Top 10 Stock Picks of Mark Moore’s ThornTree Capital

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In this piece, we will take a look at the top 10 stock picks of Mark Moore’s ThornTree Capital. If you want to skip ahead to the top five stocks, head on over to the Top 5 Stock Picks of Mark Moore’s ThornTree Capital.

ThornTree Capital Partners is a global equity long/short fund located in Boston, Massachusetts. It offers investment advisory services and has been in the business for roughly six years. At the helm is the firm’s founder Mr. Mark Moore, who has more than a decade of experience working in the financial sector.

Mr. Moore, like several other of his counterparts in the hedge fund world, has a Master’s in Business Administration (MBA) from the Harvard University’s Harvard Business School. Prior to that, however, the executive attended the University of Michigan for a Bachelor’s of Science in Industrial Engineering. During his Bachelor’s, he focused on linear programming and optimization, a unique choice for someone who would go on to lead a hedge fund with a portfolio worth hundreds of millions of dollars.

By the end of the second quarter of this year, ThornTree Capital had more than $700 million in its stock portfolio, with the holdings evenly spread out over its constituent companies. The list of companies spans firms across several sectors, including social media, cloud computing and payments.

The hedge fund’s largest stakes are in Zillow Group, Inc. (NASDAQ:Z), Meta Platforms, Inc. (NASDAQ:FB) and Smartsheet Inc. (NYSE:SMAR). Together, the three companies represent less than one fifth of ThornTree Capital’s portfolio value. The firm heavily trimmed its holdings in the three companies during the second quarter of this year, reducing stakes in Zillow and Smartsheet by 22%, each.

Our Methodology

In order to determine the top stock picks of Mr. Moore’s investment fund, we took a look at ThornCpital’s Form 13-F filings for the second quarter of this year with the Securities and Exchange Commission.

Why pay attention to hedge fund holdings? 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.

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Top 10 Stock Picks of Mark Moore’s ThornTree Capital

10. Azul S.A. (NYSE:AZUL)

Value of Mr. Moore’s Stake: $33.4 Million

Percentage of ThornTree Capital’s 13F Portfolio: 4.51%

Number of Hedge Fund Holders: 10

Azul S.A. (NYSE:AZUL) is a Brazilian logistics provider headquartered in Barueri, Brazil. The company uses its fleet of 162 aircraft to cover hundreds of destinations all over the world, alongside having its own investment fund and other services such as holiday packages.

During its third quarter, Azul S.A. (NYSE:AZUL) earned Brazilian R$2.7 billion in revenue and made a loss of -$1.08 non-GAAP earnings per diluted share (EPADS), beating analyst estimates on both counts. During the same period, 10 of the 873 hedge funds polled by Insider Monkey had holdings in the company.

Azul S.A. (NYSE:AZUL) price target was lowered to $25 by Citi in an investment note released in November, with the bank citing currency depreciation and soaring oil prices as negatives and vaccination rates alongside new U.S. travel guidelines as positives for the company. ThornTree Capital holds 1.2 million shares of the company that represents 4.51% of Mr. Moore’s portfolio and are worth $33.4 million.

Azul S.A. (NYSE:AZUL)’s largest shareholder is Howard Marks’s Oaktree Capital Management, which owns 1.8 million shares for a stake that is worth $49 million.

Alongside Meta Platforms, Inc. (NASDAQ:FB), Smartsheet Inc. (NYSE:SMAR) and Zillow Group, Inc. (NASDAQ:Z), Azul S.A. (NYSE:AZUL) is on the list of Mr. Moore’s top stock picks.

9. Penn National Gaming, Inc. (NASDAQ:PENN)

Value of Mr. Moore’s Stake: $33.5 Million

Percentage of ThornTree Capital’s 13F Portfolio: 4.53%

Number of Hedge Fund Holders: 40

Penn National Gaming, Inc. (NASDAQ:PENN) provides video game terminals and other gaming properties and facilities in the United States. It was founded in 1972 and is based in Wyomissing, Pennsylvania. It also provides gambling applications and horse racing tracks.

Mr. Moore’s hedge fund owned 439,108 Penn National Gaming, Inc. (NASDAQ:PENN) shares by the end of the second quarter of this year, in a stake that was worth $33.5 million and represented 4.53% of his company’s portfolio. Out of the 873 hedge funds polled by Insider Monkey during the same time period, 40 had held a stake in Penn National Gaming, Inc. (NASDAQ:PENN).

The company earned $1.5 billion in revenue and $0.52 in GAAP EPS during its third fiscal quarter, missing analyst estimates for EPS and meeting those for revenue. In a November 2021 analyst note, Deutsche Bank upgraded Penn National Gaming, Inc. (NASDAQ:PENN) to Hold from Sell and kept its price target unchanged at $31, outlining the company’s massive underperformance with respect to its peers.

Penn National Gaming, Inc. (NASDAQ:PENN)’s largest investor is Parag Vora’s HG Vora Capital Management who owned 2.5 million shares worth $191 million by the end of the second quarter of this year.

In its second quarter 2021 investor letter, investment management firm Carillon Tower Advisers, mentioned Penn National Gaming, Inc. (NASDAQ:PENN) and outlined that:

Penn National Gaming is a diversified omnichannel provider of retail and online gaming, live racing, and sports betting entertainment. After a substantial run, Penn National Gaming sold off during the quarter, reflecting a profit taking in a number of sports and online gambling stocks. However, fundamentals are healthy in firm’s regional gaming markets and its sports betting initiatives remain strong.”

8. Williams-Sonoma, Inc. (NYSE:WSM)

Value of Mr. Moore’s Stake: $35.4 Million

Percentage of ThornTree Capital’s 13F Portfolio: 4.7%

Number of Hedge Fund Holders: 34

Williams-Sonoma, Inc. (NYSE:WSM) is a home product specialty retailer that provides cooking, dining and entertainment products. It is an old American company founded in 1956 and headquartered in San Francisco, California.

During its second quarter, Williams-Sonoma, Inc. (NYSE:WSM) earned $1.95 billion in revenue and $3.24 in non-GAAP earnings per share, beating analyst estimates on both counts. During the same period, 34 of 873 hedge funds polled by Insider Monkey had holdings in the company. ThornTree Capital holds 221,743 Williams-Sonoma, Inc. (NYSE:WSM) shares that represent 4.7% of Mr. Moore’s portfolio and are worth $35.4 million.

Williams-Sonoma, Inc. (NYSE:WSM) price target was raised to $199 by RBC Capital in an August 2021 investment note. The research firm was impressed by the company’s latest earnings report and future targets.

Williams-Sonoma, Inc. (NYSE:WSM)’s largest shareholder is Robert Joseph Caruso’s Select Equity Group, which owns 1.8 million shares for a stake that is worth $291 million.

Alongside Meta Platforms, Inc. (NASDAQ:FB), Smartsheet Inc. (NYSE:SMAR) and Zillow Group, Inc. (NASDAQ:Z), Williams-Sonoma, Inc. (NYSE:WSM) is on the list of Mr. Moore’s top stock picks.

7. DocuSign, Inc. (NASDAQ:DOCU)

Value of Mr. Moore’s Stake: $36.5 Million

Percentage of ThornTree Capital’s 13F Portfolio: 4.92%

Number of Hedge Fund Holders: 58

DocuSign, Inc. (NASDAQ:DOCU) is an American company that deals with e-signature services and solutions.

Mr. Moore held 130,662 shares of DocuSign, Inc. (NASDAQ:DOCU) that were worth $36.5 million and which constituted 4.92% of his portfolio by the end of the second quarter.

The company’s largest stakeholder is Andrew Dalrymple and Barry Mccorkell’s Aubrey Capital Management, which holds 34,600 shares worth $9.6 billion.

In a September 2021 investor note, Evercore ISI raised DocuSign, Inc. (NASDAQ:DOCU)’s price target to $320 along with an Outperform rating, citing strong results and plenty of future growth opportunities.

In its second quarter 2021 investor note, investment firm Carillon Tower Advisers mentioned DocuSign, Inc. (NASDAQ:DOCU) and outlined that:

DocuSign provides electronic signature solutions. The firm reported an excellent quarter and investors have appreciated the strong growth combined with the excellent margins the company has posted. DocuSign has a long runway of growth ahead and we believe that it remains in a favorable position to continue gaining market share from traditional manual and paper-based signature solutions.”

6. XP Inc. (NASDAQ:XP)

Value of Mr. Moore’s Stake: $38.6 Million

Percentage of ThornTree Capital’s 13F Portfolio: 5.2%

Number of Hedge Fund Holders: 25

XP Inc. (NASDAQ:XP) is a Brazilian financial services provider that deals in pension plans and investment banking products. The company is headquartered in Sao Paulo and it was founded in 2001. It serves corporate, retail and institutional investors.

During its third quarter, XP Inc. (NASDAQ:XP) earned R$3 billion in net revenue and R$1 billion in net income, to mark for an impressive 51% annual revenue growth. By the end of the second quarter, 25 of 873 hedge funds polled by Insider Monkey had holdings in the company. ThornTree Capital held 888,326 XP Inc. (NASDAQ:XP) shares that represent 5.2% of Mr. Moore’s portfolio and are worth $38.6 million at Q2 2021 end.

XP Inc. (NASDAQ:XP) price target was kept at $50 by RBC Capital in an October 2021 investment note alongside a rating upgrade to Overweight.

Panayotis Takis Sparaggis’s Alkeon Capital Management is XP Inc. (NASDAQ:XP) largest shareholder by owning 4.2 million shares worth $186 million.

Alongside Meta Platforms, Inc. (NASDAQ:FB), Smartsheet Inc. (NYSE:SMAR) and Zillow Group, Inc. (NASDAQ:Z), XP Inc. (NASDAQ:XP) is on the list of Mr. Moore’s favorite stocks.

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Disclosure. None. Top 10 Stock Picks of Mark Moore’s ThornTree Capital is originally published on Insider Monkey.