In this article, we discuss the top 10 tech stock picks of Rajiv Jain’s GQG Partners 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 Jain’s history, investment philosophy, and hedge fund performance, go directly to the Was Rajiv Jain’s GQG Partners Right About These 5 Tech Stocks?.
We prepared the actual contents of this article in January 2022, when we analyzed the Q3 2021 portfolio of Rajiv Jain’s GQG Partners to discuss the top 10 tech 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 tech stock picks of Rajiv Jain’s GQG Partners as of the third quarter of last year.
To assess the performance of these tech stocks and the hedge fund, we have mentioned their performance over the past 12 months.
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 GQG was entirely wrong. It’s a major hedge fund that believes in holding stocks for longer periods of time. These tech 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.
Before seeing the tech stock picks of GQG, let’s see our primer on the hedge fund and its manager we wrote back in January.
GQG Partners was founded by Rajiv Jain in 2016, who is the chairman, portfolio manager, and chief investment officer of the hedge fund. GQG Partners is headquartered in Fort Lauderdale, and has offices in Seattle, New York City, London, and Sydney. The 13F portfolio at Jain’s fund is worth $36.5 billion, as per the third quarter filings.
Jain’s GQG Partners focuses primarily on the information technology, healthcare, finance, energy, communications, and consumer discretionary sectors. The hedge fund invests in separately managed accounts, private funds, US mutual funds, UCITS funds, Australian funds, and CITs. Jain’s investment strategies revolve around global equity, dividend investing, international equity, emerging markets, and US securities.
Rajiv Jain’s GQG Partners purchased 15 new stocks in the third quarter, bought additional stakes in 38 securities, sold out of 11 equities, and reduced holdings in 26 companies. The fund’s top buys for Q3 included Visa Inc. (NYSE:V), salesforce.com, inc. (NYSE:CRM), and Exxon Mobil Corporation (NYSE:XOM). Whereas, GQG Partners reduced holdings in Alibaba Group Holding Limited (NYSE:BABA), Humana Inc. (NYSE:HUM), and Bank of America Corporation (NYSE:BAC).
The most notable stocks in the Q3 portfolio of Rajiv Jain include Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG).
10. ZoomInfo Technologies Inc. (NASDAQ:ZI)
GQG Partners’ Stake Value: $323,777,000
Performance of the stock over the past 12 months: -60%
ZoomInfo Technologies Inc. (NASDAQ:ZI) is a subscription-based SaaS company headquartered in Vancouver, Washington. ZoomInfo Technologies Inc. (NASDAQ:ZI) offers an intelligence and information platform that enables sales, marketing, and HR professionals to access relevant business data. The company closed the third quarter with over 25,000 customers, and more than 1,250 clients have an annual contract value of $100,000 and above.
Credit Suisse analyst Phil Winslow initiated coverage of ZoomInfo Technologies Inc. (NASDAQ:ZI) on November 16 with an Outperform rating and a $100 price target. The analyst views ZoomInfo Technologies Inc. (NASDAQ:ZI) as the “clear leader” in go-to-market intelligence solutions and believes a premium valuation is warranted compared to current levels. The company’s superior contact data is a key competitive advantage that will persist.
Here is what Baron Funds has to say about ZoomInfo Technologies Inc. (NASDAQ:ZI) in its Q3 2021 investor letter:
“Favorable stock selection in Communication Services came from ZoomInfo Technologies Inc., a leading go-to-market intelligence platform for sales and marketing teams. We believe that the company’s recent acquisition of Chorus.ai, a conversation intelligence business, dramatically increased the data visibility and benefits that ZoomInfo can offer its clients. In addition, its organic revenues reaccelerated for a fifth consecutive quarter and management significantly raised its earnings guidance.”
9. salesforce.com, inc. (NYSE:CRM)
GQG Partners’ Stake Value: $586,785,000
Performance of the stock over the past 12 months: -47%
Rajiv Jain acquired a stake in salesforce.com, inc. (NYSE:CRM) during the third quarter of 2021, buying 2.16 million shares of the company, worth $586.7 million, representing 1.60% of his fund’s Q3 portfolio. salesforce.com, inc. (NYSE:CRM) is a cloud-based software company that provides customer relationship management software, and applications to assist with marketing automation and data analytics.
UBS analyst Karl Keirstead downgraded salesforce.com, inc. (NYSE:CRM) on January 4 to Neutral from Buy with a price target of $265, down from $315, citing cost pressures which are likely to impact company growth in 2022.
Here is what Vulcan Value Partners has to say about salesforce.com, inc. (NYSE:CRM) in its Q3 2021 investor letter:
“Salesforce.com Inc., a material contributor for the quarter, is the dominant provider of customer relationship management (CRM) software and technology. Salesforce has high retention rates, pricing power, a large and growing addressable market, high free cash flow, and a competitive moat. The company continues to execute well, and we believe the global pandemic has only improved its prospects and future returns.”
8. Accenture plc (NYSE:ACN)
GQG Partners’ Stake Value: $631,768,000
Performance of the stock over the past 12 months: -18%
Accenture plc (NYSE:ACN), an Irish company offering IT and consultancy services, is one of the top tech stocks from GQG Partners’ Q3 portfolio, with the hedge fund increasing its stake in Accenture plc (NYSE:ACN) by 7% in the third quarter. Jain’s fund owns 1.97 million shares of Accenture plc (NYSE:ACN), worth $631.7 million, accounting for 1.72% of the total Q3 investments.
Barclays analyst Ramsey El-Assal on December 20 raised the price target on Accenture plc (NYSE:ACN) to $455 from $384 and kept an Overweight rating on the shares following the Q4 earnings report.
In the third quarter of 2021, 56 hedge funds were bullish on Accenture plc (NYSE:ACN), up from 52 funds in the previous quarter. Nicolai Tangen’s Ako Capital is the largest stakeholder of the company, with a $718.7 million position.
Here is what Polen Global Growth has to say about Accenture plc (NYSE:ACN) in its Q3 2021 investor letter:
“Accenture continues to perform well as the business has grown through the pandemic. Accenture has benefited as businesses around the world have sought a trusted partner to enable their digital transformation. Those leading in the new world are accelerating investment, while those lagging are investing to close the gap. These are two great examples of the pandemic accelerating trends that were already in motion, making leaders more resilient.”
7. Adobe Inc. (NASDAQ:ADBE)
GQG Partners’ Stake Value: $709,391,000
Performance of the stock over the past 12 months: -49%
Adobe Inc. (NASDAQ: ADBE) is a California-based multinational computer software company, best known for its applications such as Adobe Photoshop, Adobe Illustrator, Adobe Acrobat Reader, Adobe Creative Suite, Adobe Creative Cloud, and Dreamweaver, among others. Rajiv Jain owns a $709.3 million position in Adobe Inc. (NASDAQ:ADBE) as of September 2021, which accounts for 1.94% of its total Q3 investments.
UBS analyst Karl Keirstead downgraded Adobe Inc. (NASDAQ:ADBE) to Neutral from Buy with a price target of $575, down from $635, on concerns that tech spending was pulled forward in 2020 and 2021 and that this phenomenon will pressure Adobe Inc. (NASDAQ:ADBE)’s growth rate in 2022.
Here is what Richie Capital Group has to say about Adobe Inc. (NASDAQ:ADBE) in its Q2 2021 investor letter:
“Adobe Systems (ADBE – up 24.8%) – In the last 15 years, Adobe has transformed itself into a software behemoth, more than tripling its revenue since 2010. The company is famous for its namesake PDF-reader and photo-editing software Photoshop . However, ADBE sells a full suite of software products through a recurring subscription model. The company transitioned from selling boxed software to recurring subscriptions in 2013 and revenues have grown consistently since. The company achieved $13B in revenue in 2020 with 88% Gross Margins.”
6. Amazon.com, Inc. (NASDAQ:AMZN)
GQG Partners’ Stake Value: $882,550,000
Performance of the stock over the past 12 months: -47%
Jeff Bezos’ Amazon.com, Inc. (NASDAQ:AMZN) announced on January 5 that its voice assistant, Alexa, is heading to space. NASA’s next-generation rocket will be equipped with Amazon.com, Inc. (NASDAQ:AMZN)’s Alexa and Cisco Systems, Inc. (NASDAQ:CSCO)’s Webex communications platform. Alexa would offer information and companionship to astronauts, and the Webex platform would allow video conferencing from space to Earth.
Jain’s GQG Partners owns 268,698 Amazon.com, Inc. (NASDAQ:AMZN) shares, worth $882.5 million, representing 2.41% of the fund’s Q3 investments.
Monness Crespi analyst Brian White on December 27 noted that Amazon.com, Inc. (NASDAQ:AMZN) shares have trailed this year’s “healthy market rally” after a strong stock performance in 2020.
Here is what Davis Opportunity Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter:
“E-commerce, online search and advertising, social media and software are another component of the portfolio that have proven, attractive businesses. The online portion of the Fund is currently dominated by such market leaders as Amazon.com. We are attracted to these names based on the size and rapid expansion of their market opportunities globally, their ability to generate and grow new revenue sources through constant innovation, ample operating leverage as they continue to scale and capable, focused, highly competitive leadership teams. If purchased at sensible prices, these types of businesses in our experience can contribute meaningfully to long-term results.”
Click to continue reading and see Was Rajiv Jain’s GQG Partners Right About These 5 Tech Stocks?
Disclosure: None. Was Rajiv Jain’s GQG Partners Right About These 10 Tech Stocks? is originally published on Insider Monkey.