Brad Gerstner Stock Portfolio: 10 Top Stock Picks
In this article, we discuss Brad Gerstner and his top 10 stock picks. If you want to read about some more stocks in the Gerstner portfolio, go directly to Brad Gerstner Stock Portfolio: 5 Top Stock Picks.
Starting an investment firm during the financial meltdown of 2008 is the sort of idea that only a maverick investor like Brad Gerstner can come up with. Gerstner, the chief of Altimeter Capital Management, founded his hedge fund in 2008 with just $3 million in seed money from family and friends. His fund has come a long since then. At the end of the third quarter of 2023, it had an equity portfolio worth $5.2 billion, with huge stakes in Snowflake Inc. (NYSE:SNOW), Meta Platforms, Inc. (NASDAQ:META), and Uber Technologies, Inc. (NYSE:UBER).
Gerstner has the perfect academic background for a career in finance. He has an undergraduate degree in Economics and Political Science, a law degree - which he paid for by day trading, and a postgraduate degree in Business Administration. He worked at several tech firms before joining PAR Capital as portfolio manager for three years. Gerstner has a knack for identifying the future of business, as his investments in firms like Airbyte, Discord, Benchling, Cerebras, Chainalysis, OpenSea, Hopin and Plaid have proven over the past few years.
Gerstner has a personal net worth of close to a billion dollars. His investing philosophy is staying long-term partners with companies as they enter public markets. His fund has over $15 billion in assets under management. In a recent interview with news platform CNBC, Gerstner outlined some of his thoughts on the present market situation. He said the new normal was looking very much like the old normal but investors had to get through the process of adjustment, and quickly.
“If we look back at the period between 2010-2020, it was roughly 2.8% on the Ten Year (Treasury Yield) and we are going back to 3% to 4%. The thing people cannot deal with is the volatility. However, nobody seems to be understanding that we have an envelope here for a soft landing. We are slowing down the economy, but the mispositioning here is that everybody was prepped for a hard landing. The reality is that the market has performed quite well this year, despite a regional banking crisis and conflicts in Ukraine and Israel.”
Our Methodology
These were picked from the investment portfolio of Altimeter Capital Management at the end of the third quarter of 2023. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2023 was used to quantify the popularity of each stock in the hedge fund universe.
Brad Gerstner of Altimeter Capital
Brad Gerstner Stock Portfolio: Top Stock Picks
10. Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS)
Number of Hedge Fund Holders: 14
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS) provides air transportation services for passengers, cargo, and mail. Regulatory filings show that Altimeter Capital Management owned over 379,000 shares of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS) at the end of September 2023 worth $2.5 billion, representing 0.04% of the portfolio.
On October 31, investment advisory Barclays maintained an Overweight rating on Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS) stock and lowered the price target to $9 from $11, noting that capacity constraints by GTF engines and higher jet fuel puts the firm under a complex environment for 2024.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Teewinot Capital Advisers is a leading shareholder in Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS) with 4.1 million shares worth more than $28 million.
Just like Snowflake Inc. (NYSE:SNOW), Meta Platforms, Inc. (NASDAQ:META), and Uber Technologies, Inc. (NYSE:UBER), Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS) is one of the top stocks in the portfolio of Brad Gerstner.
9. MercadoLibre, Inc. (NASDAQ:MELI)
Number of Hedge Fund Holders: 77
MercadoLibre Inc. (NASDAQ:MELI) operates online commerce platforms in Latin America. Latest filings show that Altimeter Capital Management owned 2,980 shares of MercadoLibre Inc. (NASDAQ:MELI) at the end of September 2023 worth $3.7 million, representing 0.07% of the portfolio.
On October 16, investment advisory Barclays maintained an Overweight rating on MercadoLibre, Inc. (NASDAQ:MELI) stock and lowered the price target to $1,550 from $1,625.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Generation Investment Management is a leading shareholder in MercadoLibre Inc. (NASDAQ:MELI) with 580,023 shares worth more than $687 million.
In its Q3 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and MercadoLibre, Inc. (NASDAQ:MELI) was one of them. Here is what the fund said:
“Top contributors to performance for the quarter included Latin American marketplace MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre rose as a result of continued share gains across key markets and supportive Brazilian regulations aimed at creating a level playing field in cross-border e-commerce.”
8. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 67
PDD Holdings Inc. (NASDAQ:PDD) is a Shanghai-based company that owns and operates an ecommerce platform. 13F filings show that Altimeter Capital Management owned 646,280 shares of Pinduoduo Inc. (NASDAQ:PDD) at the end of September 2023 worth $63 million, representing 1.2% of the portfolio.
On November 1, investment advisory UBS assumed coverage of PDD Holdings Inc. (NASDAQ:PDD) stock with a Buy rating and a price target of $137, noting the value-for-money positioning of the firm would make it resilient in an economic downcycle.
At the end of the second quarter of 2023, 67 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in PDD Holdings Inc. (NASDAQ:PDD), compared to 62 in the preceding quarter worth $3.1 billion.
7. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 278
Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology firm with core interests in ecommerce. Securities filings show that Altimeter Capital Management owned over 1.2 million shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of September 2023 worth $159 million, representing 3.02% of the portfolio.
Reports indicate that Amazon.com, Inc. (NASDAQ:AMZN) will teach around 2 million people the basics of artificial intelligence with an aim to fill a gap in AI talent as the generative AI efforts of the firm fall behind other tech rivals.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) with 34 million shares worth more than $4.3 billion.
In its Q3 2023 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon continues to showcase it’s place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement.
AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition.
Further, our investment case on company profitability driven by AWS and advertising continues to unfold, delivering nearly $8 billion in free cash flow over the trailing twelve months and a net margin of 5%. We expect both to move higher with the mix shift of more profitable businesses growing fastest continuing to take effect.
At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”
Number of Hedge Fund Holders: 175
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. Latest data shows that Altimeter Capital Management owned 772,210 shares of NVIDIA Corporation (NASDAQ:NVDA) at the end of the third quarter of 2023 worth $335 million, representing 6.37% of the portfolio.
On November 15, investment advisory Citi maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock with a price target of $575, noting that buy-side estimates for data center revenue for the next two quarters were well above Wall Street consensus.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 20 million shares worth more than $8.8 billion.
Alongside Snowflake Inc. (NYSE:SNOW), Meta Platforms, Inc. (NASDAQ:META), and Uber Technologies, Inc. (NYSE:UBER), NVIDIA Corporation (NASDAQ:NVDA) is one of the top stocks in the portfolio of Brad Gerstner.
In its Q3 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“At the portfolio level, the positive fundamental trends we noticed in the second quarter continued into the third quarter as well – many of our companies are reporting stability or slight improvement in business trends. Weighted average 2023 revenue growth expectations for the portfolio were up 3.8% during the third quarter or up 0.8% if we exclude NVIDIA. We wrote at length about NVIDIA earlier this year, but it is worth mentioning that the company has continued to exceed its own projections and the Street’s most optimistic expectations. After raising its revenue and EPS guidance for 2023 by 40% and 69%, respectively, following its last quarter, NVIDIA increased it further by 26% and 35%, respectively, after reporting the most recent one. Consensus expectations now call for revenues to grow 94% this year, while earnings per share are expected to increase by 192%. You may have seen these kinds of growth rates before, but we doubt you saw them from a company generating $50 billion in revenues. The skeptics who continue to question and doubt the accelerating demand for Generative artificial intelligence forgot to tell NVIDIA about it. But we digress…back to the portfolio…profit expectations have risen even faster than revenues and were up 11% during the third quarter (or up 7.8% ex-NVIDIA) with margin expectations up 149bps (107bps ex-NVIDIA). So, broadly speaking, our companies are seeing improvement in overall business trends, which flow through to their bottom lines, driving higher margins. We are also starting to see the benefits of leaner cost structures and more disciplined capital allocation compared to two or three years ago when capital was both cheaper and more readily available.”
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Disclosure. None. Brad Gerstner Stock Portfolio: 10 Top Stock Picks is originally published on Insider Monkey.
