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Was Peter Avellone’s Cartenna Capital Right About These 10 Stocks?

In this article, we discuss the 10 stocks Peter Avellone’s Cartenna Capital had bought in the third quarter of last year and evaluate their performance over the past 12 months. You can skip this part and go directly to Was Peter Avellone’s Cartenna Capital Right About These 5 Stocks?

We prepared the actual contents of this article in January 2022, when we analyzed the Q3 portfolio of Peter Avellone’s Cartenna Capital to discuss the top 10 new stock 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 stocks Peter Avellone’s Cartenna Capital initiated new stakes in during the third quarter of 2021.

To assess the performance of these stocks and the hedge fund, we have mentioned their performance over the past 12 months.

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.

But first, let’s read our brief introduction to Peter Avellone and his hedge fund.

Peter Avellone founded Cartenna Capital in 2020, which is a New York-based hedge fund.

Cartenna Capital invests primarily in the transports, materials, information technology, industrials, finance, consumer discretionary, and consumer staples sectors, with a top ten holdings concentration of 55.93%. 

Avellone is a graduate from College of the Holy Cross, and joined Lehman Brothers’ investment banking division in 2005. He started as a research analyst at the global alternative investment manager, Angelo Gordon, in 2007. 

Peter Avellone joined Steve Cohen’s Point72 Asset Management in 2008 as a research analyst, and was promoted to portfolio manager in 2013. Over the course of his career, Avellone also served as the portfolio manager at Citadel LLC and Continuum Asset Management, before starting his own hedge fund in 2020. 

The most notable stocks from Peter Avellone’s Q3 portfolio include Booking Holdings Inc. (NASDAQ:BKNG), Autodesk, Inc. (NASDAQ:ADSK), and Coursera, Inc. (NYSE:COUR). 

10 New Stock Picks of Peter Avellone's Cartenna Capital

10 New Stock Picks of Peter Avellone’s Cartenna Capital

Source:Pixabay

10. Booking Holdings Inc. (NASDAQ:BKNG)

Cartenna Capital’s Stake Value: $9,021,000

Stock performance over the past 12 months as of November 24: -15%

Booking Holdings Inc. (NASDAQ:BKNG) is a Connecticut-based travel technology company, known for its travel fare aggregators and travel metasearch engines, which are operational in 200 countries. Cartenna Capital acquired a stake in Booking Holdings Inc. (NASDAQ:BKNG) during the third quarter, purchasing 3,800 shares of the company, worth over $9 million, representing 3.33% of the fund’s total investments for the period. 

RBC Capital analyst Brad Erickson upgraded Booking Holdings Inc. (NASDAQ:BKNG) to Outperform from Sector Perform with an unchanged $2,700 price target, citing the company’s structurally higher profitability as compared to pre-pandemic levels. 

Harris Associates, the largest Booking Holdings Inc. (NASDAQ:BKNG) stakeholder as of Q3 2021, holds a $1.5 billion position in the company. Overall, 96 hedge funds were bullish on the stock at the end of September. 

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.”

9. WESCO International, Inc. (NYSE:WCC)

Cartenna Capital’s Stake Value: $9,053,000

Stock performance over the past 12 months as of November 24: -6.8%

WESCO International, Inc. (NYSE:WCC), a Pennsylvania-based multinational electrical distribution and services company, is one of the newest stock picks of Cartenna Capital during the third quarter. The hedge fund bought 78,500 shares of ​​WESCO International, Inc. (NYSE:WCC), worth $9.05 million, representing 3.34% of the Q3 13F portfolio. 

Baird analyst David Manthey on October 15 raised the price target on WESCO International, Inc. (NYSE:WCC) to $140 from $124 and kept a Neutral rating on the shares. The analyst elevated the stock to a bullish Fresh Pick, citing upside to sales and gross margins, aided by strong pricing. 

Here is what Diamond Hill Capital has to say about WESCO International, Inc. (NYSE:WCC) in its Q2 2021 investor letter:

“WESCO, a leading distributor of electrical, industrial and communications materials, was a top contributor as it continues making progress on its integration of Anixter—an acquisition that closed in early 2020—and is strategically paying down merger related debt. With increased scale and added synergy from its acquisition, we believe WESCO is well positioned as it generates strong free cash flow.”

8. Saia, Inc. (NASDAQ:SAIA)

Cartenna Capital’s Stake Value: $10,711,000

Stock performance over the past 12 months as of November 24: -31%

In the third quarter of 2021, Peter Avellone’s Cartenna Capital acquired 45,000 shares of Saia, Inc. (NASDAQ:SAIA), worth $10.71 million, accounting for 3.96% of the fund’s total 13F securities. Saia, Inc. (NASDAQ:SAIA) is a less-than-truckload trucking company headquartered in Louisiana. In November, LTL shipments per workday increased 3.70% year-over-year. 

Stephens analyst Jack Atkins on January 4 raised the price target on Saia, Inc. (NASDAQ:SAIA) to $390 from $380 and kept an Overweight rating on the shares, noting that less-than-truckload carriers saw continued demand and pricing strength in Q4, as “was the case for much of 2021”. He expects “more of the same” for the LTL sector in 2022. 

Robert Joseph Caruso’s Select Equity Group is the leading Saia, Inc. (NASDAQ:SAIA) stakeholder from Q3, with a $305.6 million position in the company. Overall, 27 hedge funds reported owning stakes worth $539.4 million in Saia, Inc. (NASDAQ:SAIA). 

7. Fortive Corporation (NYSE:FTV)

Cartenna Capital’s Stake Value: $10,938,000

Stock performance over the past 12 months as of November 24: -13%

Fortive Corporation (NYSE:FTV) is a new arrival in Cartenna Capital’s third quarter portfolio, with the hedge fund buying 155,000 shares of the company, worth $10.9 million, representing 4.04% of the total 13F investments. Fortive Corporation (NYSE:FTV) is an industrial technology conglomerate based in Washington, offering field instrumentation and technologies to assist with industrial process innovation worldwide. 

On November 4, Fortive Corporation (NYSE:FTV) declared a quarterly per share dividend of $0.07, which was paid on December 30 to shareholders of record on November 26. 

On January 4, Barclays analyst Julian Mitchell raised the price target on Fortive Corporation (NYSE:FTV) to $76 from $75 and kept an Equal Weight rating on the shares. The analyst expects inflation to boost sales for multi-industry companies in Q4, but he sees margin pressure in the near term.

Viking Global, a $36 billion hedge fund managed by billionaire Andreas Halvorsen, is the biggest Fortive Corporation (NYSE:FTV) stakeholder as of September 2021, with 10.8 million shares worth $762.7 million. Overall, 32 hedge funds in the Q3 database of Insider Monkey were bullish on the stock. 

Argosy Investors mentioned Fortive Corporation (NYSE:FTV) in its Q4 2020 investor letter. Here is what they had to say: 

“We’re getting long in the tooth here, so we’ll conclude with an update Fortive (FTV). Fortive completed its spinoff of Vontier, a business that manufactures gas station terminals, smart city traffic lights, a telematics business, and an auto repair tools distribution business, led by CEO Mark Morelli, a well regarded external hire from Columbus McKinnon. My outlook is bright for both Fortive and Vontier, though Vontier is more heavily focused in the automotive sector and faces some multi-year headwinds from any transition to electric vehicles. Vontier is also nearing the end of a large installation cycle in its Gilbarco-Veeder-Root business which makes today’s earnings somewhat higher than they will be a couple years from now. If there is one fact I am confident about, both Fortive and Vontier will look very different three years from now due to their highly effective acquisition and integration processes that leverages Lean (a concept discussed in prior letters).”

6. Carlisle Companies Incorporated (NYSE:CSL)

Cartenna Capital’s Stake Value: $11,073,000

Stock performance over the past 12 months as of November 24: +7.5%

Peter Avellone’s Cartenna Capital added Carlisle Companies Incorporated (NYSE:CSL) to its portfolio in the third quarter, buying 55,700 shares of the company, worth over $11 million. Carlisle Companies Incorporated (NYSE:CSL) is a Phoenix-based manufacturing and design company that caters to several niche markets including commercial roofing, energy, agriculture, mining, aerospace, electronics, food delivery, and healthcare.

Oppenheimer analyst Bryan Blair raised the price target on Carlisle Companies Incorporated (NYSE:CSL) on December 8 to $270 from $255 and kept an Outperform rating on the shares. The analyst came away “incrementally positive” on the newly formed $700 million Carlisle Weatherproofing Technologies platform. 

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Disclosure: None. Was Peter Avellone’s Cartenna Capital Right About These 10 Stocks? is originally published on Insider Monkey.

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