Top 10 Stock Picks of Joe Magyer’s Lakehouse Capital

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In this article, we discuss the top 10 stock picks of Joe Magyer’s Lakehouse Capital. If you want to skip our detailed analysis of these stocks, go directly to the Top 5 Stock Picks of Joe Magyer’s Lakehouse Capital.

Joe Magyer is the co-founder of Lakehouse Capital, having established the Sydney-based investment management firm in 2016. Lakehouse Capital has two primarily managed funds, namely the Lakehouse Small Companies Fund and the Lakehouse Global Growth Fund. The firm invests in small, fast-growing companies across Australia and New Zealand, as well as mid to large cap global companies in developed markets via these managed funds. 

Joe Magyer holds a Bachelor’s degree in Business Administration from the University of Georgia and a Master’s in Finance from Georgia State University. He is also a chartered financial analyst. Magyer has experience in investment roles across the US and Australia, having served as the director of research at The Motley Fool Australia. In addition to that, he was the portfolio manager of Australia’s Motley Fool Pro, which is a long-only equity portfolio. Before that, Magyer was the lead advisor of Motley Fool Inside Value, and he also made several contributions to the Australian Financial Review, Livewire, CNBC, and Sky News Business.

Magyer manages a portfolio worth over $177 million at Lakehouse Capital, with a top ten holdings concentration of 91.75%. As per the Q3 13F filings, the largest holding in Joe Magyer’s portfolio is Meta Platforms, Inc. (NASDAQ:FB), which represents 13.39% of his total investments. 

Lakehouse Capital’s portfolio, as of September this year, is concentrated in the information technology, industrials, finance, consumer staples, consumer discretionary, and communications sectors. The most notable stocks in Lakehouse Capital’s Q3 portfolio are Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Visa Inc. (NYSE:V), among others discussed in detail below.

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Our Methodology

With this context in mind, let’s discuss the top 10 stock picks of Joe Magyer’s Lakehouse Capital. We used Lakehouse Capital’s Q3 portfolio to select the firm’s top stocks. 

Top Stock Picks of Joe Magyer’s Lakehouse Capital

10. Avalara, Inc. (NYSE:AVLR)

Lakehouse Capital’s Stake Value: $9,846,000

Percentage of Lakehouse Capital’s 13F Portfolio: 5.56%

Number of Hedge Fund Holders: 29

Avalara, Inc. (NYSE:AVLR), a company offering tax compliance software, is one of Joe Magyer’s top stock picks as of September this year, with his investment firm owning 56,336 shares in Avalara, Inc. (NYSE:AVLR), worth $9.8 million. This stock represents 5.56% of Lakehouse Capital’s Q3 portfolio. 

Avalara, Inc. (NYSE:AVLR) posted its Q3 results on November 4. EPS in the period totaled -$0.03, beating estimates by $0.03. The revenue came in at $181.17 million, up 41.67% from the prior-year quarter, exceeding estimates by $10.83 million. 

At the end of June, 29 hedge funds reported owning stakes in Avalara, Inc. (NYSE:AVLR), down from 41 in the preceding quarter. The total value of these stakes is over $1 billion. Alkeon Capital Management is the leading stakeholder in Avalara, Inc. (NYSE:AVLR), with 2.86 million shares valued at $500.68 million. 

In addition to Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Visa Inc. (NYSE:V), Avalara, Inc. (NYSE:AVLR) is a notable stock in Joe Magyer’s Q3 portfolio. 

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

“Also within IT, we purchased shares of Avalara, a software maker providing cloud-based solutions for transaction tax compliance across global markets. Avalara supports the growth of ecommerce by addressing the complexities of tax calculations and return processing across different tax jurisdictions. Growth drivers include partnerships with Shopify and integration of its software into Adobe and Salesforce platforms.”

9. MarketAxess Holdings Inc. (NASDAQ:MKTX)

Lakehouse Capital’s Stake Value: $12,577,000

Percentage of Lakehouse Capital’s 13F Portfolio: 7.10%

Number of Hedge Fund Holders: 31

MarketAxess Holdings Inc. (NASDAQ:MKTX) is a New York-based financial technology company that allows institutional investors and credit brokers to trade in credit instruments and financial products via its electronic trading platform. As of Q3 2021, Lakehouse Capital holds a $12.5 million stake in MarketAxess Holdings Inc. (NASDAQ:MKTX), which represents 7.1% of the firm’s total investments.

On October 6, Raymond James analyst Patrick O’Shaughnessy lowered the price target on MarketAxess Holdings Inc. (NASDAQ:MKTX) to $500 from $530 and kept an Outperform rating on the shares. This rating reflects the expected Q3 results, trading volume, and fee capture trends.

MarketAxess Holdings Inc. (NASDAQ:MKTX), on October 20, reported its Q3 earnings. EPS for the third quarter equaled $1.52, beating estimates by $0.08. The $162.09 million revenue was down 1.17% as compared to the prior-year quarter, but exceeded analysts’ estimates by $0.73 million. 

GuardCap Asset Management is the largest MarketAxess Holdings Inc. (NASDAQ:MKTX) stakeholder as per Insider Monkey’s records, with 1.18 million shares worth $497.8 million. Overall, 31 hedge funds in the database of Insider Monkey were long MarketAxess Holdings Inc. (NASDAQ:MKTX) at the end of June this year, with a total stake value of $605.3 million. 

Here is what Baron Funds has to say about MarketAxess Holdings Inc. (NASDAQ:MKTX) in its Q3 2021 investor letter:

“Adverse stock selection in Financials, linked to the underperformance of electronic trading platform MarketAxess Holdings Inc., was somewhat offset by the Fund’s higher exposure to this top performing sector.”

8. Monster Beverage Corporation (NASDAQ:MNST)

Lakehouse Capital’s Stake Value: $14,481,000

Percentage of Lakehouse Capital’s 13F Portfolio: 8.17%

Number of Hedge Fund Holders: 46

Monster Beverage Corporation (NASDAQ:MNST) is an American beverage company that is known for its energy drinks including Monster Energy, Burn, and Relentless, among others. Magyer’s Lakehouse Capital holds a $14.4 million stake in Monster Beverage Corporation (NASDAQ:MNST), which represents 8.17% of the firm’s Q3 portfolio. 

At the end of the second quarter of 2021, 46 hedge funds reported owning stakes in Monster Beverage Corporation (NASDAQ:MNST), up from 45 in the preceding quarter. The total value of these stakes amounted to $2.31 billion at the end of June. The leading Monster Beverage Corporation (NASDAQ:MNST) stakeholder is Jim Simons’ Renaissance Technologies, with a $614.2 million stake in the beverage corporation. 

On November 2,  Deutsche Bank analyst Steve Powers lowered the price target on Monster Beverage Corporation (NASDAQ:MNST) to $105 from $108 and kept a Buy rating on the shares. He stated that even though demand for the products remained solid, he was wary about the Q3 results, as well as the supply chain disruptions which would likely put pressure on gross margins. 

Monster Beverage Corporation (NASDAQ:MNST) reported its Q3 results on November 4, with EPS for the quarter equaling $0.63, missing estimates by -$0.04. Revenue for the period came in at $1.41 billion, up 13.17% year-over-year. 

7. CoStar Group, Inc. (NASDAQ:CSGP)

Lakehouse Capital’s Stake Value: $15,713,000

Percentage of Lakehouse Capital’s 13F Portfolio: 8.87%

Number of Hedge Fund Holders: 49

CoStar Group, Inc. (NASDAQ:CSGP) is a technology company from Washington D.C. that offers information, data analytics, and marketing services to the commercial property industry. The company operates in  the United States, Canada, the United Kingdom, France, Germany, and Spain. 

Joe Magyer, via Lakehouse Capital, holds 182,583 shares in CoStar Group, Inc. (NASDAQ:CSGP) as of Q3 2021, worth $15.7 million, representing 8.87% of the firm’s portfolio. 

CoStar Group, Inc. (NASDAQ:CSGP) announced earnings for the third quarter on October 26. EPS in the period came in at $0.25, beating estimates by $0.02. Revenue for Q3 totaled $499.32 million, outperforming estimated revenue by $1.35 million. The solid Q3 results led to Truist analyst Andrew Jeffrey raising the price target on CoStar Group, Inc. (NASDAQ:CSGP) to $110 from $98 and keeping a Buy rating on the shares on October 27.

At the end of June, 49 hedge funds monitored by Insider Monkey’s database of 873 elite funds were bullish on CoStar Group, Inc. (NASDAQ:CSGP), with Charles Akre’s Akre Capital Management being the leading stakeholder of the company, holding an $840 million stake. 

Here is what Baron Funds has to say about CoStar Group, Inc. (NASDAQ:CSGP) in its Q3 2021 investor letter:

“Outperformance of investments in Communication Services and Industrials, higher exposure to the better performing Health Care sector, and lack of exposure to the lagging Consumer Staples sector added the most value. CoStar Group, Inc. performed well after investors cheered the company’s decision to enter the residential real estate market.”

6. MercadoLibre, Inc. (NASDAQ:MELI)

Lakehouse Capital’s Stake Value: $16,095,000

Percentage of Lakehouse Capital’s 13F Portfolio: 9.09%

Number of Hedge Fund Holders: 74

MercadoLibre, Inc. (NASDAQ:MELI) operates an online platform facilitating ecommerce and online auctions for Latin American customers. Magyer’s Lakehouse Capital holds a $16 million stake in MercadoLibre, Inc. (NASDAQ:MELI), as of September this year, which accounts for 9.09% of the hedge fund’s total 13F securities. 

At the end of Q2, 74 hedge funds were long MercadoLibre, Inc. (NASDAQ:MELI), up from 69 in the preceding quarter, with the total stake value exceeding $4 billion. 

In addition to Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Visa Inc. (NYSE:V), MercadoLibre, Inc. (NASDAQ:MELI) is a notable stock in Joe Magyer’s Q3 portfolio. 

Here is what Polen Capital has to say about MercadoLibre, Inc. (NASDAQ:MELI) in its Q2 2021 investor letter:

“Argentina-based MercadoLibre operates Latin America’s leading ecommerce website and digital wallet. Both e-commerce and consumer finance are underpenetrated among the nearly 400 million citizens living in the company’s three largest markets: Brazil, Argentina, and Mexico.

MercadoLibre’s digitally native solution gives more than 70 million users an easy access point for both online shopping and a digital wallet.

From humble beginnings as a third-party marketplace, MercadoLibre’s management built the business over the last twenty years by steadily expanding the platform’s reach with new services to suit both merchants and consumers. Today’s offerings include financing capabilities for buyers and sellers, logistics, loyalty programs, classifieds listings, and grocery items. We think MercadoLibre can compound earnings at a 25% rate for the next five years.”

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Disclosure: None. Top 10 Stock Picks of Joe Magyer’s Lakehouse Capital is originally published on Insider Monkey.