ:TSEM)'s customers to improve their design cycle times.
Tower Semiconductor Ltd. (NASDAQ:TSEM)'s largest investor is Richard Mashaal's Rima Senvest Management which owns six million shares of the company that are worth $280 million.
Moore Capital Investment's Stake Value: $7.8 million
Percentage of Moore Capital Investment's 13F Portfolio: 0.2%
Number of Hedge Fund Holders: 43
Dynatrace, Inc. (NYSE:DT) is a software intelligence platform firm. It provides a host of services such as application security, business analytics, automation of information technology operations, and infrastructure monitoring. The firm is headquartered in Waltham, Massachusetts.
Dynatrace, Inc. (NYSE:DT) is playing in a market that is the direct result of the growth in data center and cloud computing platforms of late. Therefore, the market has a strong growth potential of its own, with an estimated compounded annual growth rate of 25% for the next couple of years. Keeping in line with this CAGR, Dynatrace, Inc. (NYSE:DT) itself targets a high end of 30% for annual revenue growth.
Moore Capital's Q2 2022 portfolio revealed that the firm had owned a $7.8 million stake in Dynatrace, Inc. (NYSE:DT), which came in the form of 200,000 shares. During the same time period, 43 out of the 895 hedge funds studied by Insider Monkey had invested in the company.
Dynatrace, Inc. (NYSE:DT)'s largest investor in our database is Thomas Steyer's Farallon Capital which owns 7.8 million shares that are worth $309 million.
Meridian Funds mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Dynatrace, Inc. (NYSE:DT) develops cloud-based solutions that help large enterprises monitor and analyze IT infrastructure. As more companies migrate to digital business models, demand is rising for cloud-based solutions that enable them to detect vulnerabilities in applications, monitor and manage digital experiences, and provide business analytics and automation. With a global market opportunity of $50 billion, we believe Dynatrace is still early in its growth cycle. Most impressive to us is the company’s ability to deliver strong revenue growth in excess of 30% while also delivering healthy free cash flow margins of approximately 25%—a rare combination in the software industry. Dynatrace has been on our watch list for quite some time, owing to its large addressable market, strong and consistent growth, high margins, and healthy customer retention rates. However, until recently, we felt that its valuation was unjustifiably high. During the quarter, the downturn in technology stocks presented us with the opportunity to start a position in the company at what we believe was an attractive price. The stock subsequently rebounded and elevated Dynatrace to a top relative contributor in the Fund.”
Along with Twitter, Inc. (NYSE:TWTR), Fisker Inc. (NYSE:FSR), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD), Dynatrace, Inc. (NYSE:DT) is a top Louis Bacon technology stock pick.
