In this piece, we will take a look at the top ten stock picks of Malcolm Levine’s Dendur Capital. If you want to skip our introduction to the hedge fund and its founder, head on over to Top 5 Stock Picks of Malcolm Levine’s Dendur Capital.
Dendur Capital is an American hedge fund that is based in New York, New York. The firm was set up by Mr. Malcolm Levine in 2019, and Mr. Levine continues to serve as its managing partner and chief investment officer.
The hedge fund is one of the youngest in its industry that is filled with other funds that have been investing, profiting, and making losses for decades. It also has a relatively small portfolio size and an equally small client base. The firm has a handful of clients under its wing, and as of the second quarter of this year, its portfolio was worth a modest $479 million.
Looking at its returns for 2022, Dendur Capital’s performance peaked in August, when its portfolio grew by 23%, beating the S&P 500 stock market index by 10%. Since then, the fund has also suffered like major indexes, as stocks tumble in the aftermath of a hawkish approach by the Federal Reserve towards curbing inflation by making record setting interest rate hikes in one go.
This approach is using the wrong metrics, according to founder and manager of Ark Investments Ms. Cathie Wood, who penned a strongly worded letter to the Federal Reserve in October 2022 which stated that:
The Fed seems focused on two variables that, in our view, are lagging indicators––downstream inflation and employment––both of which have been sending conflicting signals and should be calling into question the Fed’s unanimous call for higher interest rates. During September and early October, the Fed felt vindicated in its tough stance by reports that inflation as measured by both the CPI and PCE Deflator excluding food and energy increased 0.6% (7~-8% annualized) and that the PPI excluding food and energy increased 0.4% (~5% annualized). Including food and energy, the CPI increased and the PPI fell 0.1% (~1% annualized), however, while home prices as measured by the Federal Housing Finance Agency (FHFA) fell 0.6% (~7-8% annualized). Reported on the employment front during September and early October, initial claims for unemployment insurance declined and nonfarm payroll employment increased 263,000, but job openings as measured by JOLTS fell 10% or 1.1 million, manufacturing employment as measured by the ISM Purchasing Managers Index contracted, and Challenger involuntary job separations soared 67.6% on a year-over-year basis.
As for Mr. Levine, the executive is a graduate of Stanford University and he has decades of experience in the financial world, after having worked at firms such as Corvex Management, CSFB, and Apollo Management. His fund focuses on equities and debt of firms in North America and focuses on a research intensive approach that seeks to determine whether the securities’ market pricing is in line with their true value.
Today’s piece will focus on the hedge fund’s top ten stocks, with some renowned names in the list being Apollo Global Management, Inc. (NYSE:APO), Elanco Animal Health Incorporated (NYSE:ELAN), and Builders FirstSource, Inc. (NYSE:BLDR).
Our Methodology
We studied Dendur Capital’s filings with the Securities and Exchange Commission for this year’s second quarter to determine its top stock picks.
Top 10 Stock Picks of Malcolm Levine’s Dendur Capital
10. Party City Holdco Inc. (NYSE:PRTY)
Dendur Capital’s Stake Value: $2 million
Percentage of Dendur Capital’s 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 15
Party City Holdco Inc. (NYSE:PRTY) is a party goods manufacturer and seller that is headquartered in Elmsford, New York, the United States. It sells a host of products such as balloons, gifts, accessories, and stationary products through its retail stores, grocery retailers, and online.
Mr. Levine’s Dendur Capital owned 1.5 million Party City Holdco Inc. (NYSE:PRTY) shares as part of its investment portfolio for this year’s second quarter. This allowed it to own a $2 million stake in the company. Insider Monkey’s Q2 2022 survey of 895 hedge funds revealed that 15 had also bought Party City Holdco Inc. (NYSE:PRTY)’s shares.
Party City Holdco Inc. (NYSE:PRTY) is a niche company that offers a one stop solution for events involving children. This makes it an attractive offering for shoppers looking to avoid the hassle of ordering different things from different retailers on platforms such as Amazon. The firm’s revenue is dependent on the Halloween season, and with trick or treating around the corner, the stock might end up doing well depending on consumer sentiment.
Party City Holdco Inc. (NYSE:PRTY)’s largest investor in our database is Clifford A. Sosin’s CAS Investment Partners which owns 19 million shares that are worth $25 million.
Party City Holdco Inc. (NYSE:PRTY) joins Elanco Animal Health Incorporated (NYSE:ELAN), Apollo Global Management, Inc. (NYSE:APO), and Builders FirstSource, Inc. (NYSE:BLDR) in the list of Dendur Capital’s top stock picks for this year’s second quarter.
9. Global Business Travel Group, Inc. (NYSE:GBTG)
Dendur Capital’s Stake Value: $7 million
Percentage of Dendur Capital’s 13F Portfolio: 1.49%
Number of Hedge Fund Holders: 26
Global Business Travel Group, Inc. (NYSE:GBTG) is a business to business travel platform provider that is headquartered in New York, New York, the United States. The firm’s platform allows its business clients to perform services such as managing their travel expenses, meetings, and other events.
Global Business Travel Group, Inc. (NYSE:GBTG) has a strong client base under its belt. Its total number of clients sat at 19,000 by the end of April 2022, and out of these, the top 100 had been with the firm for more than 16 years. Additionally, the bulk of its client relationships, or 81%, had been with the firm for more than five years. Deutsche Bank set a $7.10 share price target for the firm in October 2022, stating that Global Business Travel Group, Inc. (NYSE:GBTG) is a market leader in a trillion dollar industry.
As this year’s second quarter ended, Dendur Capital had owned 1.1 million Global Business Travel Group, Inc. (NYSE:GBTG) shares which allowed it to own a $7 million stake in the company that represented 1.49% of its investment portfolio. During the same time period, 26 out of the 895 hedge funds polled by Insider Monkey had held a stake in the company.
Out of these, Jay Petschek and Steven Major’s Corsair Capital Management is Global Business Travel Group, Inc. (NYSE:GBTG)’s largest investor. It owns 117,664 shares that are worth $1.1 million.
8. Lennar Corporation (NYSE:LEN)
Dendur Capital’s Stake Value: $26.9 million
Percentage of Dendur Capital’s 13F Portfolio: 5.62%
Number of Hedge Fund Holders: 47
Lennar Corporation (NYSE:LEN) is an American home building company that builds a host of different homes such as multifamily rental properties, single family attached, and single family detached homes. The firm is headquartered in Miami, Florida, the United States.
Dendur Capital’s June quarter of 2022 investment portfolio held 382,500 Lennar Corporation (NYSE:LEN) shares which were worth $26.9 million and constituted 5.62% of the portfolio. Insider Monkey’s Q2 2022 survey of 895 hedge funds revealed that 47 had also held a stake in the company.
Even with record interest rates pinching consumers’ pockets when it comes to paying mortgages, Lennar Corporation (NYSE:LEN) might end up benefiting from an upstream deflation that has seen lumber prices drop 34% year to date, as it finds cheap materials to build its houses. The firm’s forward price to earnings ratio of 4.52x is a whopping 64% lower than the sector average, indicating that there is at least some overlooked juice in the stock.
Lennar Corporation (NYSE:LEN)’s largest investor is Edgar Wachenheim’s Greenhaven Associates which owns 9.3 million shares that are worth $694 million.
7. Caesars Entertainment, Inc. (NASDAQ:CZR)
Dendur Capital’s Stake Value: $29 million
Percentage of Dendur Capital’s 13F Portfolio: 6.06%
Number of Hedge Fund Holders: 59
Caesars Entertainment Inc. (NASDAQ:CZR) is an American gaming and hospitality company that is known for its casinos and hotels. The firm has 52 properties, with close to 56,000 slot tables and 50,000 hotel rooms. It is headquartered in Reno, Nevada, the United States.
Caesars Entertainment Inc. (NASDAQ:CZR) is one of the largest gaming companies in Nevada, and with a recent merger, the firm’s revenues stand at a whopping $10 billion. The firm has close to $1 billion in cash and $17 billion in property, for a strong asset base, but its debt of $13.7 billion is a worrying fact that casts into doubt its ability to bear a recession.
Dendur Capital owned a $29 million stake in Caesars Entertainment Inc. (NASDAQ:CZR) that came through 759,077 shares as part of its Q2 2022 investment portfolio. During the same time period, 59 out of the 895 hedge funds polled by Insider Monkey had also invested in Caesars Entertainment Inc. (NASDAQ:CZR).
Parag Vora’s HG Vora Capital Management is Caesars Entertainment Inc. (NASDAQ:CZR)’s largest investor. It owns five million shares that are worth $191 million.
6. Criteo S.A. (NASDAQ:CRTO)
Dendur Capital’s Stake Value: $34 million
Percentage of Dendur Capital’s 13F Portfolio: 7.12%
Number of Hedge Fund Holders: 14
Criteo S.A. (NASDAQ:CRTO) is an Internet marketing and monetization service that is headquartered in France. The firm offers its services all over the globe in regions such as Africa, the Middle East, and North and South America.
Mr. Levine’s hedge fund owned 1.4 million Criteo S.A. (NASDAQ:CRTO) shares during this year’s second quarter that let it own a $34 million stake in the company. Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that 14 had held a stake in the company.
Criteo S.A. (NASDAQ:CRTO) has grown its revenues by a strong compounded annual growth rate (CAGR) of 23.65% since 2012, making it rank among the top 5% of the firms in the world that have managed to do so. During the same time period, it has grown its net income by a whopping 64%. Morgan Stanley raised the company’s share price target to $35 from $32 in October 2022, stating that the digital advertising market is still on track for 11% growth this year.
Criteo S.A. (NASDAQ:CRTO)’s largest investor in our database of 895 hedge funds is Ahmet Okumus’s RPD Fund Management which owns 2.2 million shares that are worth $55 million.
Along with Apollo Global Management, Inc. (NYSE:APO), Elanco Animal Health Incorporated (NYSE:ELAN), and Builders FirstSource, Inc. (NYSE:BLDR), Criteo S.A. (NASDAQ:CRTO) was a top Malcolm Levine stock pick for this year’s second quarter.
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Disclosure: None. Top 10 Stock Picks of Malcolm Levine’s Dendur Capital is originally published on Insider Monkey.