In this article, we discuss the top 10 stock picks of Alexander West’s Blue Pool Capital as of the end of the third quarter of 2021 and assess their performance over the past 12 months. If you want to skip our detailed analysis of West’s history, investment philosophy, and hedge fund performance, go directly to Was Alexander West’s Blue Pool Capital Right About These 5 Stocks?
We prepared the actual contents of this article in January this year, when we analyzed the Q3 portfolio of Alexander West’s Blue Pool Capital to discuss the top 10 picks of the hedge fund at that time. We are publishing this article today because it’s always interesting for the readers to analyze how good the so-called “smart money” is when it comes to stock picking. When we look at the stock picks/sells of hedge funds in hindsight, we can better analyze their performance and see whether they were right or wrong.
In this article you will see the top 10 stock picks of Alexander West’s Blue Pool Capital as of the third quarter of last year.
To assess the performance of these stocks and the hedge fund, we have mentioned their performance over the past 12 months through November 25.
At the time of writing we had mentioned analyst ratings for these stocks from famous Wall Street analysts. It’d be interesting for our readers to see how right or wrong were these analysts’ price targets and calls.
However, we should keep the 2022 market crash in mind when reading this article. You will notice that most of the stocks in this list lost value over the past 12 months. That doesn’t, however, mean that the hedge fund was entirely wrong. The fund believes in holding stocks for longer periods of time. These holdings might end up creating profits for the hedge fund in the months and years to come as analysts believe the market could rebound strongly in 2023 and beyond.
Alexander West is the founder, managing partner, and chief investment officer of Blue Pool Capital, a Hong Kong-based hedge fund with a portfolio worth $1.39 billion as of Q3 2021. Blue Pool Capital invests mainly in the healthcare, information technology, finance, consumer discretionary, and communications sectors.
Alexander West graduated from the Stockholm School of Economics in 1990. He joined Investor AB in 1995 as its president, which is a Stockholm-based investment management firm that owns high-quality global companies. He remained with Investor AB till 2000, and started Blue Pool Capital in 2004.
Source:Pixabay
10. Thermo Fisher Scientific Inc. (NYSE:TMO)
Blue Pool Capital’s Stake Value: $23,539,000
Stock performance over the past 12 months through November 25: -13%
Thermo Fisher Scientific Inc. (NYSE:TMO) is a Massachusetts-based company offering laboratory equipment, scientific instrumentation, reagents and consumables, and software solutions. Blue Pool Capital owns 41,200 shares of Thermo Fisher Scientific Inc. (NYSE:TMO), worth $23.5 million, representing 1.69% of the fund’s total Q3 investments.
Wells Fargo analyst Dan Leonard raised the price target on Thermo Fisher Scientific Inc. (NYSE:TMO) to $700 from $625 and kept an Equal Weight rating on the shares on December 14.
Among the hedge funds tracked by Insider Monkey, Generation Investment Management is one of the leading Thermo Fisher Scientific Inc. (NYSE:TMO) stakeholders from Q3 2021, with 1.68 million shares worth $962.4 million.
Here is what ClearBridge Investments has to say about Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q2 2021 investor letter:
“Two additional names in the health care sector in the quarter, partially funded with a sale, made strong contributions and helped push our relative exposure to the sector from underweight to overweight. We added Thermo Fisher Scientific to increase our exposure to health care tools, which has been an attractive and core segment within health care. Thermo Fisher’s instruments are used to monitor and protect air, water, and food quality, and the company has strong long-term fundamentals, a top-tier management team and a diversified business.”
9. Booking Holdings Inc. (NASDAQ:BKNG)
Blue Pool Capital’s Stake Value: $23,834,000
Stock performance over the past 12 months through November 25: -7.9%
Booking Holdings Inc. (NASDAQ:BKNG), a Connecticut-based travel technology company, is one of the best stocks to buy according to Alexander West’s Blue Pool Capital. Air and travel stocks bounced after the CDC reduced the COVID-19 isolation time to five days, since this allows greater flexibility in scheduling flights.
Blue Pool Capital increased its position in Booking Holdings Inc. (NASDAQ:BKNG) by 32% in the third quarter, holding 10,040 shares of the company, worth $23.8 million, representing 1.71% of the firm’s total Q3 securities.
Jefferies analyst John Colantuoni on January 7 assumed coverage of Booking Holdings Inc. (NASDAQ:BKNG) with a Buy rating and a $3,100 price target as he took over the primary coverage of the Online Travel space. The analyst sees Booking Holdings Inc. (NASDAQ:BKNG)’s exposure to nascent travel markets, allowing it seven years of over 15% EPS growth.
Here is what L1 Capital has to say about Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2021 investor letter:
“We reinvested the proceeds from our successful investment in Thermo Fisher in Booking Holdings (Booking). Booking was an investment in the Fund at Inception and was featured in our inaugural June 2019 Quarterly Report. The company owns the world’s largest online travel agent (OTA), Booking.com. To say the past 2.5 years has been volatile for Booking is a major understatement. Booking’s management has had to address the COVID-19-driven collapse in demand for travel accommodation, as well as to manage volatile demand as the world gradually recovers, interrupted by second and third waves of COVID-19 as variants arise.
Throughout these volatile market conditions, Booking’s management has executed against a consistent strategy, investing in its platform and network of accommodation providers, and expanding its associated services while improving efficiencies. We believe Booking will come out of the COVID-19 environment a stronger business, with less competition and consumers more predisposed to booking their travel accommodation online. Travel is recovering strongly as vaccination rates increase and COVID-19 related restrictions are lifted, and we expect Booking’s earnings and cash flow to also recover strongly over the coming years.”
8. NVIDIA Corporation (NASDAQ:NVDA)
Blue Pool Capital’s Stake Value: $26,814,000
Stock performance over the past 12 months through November 25: -48%
NVIDIA Corporation (NASDAQ:NVDA) is a multinational technology company based in Delaware, designing graphics processing units and chips for the gaming, mobile computing, and automotive markets. Blue Pool Capital increased its stake in NVIDIA Corporation (NASDAQ:NVDA) by 300% during the third quarter, with 129,436 shares, worth $26.8 million. The NVIDIA Corporation (NASDAQ:NVDA) stock represents 1.92% of the fund’s total Q3 investments.
Citi analyst Atif Malik opened a “Positive Catalyst Watch” on shares of NVIDIA Corporation (NASDAQ:NVDA) after the Consumer Electronics Show. Management commented on the “strong” holiday gaming season, “solid” data center demand trends, and gaming/networking foundry supply improvements in the second half of the year.
Here is what Harding Loevner Global Equity Fund has to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2021 investor letter:
“The proliferation of devices using chips, whether EVs, “things” in lol, or embedded systems more generally, results in the generation of oceans of data potentially needing to be stored, processed, and analyzed. NVIDIA, the leading chip designer well known for its graphic processing units and its complementary CUDA software ecosystem, is at the forefront of the effort to provide the analytical platform needed to unlock the full potential of such specialist processors.”
7. UnitedHealth Group Incorporated (NYSE:UNH)
Blue Pool Capital’s Stake Value: $31,702,000
Stock performance over the past 12 months through November 25: +22%
UnitedHealth Group Incorporated (NYSE:UNH) is a Minnesota-based multinational healthcare and insurance company, and it is the largest insurance company by net premiums. Blue Pool Capital owns a $31.70 million stake in UnitedHealth Group Incorporated (NYSE:UNH) as of September 2021, representing 2.28% of the fund’s Q3 securities.
Truist analyst David MacDonald on January 5 raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $575 from $520 and kept a Buy rating on the shares as part of a broader research note on Healthcare Services.
Here is what Third Point Management has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2021 investor letter:
“UnitedHealth is one of the largest healthcare companies in the world and a market leader in both its insurance and healthcare services (Optum) businesses. We initiated our position during the 2020 Presidential election at a time of heightened political and regulatory uncertainty.
We believe under its new CEO, Andrew Witty, UnitedHealth can not only preserve its market dominance and sustain industry-leading growth rates across most of its key segments but also enter new healthcare services markets. Witty is known as a mission-driven CEO who clearly articulates his view that providing high-quality, affordable health care services is a social good. He receives consistently high marks from former colleagues, and we believe that his leadership approach will ballast and even strengthen UNH’s already impressive management and employee ranks. The insurance and services businesses are synergistic and complementary, which entrenches United’s critical role in care financing, access, and management. This dynamic gives us confidence in the durability of United’s market leadership…” (Click here to see the full text)
6. Meta Platforms, Inc. (NASDAQ:FB)
Blue Pool Capital’s Stake Value: $37,736,000
Stock performance over the past 12 months through November 25: -66%
Meta Platforms, Inc. (NASDAQ:FB), the parent company of Facebook, Instagram, and WhatsApp, is one of the top stock picks of Alexander West’s Blue Pool Capital. In the third quarter of 2021, the hedge fund owned 111,187 shares of Meta Platforms, Inc. (NASDAQ:FB), worth $37.7 million. The stock accounts for 2.71% of the Q3 portfolio of Blue Pool Capital.
Loop Capital analyst Alan Gould lowered the price target on Meta Platforms, Inc. (NASDAQ:FB) to $380 from $420 but kept a Buy rating on the shares on December 20. The analyst stated investors will keenly focus on the extent of Meta Platforms, Inc. (NASDAQ:FB)’s spending on the Metaverse over the next several years and how rapidly the spending at Facebook Reality Labs will increase from the $10 billion already spent in 2021.
Here is what Canterbury Tollgate has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q3 2021 investor letter:
“To say traditional media is anti-Facebook would not be an overstatement. An already intense and multi-year critique of (or attack on) Facebook has ratcheted up in recent weeks. Facebook’s research efforts have been reported on, if often derided, for nearly a decade. Going back to 2014, Slate.com called their research practices “unethical” when FB tried to study the impact social posts had on users. Now those efforts have been turned against them for the kill shot.
My job is to observe, assess, and allocate. Not to commentate on all the whims and wishes of media narrative. However, in the case of Facebook I cannot avoid going into some detail re: the onslaught against them, which I find to be most unwarranted and insincere.
Last month the Wall Street Journal ran a five-piece series titled “The Facebook Files” which allegedly shows how toxic Instagram is for teens. The foundation of their argument was a single slide from an internal presentation claiming, based on FB’s own research, that of teens who had a negative self-image, one-third said Instagram “made them feel worse.”iii Somehow the implication here is that this is not an inescapable aspect of either the human psyche and/or society-at large, but that it is of Facebook’s doing…” (Click here to see the full text)
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Disclosure: None. Was Alexander West’s Blue Pool Capital Right About These 10 Stocks? is originally published on Insider Monkey.