Credit Suisse has raised its price target on several high-profile internet stocks favored by hedge funds: Google (now trading as Alphabet), Facebook and Amazon.com. The bank continues to classify them as its top large-cap picks. “Although we concede that all three stocks are now consensus longs, we continue to discriminate in favor of quality versus sentiment as a reason to invest,” it explains in a new report.
It raised its target on the GOOGL share class to $815 from $750 for several reasons: paid click volume growth remains strong, driven by mobile; budgets for YouTube are growing; and capital expenditure increases are moderating. Its largest hedge fund shareholder is Greenwich, Connecticut-based Viking Global Investors; GOOGL is the Tiger Cub’s third-largest holding at the end of the second quarter.
Credit Suisse raised Facebook’s price target to $115 from $110, noting, in part, that Wall Street models for the company “are too conservative and underestimate the long-term monetization potential of upcoming new products.” Two Tiger Cubs with significant stakes include Greenwich, Connecticut-based Lone Pine Capital and New York-based Coatue Management.
Finally, the bank raised its target on Amazon.com to $720 from $700. It cites what it calls an “open ended opportunity for AWS,” or Amazon Web Services, its cloud computing services business. Viking also has a significant position in this stock.
Credit Suisse also tells clients it favors LinkedIn; MercadoLibre, which offers e-commerce platforms in Latin America; and Yelp.
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Sandell Asset Management fired off a press release to respond to Ethan Allen Interiors’s October 1 announcement that two long-tenured directors were planning to retire, calling it “a self-serving and transparent attempt to address but one of the numerous governance failings.” Sandell, a New York-based activist firm that owns 5.5 percent of the furniture retailer, said the step was taken only after the hedge fund firm nominated its own slate of director candidates and condemned “the company’s stale and entrenched board and other poor governance practices.”
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Tiger Global Management has invested an undisclosed amount in Cube26, an Indian information technology company. The company, formerly called PredictGaze, plans to use the money to develop new technologies and double its employees to 120 people over the next few months, according to several published reports.
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The average hedge fund lost 1.20 percent in September and 2.35 percent for the year to date, according to eVestment. Earlier in the week, HFR reported that its Weighted Composite Index lost 1.1 percent in September and 1.3 percent for the year. Both data trackers agree that September was the fourth consecutive monthly loss for hedge funds, on average. However, the average hedge fund is still outperforming both the Standard & Poor’s 500 index and the Dow industrials over the first nine months.
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Shares of Yum Brands rebounded on Friday, gaining 4.16 percent to close at $70.26. However, the stock is still down more than 15 percent over the past three sessions since the fast-food giant reported disappointing earnings and problems in China.
