In this article, we discuss Joseph Samuels’ Islet Management’s top 10 stock picks at the end of the second quarter of 2021 and assess their performance over the past 12 months. If you wish to skip our detailed analysis of the hedge fund, its investment philosophy and its performance, go directly to Was Joseph Samuels’ Island Management Right About These 5 Actions?
We prepared the actual content for this article in November last year, when we analyzed Joseph Samuels’ Q2 Islet Management portfolio to discuss some of the notable stocks in the hedge fund portfolio at that time. We’re publishing this article today because it’s always interesting for readers to analyze how good the so-called “smart money” is when it comes to stock picking. When we look back at hedge fund stock picks/sells, we can better analyze their performance and see if they were right or wrong.
In this article, you’ll see Joseph Samuels’ Islet Management’s notable stock picks in the second quarter of last year.
To assess the performance of these stocks, we have mentioned their performance over the last 12 months up to November 27, 2022.
At the time of this writing, we had mentioned the analyst ratings for these stocks from famous Wall Street analysts. It would be interesting for our readers to see how good or bad these analysts’ price targets and calls were.
However, we must keep the stock market crash of 2022 in mind while reading this article. You will notice that most of the stocks on this list have lost value over the past 12 months. That doesn’t mean the hedge fund was entirely wrong, however. The fund believes in holding stocks for longer periods. These holdings could 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.
It’s also important to note that the hedge fund sold or reduced its holdings in some of these stocks in subsequent quarters of 2021 and 2022.
Now, let’s start the article by first reading the hedge fund primer we wrote in November 2021.
Islet Management is a New York-based hedge fund that was founded by Mr. Joseph Samuels after leaving his position as Head of US Equities and Executive Managing Director at Och-Ziff Capital Management Group in July 2016. He worked at Och -Ziff Capital for 13 years. Prior to joining Och-Ziff, Mr. Samuels worked at Pequot Capital Management and Merrill Lynch.
Mr. Samuels’ hedge fund employs a tactical equity long/short strategy focused on identifying and exploiting three key opportunities, namely dislocations, transformative corporate events and capital markets opportunities. .
Market disruptions occur under stressful conditions that lead to mispricing of assets at a general level. This theme came into play during the COVID-19 pandemic as various sectors shut down, causing the stock prices of many leading companies to plummet, despite companies with strong fundamentals.
The theme of a transformative trading event is very self-explanatory and the hedge fund focuses on capitalizing on such events for a company by going long/short. According to the Insider Monkey database, the value of Joseph Samuel’s Islet Management portfolio was approximately $3.63 billion at the end of the second quarter of 2021.
10. Coca-Cola Europapacific Partners Plc (NASDAQ: CCEP)
Value of Islet Management’s stake: $32,626,000
Stock market performance over the last 12 months until November 27: +1.7%
Coca-Cola Europacific Partners Plc (NASDAQ: CCEP) is the bottler of The Coca-Cola Company (NYSE: KO) in the Western Europe and Asia-Pacific region and serves two million customers in 26 countries. This new entity came into existence after the Australian Coca-Cola bottler known as Amatil was acquired by Coca-Cola European Partners for $9.8 billion in April 2021.
Coca-Cola Europacific Partners Plc (NASDAQ:CCEP) is on the road to recovery following the impact of the pandemic on its business. However, the company now faces new challenges in the form of supply chain disruptions and rising commodity prices globally. Coca-Cola Europacific Partners Plc (NASDAQ: CCEP) has pricing, productivity and cost levers to counter these disruptions.
On Nov. 10, Deutsche Bank’s Mitch Collett raised the target price of Coca-Cola Europacific Partners Plc (NASDAQ:CCEP) from $71 to $73, while maintaining a buy rating.
9. Fair Isaac Corporation (NYSE: FICO)
Value of Islet Management’s stake: $32,674,000
Stock performance over the last 12 months to November 27: +67
Fair Isaac Corporation (NYSE: FICO) is a San Jose, California-based data analytics company focused on credit scoring services. The FICO consumer credit score is a widely accepted measure for determining consumer credit risk by lenders in the United States. Fair Isaac Corporation (NYSE: FICO) has business interests in more than 90 countries.
In the second quarter, Islet Management owned 65,000 shares of Fair Isaac Corporation (NYSE: FICO), worth $32.6 million. Of the 873 elite funds tracked by Insider Monkey, 28 hedge funds held a stake in Fair Isaac Corporation (NYSE:FICO) at the end of the second quarter, up from 27 in the prior quarter.
On Nov. 8, Jefferies’ Surinder Thind upgraded Fair Issac Corporation (NYSE:FICO) from a Neutral rating to a Buy rating and revised the price target from $518 to $522.
Carillon Tower Advisers mentioned Fair Isaac Corporation (NYSE:FICO) in its Q3 2021 letter to investors. Here’s what the fund had to say:
“Fair Isaac Corporation (FICO) provides predictive analytics and data management products and services that enable companies to automate, improve and connect decisions. The stock underperformed during the quarter despite strong earnings Recent pressure on the company’s stock stems from investor concerns that FICO could see a dramatic slowdown in its mortgage business due to competitor intrusion as well as the possibility of a new rising interest rates At the moment, we feel that these concerns are overblown and continue to hold the stock.
8. Lightspeed Commerce Inc. (NYSE: LSPD)
Value of Islet Management’s stake: $34,748,000
Stock performance over the last 12 months until November 27: -70%
Lightspeed Commerce Inc. (NYSE: LSPD) is a provider of point-of-sale (POS) and e-commerce software solutions for retailers, hospitality and golf merchants worldwide. The Quebec, Ontario-based company’s stock price fell on Nov. 4 after the company reported losses of $11.1 million in the second quarter of 2021 from $4.6 million in the second quarter. the same period last year.
On Nov. 5, Barclays’ Raimo Lenschow cut Lightspeed Commerce Inc.’s (NYSE: LSPD) target price from $137 to $123, but retained an overweight rating on the stock.
7. American International Group, Inc. (NYSE: AIG)
Value of Islet Management’s stake: $35,700,000
Stock market performance over the last 12 months until November 27: +11%
American International Group, Inc. (NYSE: AIG) is a widely recognized insurance company with a presence in more than 80 countries. The New York-based company has general insurance, life and retirement, and investment business units under its wing.
On November 8, RBC Capital’s Mark Dwelle raised the target price from $65 to $73 and maintained an outperform rating for American International Group, Inc. (NYSE: AIG) stock. The analyst noted that the company showed improvement in core loss ratio, expense ratio and manageable catastrophe losses.
6. Invitation Homes Inc. (NYSE: INVH)
Value of Islet Management’s stake: $37,101,000
Stock performance over the last 12 months to November 27: -23%
Invitation Homes Inc. (NYSE: INVH) is a Dallas, Texas-based residential home rental company with a pool of 80,000 homes. The company also provides its tenants with smart home maintenance application solutions. The app provides control of the thermostat, locks and unlocks the doors and other services for a fixed monthly subscription fee.
On November 2, Aaron Hecht of JMP Securities raised the price target of Invitation Homes, Inc. (NYSE: INVH) from $45 to $50 and maintained an outperform rating for the stock.
Baron Funds discussed its position on Invitation Homes Inc. (NYSE:INVH) in its Q1 2021 letter to investors. Here’s what the fund had to say:
“The Fund also has investments in REITs that would benefit from this movement out of urban areas into suburban areas. We expect REIT Invitation Homes, Inc. single-family rental to benefit as more people opt to rent single-family homes over apartment rentals.
Click to continue reading and see Was Joseph Samuels’ Block Management Right About These 5 Actions?
Suggested items:
Disclosure: none. Was Joseph Samuels’ Island Management Right About These 10 Actions? is originally published on Insider Monkey.