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10 Tech Stocks to Invest in Today According to John Armitage’s Egerton Capital

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·8 min read
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In this article, we will discuss the top 10 tech stocks to invest in today according to John Armitage’s Egerton Capital. If you want to skip our detailed analysis of the technology sector, you can go directly to the 5 Tech Stocks to Invest in Today According to John Armitage’s Egerton Capital.

John Armitage is the co-founder of Egerton Capital, which is a popular British hedge fund. Egerton Capital was founded in 1994 in London, and it has massively grown over the years, returning 15% on average annually since its inception. With a portfolio valued at $20.1 billion, Armitage’s Egerton Capital employs a bottom-up approach to investment, researching stocks thoroughly to create a dynamic, diversified, and eclectic portfolio.

Some of the most noteworthy stocks in Armitage’s Q2 portfolio are Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Facebook, Inc. (NASDAQ:FB), among others discussed extensively below.

10 Tech Stocks to Invest in Today According to John Armitage's Egerton Capital
10 Tech Stocks to Invest in Today According to John Armitage's Egerton Capital

John Armitage of Egerton Capital

Why do we care about hedge fund activity? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Our Methodology

With this context in mind, let’s discuss the 10 tech stocks to invest in today according to John Armitage’s Egerton Capital. We used Egerton Capital’s 13F portfolio for the second quarter of 2021 to rank these stocks. The list was compiled according to the value of each holding in the investment portfolio.

The number of hedge fund holders for each stock are mentioned to gauge its popularity with smart money. We also made sure to include stocks with mostly positive analysts’ ratings and strong fundamentals.

Tech Stocks to Invest in Today According to John Armitage’s Egerton Capital

10. Sea Limited (NYSE:SE)

Egerton Capital’s Stake Value: $178,421,000

Percentage of Egerton Capital’s 13F Portfolio: 0.88%

Number of Hedge Fund Holders: 104

Sea Limited (NYSE:SE) is a consumer internet company that offers a platform providing digital entertainment, electronic commerce, and digital financial services. The tech conglomerate is headquartered in Singapore, and heads three key businesses: Garena, Shopee, and SeaMoney.

Out of the elite hedge funds traced by Insider Monkey, 104 funds were bullish on Sea Limited (NYSE:SE), with stakes worth over $12.2 billion at the end of June. This is compared to 98 hedge funds with stakes valued at $10.4 billion in the previous quarter.

9. StoneCo Ltd. (NASDAQ:STNE)

Egerton Capital’s Stake Value: $192,530,000

Percentage of Egerton Capital’s 13F Portfolio: 0.95%

Number of Hedge Fund Holders: 44

StoneCo Ltd. (NASDAQ:STNE) is a provider of financial technology solutions, with a cloud-based platform for e-commerce across in-store, online, and mobile channels.

Armitage’s Egerton Capital owns 2.87 million shares in StoneCo Ltd. (NASDAQ:STNE) as of the end of the second quarter, amounting to $192.5 million, and making up 0.95% of Armitage’s 13F portfolio.

On September 3, HSBC analyst Neha Agarwala kept a Buy rating on StoneCo Ltd. (NASDAQ:STNE)’s stock but lowered the price target from $85 to $65.

JDP Capital Management mentioned StoneCo Ltd. (NASDAQ:STNE) in its Q2 2021 investor letter. Here is what they said:

“StoneCo (NYSE: STNE) has been in our portfolio since early 2019 and has appreciated 225% since. In the first half of 2021 the stock was down nearly 20% and was a drag on the fund’s performance.

Stone is a leading fintec company in Brazil that provides back-office software, loans and other financial services to small and medium sized businesses (SMBs). We have discussed Stone in past letters and the company’s “ladder up” from a card processor to a supplier of enterprise software used to sell financial products on top of such as working capital loans...” (Click here to see the full text)

8. Match Group, Inc. (NASDAQ:MTCH)

Egerton Capital’s Stake Value: $206,254,000

Percentage of Egerton Capital’s 13F Portfolio: 1.02%

Number of Hedge Fund Holders: 63

Match Group, Inc. (NASDAQ:MTCH) is the eighth stock on our list of 10 tech stocks to invest in today according to John Armitage’s Egerton Capital. Match Group, Inc. (NASDAQ:MTCH) is a Dallas-based internet and technology company that owns and manages the leading global portfolio of digital dating platforms including Tinder, Match.com, Meetic, OkCupid, PlentyofFish, and more.

Armitage’s Egerton Capital owns 1.27 million shares in Match Group, Inc. (NASDAQ:MTCH) as of the end of the second quarter, valued at $206.2 million, representing 1.02% of Armitage’s 13F portfolio.

At the end of the second quarter of 2021, 63 hedge funds in Insider Monkey’s elite database reported owning stakes in Match Group, Inc. (NASDAQ:MTCH), down from 68 in the previous quarter.

7. Yandex N.V. (NASDAQ:YNDX)

Egerton Capital’s Stake Value: $229,931,000

Percentage of Egerton Capital’s 13F Portfolio: 1.14%

Number of Hedge Fund Holders: 31

Yandex N.V. (NASDAQ:YNDX) is the next stock on our list of 10 tech stocks to invest in today according to John Armitage’s Egerton Capital. Yandex N.V. (NASDAQ:YNDX) is the biggest Russian technology company, and the second largest search engine in Russian on the internet today.

Armitage’s Egerton Capital owns 3.2 million shares in Yandex N.V. (NASDAQ:YNDX) as of the end of the second quarter, valued at $229.9 million, and making up 1.14% of Armitage’s 13F portfolio.

At the end of June, 31 hedge funds in Insider Monkey’s database owned stakes worth $1.36 billion in Yandex N.V. (NASDAQ:YNDX), up from 29 in the previous quarter with stakes valued at $1.26 billion. William B. Gray’s Orbis Investment Management has a $418.7 million stake in Yandex N.V. (NASDAQ:YNDX), making it the leading stakeholder of the tech company.

Polen Capital Management mentioned Yandex N.V. (NASDAQ:YNDX) in its Q2 2021 investor letter. Here is what they said:

“From a country perspective, weak performance from Russian companies Yandex drove relative performance lower. Yandex is the leading internet search platform in Russia and was the top detractor from both absolute and relative performance this quarter. This underperformance came about despite solid results in 2020 which showed Yandex’s total e-commerce gross merchandise value grew three-fold in 2020 to over ₽56 billion RUB. Specifically, in the fourth quarter of 2020, Yandex saw year-on-year growth of 127%.

In our view, Yandex is one of the highest quality businesses in our investment universe. It has built a defensible competitive moat around its core search business, reinvesting its cash flows in new growth areas to remain relevant in a fast-changing global internet landscape.

We think Yandex benefits from an innovative and forward-thinking management team, which is shaping the development of the Russian internet.

With solid execution, Yandex has the potential to transform into an ecosystem which the company’s Chief Technology Officer describes as the “Silicon Valley of Russia.” Yandex remains a top five holding in the Portfolio.”

6. PayPal Holdings, Inc. (NASDAQ:PYPL)

Egerton Capital’s Stake Value: $437,399,000

Percentage of Egerton Capital’s 13F Portfolio: 2.17%

Number of Hedge Fund Holders: 143

PayPal Holdings, Inc. (NASDAQ:PYPL) is the sixth stock on our list of 10 tech stocks to invest in today according to John Armitage’s Egerton Capital.

As of the end of the second quarter, Armitage’s Egerton Capital owns 1.5 million shares in PayPal Holdings, Inc. (NASDAQ:PYPL), amounting to $437.3 million, representing 2.17% of Armitage’s 13F portfolio.

The stock is quite popular among the smart money, as 143 hedge funds monitored by Insider Monkey were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of June. This is compared to the same number of hedge funds in the previous quarter as well. Axel Capital Management is the leading stakeholder in PayPal Holdings, Inc. (NASDAQ:PYPL), with stakes worth $11.4 million.

Here is what Wedgewood Partners has to say about PayPal Holdings Inc. in its Q3 2021 investor letter:

“Top performance detractors for the first quarter include PayPal. PayPal reported +40% growth in total payment volume to $311 billion during the second quarter’s most recent report. In spite of this impressive growth, the stock detracted from performance as the market became overly concerned about the pace at which its legacy eBay business rolled off. Despite the stock’s premium valuation, we continue to hold PayPal as a core position and think eBay represents short-term noise in PayPal’s longer-term drive to become a “super-app” with payments at its core.”

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Disclosure: None. 10 Tech Stocks to Invest in Today According to John Armitage's Egerton Capital is originally published on Insider Monkey.