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9 Stocks To Buy According To Dennis Goldstein’s Rip Road Capital

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·9 min read
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In this article, we discuss 9 stock to buy of Dennis Goldstein's Rip Road Capital. If you want to skip our detailed analysis of Goldstein’s history, investment philosophy, and hedge fund performance, go directly to 4 Stocks To Buy According To Dennis Goldstein's Rip Road Capital.

Dennis Goldstein has been the chief investment officer at Rip Road Capital since December 2017. Rip Road Capital is an investment management firm based in Boston, with an investment portfolio worth over $338 million as of the third quarter 2021.

Dennis Goldstein completed his Bachelor’s from Dartmouth College in 1987, and joined Morgan Stanley (NYSE:MS) the same year as a financial analyst. In 1992, he joined The Boston Consulting Group as a manager, where he served for six years. From 2002 to 2016, Goldstein was the managing director of Bain Capital, a private investment firm in Boston. Dennis Goldstein is a Stanford alum, having received his MBA in 1992.

The Q3 portfolio of Rip Road Capital has stocks concentrated in the healthcare, information technology, consumer discretionary, consumer staples, and communications sectors, with the top ten holdings comprising 71.45% of the 13F portfolio. The largest holding of Rip Road Capital is Sea Limited (NYSE:SE), which accounts for 9.89% of the firm’s Q3 portfolio.

Some of the most notable stocks in Goldstein’s Q3 portfolio are Pinterest, Inc. (NYSE:PINS), Target Corporation (NYSE:TGT), and The TJX Companies, Inc. (NYSE:TJX), among others discussed extensively below.

9 Stocks To Buy According To Dennis Goldstein's Rip Road Capital
9 Stocks To Buy According To Dennis Goldstein's Rip Road Capital

Photo by Austin Distel on Unsplash

Our Methodology

The stocks are ranked according to Rip Road Capital’s stake value in each holding as of Q3. To give more context on each company, we have mentioned the number of hedge funds that were bullish on these stocks at the end of the third quarter, Q3 earnings, and the analyst ratings. With this context in mind, let’s discuss the top 9 stock picks of Dennis Goldstein's Rip Road Capital.

Stocks To Buy According To Dennis Goldstein's Rip Road Capital

9. The TJX Companies, Inc. (NYSE:TJX)

The TJX Companies, Inc. (NYSE:TJX) is an American chain of discount department stores, with signature brands like TJ Maxx, Marshalls, HomeGoods, HomeSense, and Sierra, among others. The TJX Companies, Inc. (NYSE:TJX) is present in nine countries, with over 4500 stores and 4 e-commerce websites. It is one of Dennis Goldstein’s top stock picks.

Rip Road Capital owns 271,206 shares of The TJX Companies, Inc. (NYSE:TJX), worth $17.89 million, making up 5.28% of the firm’s Q3 portfolio.

Out of the 867 hedge funds tracked by Insider Monkey, 62 funds reported owning stakes in The TJX Companies, Inc. (NYSE:TJX) at the end of Q3, up from 56 in the prior quarter.

Laura Champine, an analyst at Loop Capital, downgraded The TJX Companies, Inc. (NYSE:TJX) on October 14 from Buy to Hold, lowering the price target from $80 to $65.

Here is what Qualivian Investment Partners has to say about The TJX Companies, Inc. (NYSE:TJX) in its Q2 2021 investor letter:

“TJX Companies: While it still outperformed the S&P 500, TJX landed in the bottom three as its stock’s tepid performance reflected the broader underperformance of stocks levered to post-COVID reopening. These were muted in the quarter given the resurgence of COVID cases due to the Delta variant. Its actual results, which it reported on August 18th, were outstanding, beating across the board on both top and bottom lines and showing strong operating leverage in the operating profit line. Same store sales were up an impressive 20% overall. We remain very confident in TJX’s moat in that its treasure hunt format is hard to replicate for the likes of Amazon and Walmart.”

8. Target Corporation (NYSE:TGT)

Rip Road Capital’s Stake Value: $18,029,000

Percentage of Rip Road Capital’s 13F Portfolio: 5.32%

Number of Hedge Fund Holders: 49

Target Corporation (NYSE:TGT) is an American retail giant operating as a chain of discount stores, winning over the target market for cheap yet good quality products. Target Corporation (NYSE:TGT) offers grocery, furniture, apparel, home goods, baby essentials, and electronics and has a strong customer base across the United States. Target Corporation (NYSE:TGT) is one of the top stock picks of Dennis Goldstein's Rip Road Capital as of Q3 2021. Rip Road Capital holds an $18 million stake in Target Corporation (NYSE:TGT), which accounts for 5.32% of the firm’s portfolio.

Target Corporation (NYSE:TGT) is a popular stock among the smart money, with 49 hedge funds in Insider Monkey’s database of elite funds holding stakes worth $4.34 billion in the company at the end of September.

Kate McShane from Goldman Sachs on October 18 removed Target Corporation (NYSE:TGT) from the firm’s Conviction Buy List, but kept a Buy rating on the stock. She raised the price target from $281 to $308. McShane observed that Target Corporation (NYSE:TGT) has achieved double digit growth over the past 18 months, which she believes is not sustainable in the future. However, the company might retain the additional customers it gained.

Here is what Nelson Capital Management has to say about Target Corporation in its Q2 2021 investor letter:

“We added Target (tkr: TGT) to our consumer staples sector. Target offers a broad array of products in owned and known brand items at affordable prices. Its omni-channel fulfilment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target is an attractive holding.”

7. Peloton Interactive, Inc. (NASDAQ:PTON)

Rip Road Capital’s Stake Value: $18,298,000

Percentage of Rip Road Capital’s 13F Portfolio: 5.40%

Number of Hedge Fund Holders: 62

An exercise equipment and media company from New York, Peloton Interactive, Inc. (NASDAQ:PTON) is one of Dennis Goldstein’s Rip Road Capital’s top stock picks. Peloton Interactive, Inc. (NASDAQ:PTON) offers bicycles and treadmills that are connected to the internet, so users can access different exercise regimens via their digital membership with the company, which is paid for on a subscription basis. Peloton Interactive, Inc. (NASDAQ:PTON) reaches out to customers via their interactive app, and also sells sports accessories and apparel on their website.

Rip Road Capital owns 210,200 shares of Peloton Interactive, Inc. (NASDAQ:PTON) as of the third quarter of 2021, worth $18.2 million. The stock accounts for 5.40% of the firm’s 13F portfolio.

Peloton Interactive, Inc. (NASDAQ:PTON) is sought after by hedge funds, with 62 funds tracked by Insider Monkey bullish on the stock at the end of September, down from 67 in the previous quarter.

Like Pinterest, Inc. (NYSE:PINS), Target Corporation (NYSE:TGT), and The TJX Companies, Inc. (NYSE:TJX), Peloton Interactive, Inc. (NASDAQ:PTON) is a notable stock in Dennis Goldstein’s Q3 portfolio.

Here is what Carillon Tower Advisers has to say about Peloton Interactive, Inc. (NASDAQ:PTON) in its Q2 2021 investor letter:

“Peloton Interactive operates a connected fitness platform offering live and on-demand classes allowing users to exercise at home. The firm’s shares were pressured in the quarter after Peloton announced a voluntary recall for both its legacy treadmill (Peloton Tread+) and its newly-launched base model treadmill (Peloton Tread). The issue surrounding the latter is somewhat troubling, as it appears it may be the result of an engineering flaw. This new treadmill offering was expected to be a key growth driver in the second half of 2021, and this development reduces our confidence in Peloton’s product pipeline. Therefore, we sold the stock.”

6. Chewy, Inc. (NYSE:CHWY)

Rip Road Capital’s Stake Value: $18,340,000

Percentage of Rip Road Capital’s 13F Portfolio: 5.41%

Number of Hedge Fund Holders: 32

Chewy, Inc. (NYSE:CHWY) is an e-commerce platform offering pet food and pet accessories across the United States. Chewy, Inc. (NYSE:CHWY) is a one-stop-shop for pet owners to select what their animals need from over 2000 brands, making shopping convenient and fun. Chewy, Inc. (NYSE:CHWY) is a subsidiary of PetSmart, which acquired a majority stake in Chewy, Inc. (NYSE:CHWY) in 2017, for $3.35 billion. Chewy, Inc. (NYSE:CHWY) is a top stock pick of Dennis Goldstein's Rip Road Capital.

Rip Road Capital owns an $18.34 million stake in Chewy, Inc. (NYSE:CHWY) as of the end of the third quarter, which accounts for 5.41% of the firm’s investments for the period.

At the end of September, 32 hedge funds were long Chewy, Inc. (NYSE:CHWY), down from 43 in the previous quarter.

Here is what ClearBridge Investments has to say about Chewy, Inc. (NYSE:CHWY) in its Q2 2021 investor letter:

“Some of our best performing holdings over the last several quarters took a pause during the strong up market in the second quarter. Chewy, which gave back some gains over fears that a return of pet owners to brick-and-mortar retailers will threaten the company’s e-commerce business. We maintain confidence Chewy will be able to maintain the customer relationships it established during pandemic lockdowns as well as expand into international markets.”

5. Noodles & Company (NASDAQ:NDLS)

Rip Road Capital’s Stake Value: $19,526,000

Percentage of Rip Road Capital’s 13F Portfolio: 5.76%

Number of Hedge Fund Holders: 20

Noodles & Company (NASDAQ:NDLS) is a fast-casual chain of restaurants offering a variety of noodle dishes, kinds of pasta, sides, soups, and desserts as their main offering to customers. Noodles & Company (NASDAQ:NDLS) was one of the first restaurants to serve fast-casual quick-serve meals back in 1995, and to this day it remains a popular American go-to food stop. Noodles & Company (NASDAQ:NDLS) is one of the top stocks in Dennis Goldstein’s Q3 portfolio.

With 1.65 million shares worth $19.52 million, Noodles & Company (NASDAQ:NDLS) accounts for 5.76% of Rip Road Capital’s Q3 portfolio.

The third quarter earnings were disclosed by Noodles & Company (NASDAQ:NDLS) on October 27, and the EPS for the quarter came in at $0.12, exceeding estimates by $0.03.

The leading stakeholder in Noodles & Company (NASDAQ:NDLS) is Mill Road Capital Management, with 4.75 million shares valued at $56 million. Overall, 20 hedge funds were bullish on Noodles & Company (NASDAQ:NDLS) at the end of the third quarter.

Like Pinterest, Inc. (NYSE:PINS), Target Corporation (NYSE:TGT), and The TJX Companies, Inc. (NYSE:TJX), Noodles & Company (NASDAQ:NDLS) is a notable stock in Dennis Goldstein’s Q3 portfolio.

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Disclosure: None. 9 Stocks To Buy According To Dennis Goldstein's Rip Road Capital is originally published on Insider Monkey.