August 19, 2022

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10 Tech Stocks to Buy Now According to Barry Dargan’s Intermede Investment Partners

In this article, we discuss 10 tech stocks to buy now according to Barry Dargan’s Intermede Investment Partners. If you want to skip our detailed analysis of Dargan’s history, investment philosophy, and hedge fund performance, go directly to 5 Tech Stocks to Buy Now According to Barry Dargan’s Intermede Investment Partners.

Hedge fund manager Barry Dargan is the chief executive officer and portfolio manager of the London-based investment management firm, Intermede Investment Partners. After earning his bachelor’s degree from the University of London and his FCA from ICAEW, Barry Dargan commenced his career at James Capel in 1988 and then moved on to work for S.G. Warburg & Co Ltd. He left the investment bank to serve MFS Investment Management as its managing director and portfolio manager. Later, he joined Artisan Partners as a partner, managing director, and portfolio manager. Barry Dargan founded Intermede Investment Partners in 2013. He has over 35 years of experience as an investing professional and 20 years as a worldwide equities portfolio manager.

Intermede Investment Partners specializes in global stocks and is a fundamental, bottom-up boutique fund management firm. The hedge fund strives to outperform global stock markets by investing in well-managed firms with strong market positions in appealing areas. Intermede Investment Partners is particularly interested in enterprises that have established a long-term competitive advantage. According to the fourth quarter 13F filings, Intermede Investment Partners manages more than $4.86 billion in its investment portfolio. The hedge fund’s portfolio is diversified over 6 core sectors, the largest of which is information technology.

Some of the top tech stocks present in the investment portfolio of Intermede Investment Partners at the end of the fourth quarter of 2021 include Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), among others discussed below.

In Barry Dargan’s portfolio, a notable tech company is Alphabet Inc. (NASDAQ:GOOG). On May 5, Alphabet Inc. (NASDAQ:GOOG) announced that it had bought Raxium, a California-based MicroLED technology business that will help Google with future augmented and mixed reality headsets.

10 Tech Stocks to Buy Now According to Barry Dargan’s Intermede Investment Partners

Photo by Adam Nowakowski on Unsplash

Barry Dargan is bullish on Apple Inc. (NASDAQ:AAPL), according to his hedge fund’s disclosed holdings data at the end of the fourth quarter of 2021. The fund increased its stake in Apple Inc. (NASDAQ:AAPL) by 4% in the fourth quarter, ending the period with 1.29 million shares of the company. Apple (NASDAQ:AAPL) issued a quarterly dividend of $0.23 per share on April 28, up 4.5% from the previous payout of $0.22.

Another tech stock worth investing in according to Barry Dargan’s Intermede Investment Partners is Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). On April 14, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) published earnings for the first quarter of 2022, announcing an EPS of $1.40, beating estimates by $0.09. The $17.57 billion revenue was up 36% year-over-year, exceeding estimates by $1.31 billion.

Our Methodology

We used Barry Dargan’s Intermede Investment Partners’ 13F portfolio for the fourth quarter of 2021 for this analysis, selecting the fund’s top 10 tech stocks. Insider Monkey’s database of over 900 elite hedge funds was utilised to determine the popularity of each company among smart investors.

Tech Stocks to Buy Now According to Barry Dargan’s Intermede Investment Partners

10. ANSYS, Inc. (NASDAQ:ANSS)

Intermede Investment Partners’ Stake Value: $122,510,000

Intermede Investment Partners’ 13F Portfolio: 2.52%

Number of Hedge Fund Holders: 44

ANSYS, Inc. (NASDAQ:ANSS) is a company that creates and sells engineering simulation software and services. It operates in four geographical regions – the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Among the hedge funds tracked by Insider Monkey, Ako Capital is a leading shareholder of ANSYS, Inc. (NASDAQ:ANSS), with 505,822 shares worth more than $160.67 million. Overall, 44 hedge funds had stakes in ANSYS, Inc. (NASDAQ:ANSS), valued at $1.62 billion as of the fourth quarter end of 2021.

On May 6, RBC Capital analyst Matthew Hedberg maintained a Sector Perform rating on ANSYS, Inc. (NASDAQ:ANSS) and decreased his price objective to $315 from $350 due to multiple peer reductions.

Motor Design, a UK-based producer of electric motor design software, was purchased by ANSYS, Inc. (NASDAQ:ANSS) on May 4. According to the fourth quarter 13F Filings, Intermede Investment Partners held 305,420 shares of ANSYS, Inc. (NASDAQ:ANSS), worth $122.51 million and representing 2.52% of the fund’s investment portfolio.

Just like Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), ANSYS, Inc. (NASDAQ:ANSS) is one of the tech stocks to buy now according to Barry Dargan’s Intermede Investment Partners.

In its fourth quarter 2021 investor letter, Baron Funds mentioned ANSYS, Inc. (NASDAQ:ANSS). Here is what the fund said:

“ANSYS, Inc., a leading provider of physics-based simulation software, contributed to performance after its earnings results exceeded Street estimates. ANSYS continued to grow its sales within its largest customers. In addition, the company continued to expand its product offerings and distribution network through innovation, acquisitions, and partnerships, allowing it to address faster-growing segments of its market. We believe ANSYS remains positioned to benefit from the ongoing growth in demand for simulation across both its core and emerging technology markets.”

9. Alibaba Group Holding Limited (NYSE:BABA)

Intermede Investment Partners’ Stake Value: $133,035,000

Intermede Investment Partners’ 13F Portfolio: 2.73%

Number of Hedge Fund Holders: 96

Alibaba Group Holding Limited (NYSE:BABA), based in Hangzhou, China, is an internet retailer. Alibaba.com, Tmall.com, and the Taobao marketplace all provide wholesale and retail services to millions of merchants, and the corporation also owns a cloud computing software platform. Fisher Asset Management is the leading shareholder of Alibaba Group Holding Limited (NYSE:BABA) as of Q1 2022, with 14.45 million shares worth over $1.57 billion.

Alibaba Group Holding Limited (NYSE:BABA) has attracted investments from 96 hedge funds, valued at $6.94 billion, as tracked by Insider Monkey at the end of the fourth quarter of 2021. In the fourth quarter, Intermede Investment Partners increased its stake in Alibaba Group Holding Limited (NYSE:BABA) by 53%, and its position in the company is now worth about $133.04 million.

On May 2, Mizuho analyst James Lee decreased his price objective on Alibaba Group Holding Limited (NYSE:BABA) from $180 to $160, but maintained a Buy rating on the stock. The expert anticipated that the first half of 2022 will be challenging for China’s internet due to the constant disruptions in consumer spending and business activity induced by COVID limits.

Here is what Baron Funds has to say about Alibaba Group Holding Limited (NYSE:BABA) in its first quarter 2022 investor letter:

“We have eliminated 6 holdings during the first quarter (including) Alibaba. We have sold our Alibaba Group Holding Limited position as the company continues to face competitive challenges and regulatory pressures remain, making it difficult (if not impossible) to appropriately assess the range of outcomes and associated probabilities for the future profitability of the business.”

8. Applied Materials, Inc. (NASDAQ:AMAT)

Intermede Investment Partners’ Stake Value: $142,021,000

Intermede Investment Partners’ 13F Portfolio: 2.92%

Number of Hedge Fund Holders: 78

Applied Materials, Inc. (NASDAQ:AMAT) supplies production equipment, services, and software to the semiconductor, display, and other related sectors. Semiconductor Systems, Applied Global Services, and Display & Adjacent Markets are Applied Materials, Inc. (NASDAQ:AMAT)’s three segments.

On April 25, Barclays analyst Blayne Curtis maintained an Equal Weight rating on Applied Materials, Inc. (NASDAQ:AMAT) and trimmed his price target to $150 from $165. He lowered his price expectations across the sector to reflect the stock market’s decline.

According to Insider Monkey’s database, Applied Materials, Inc. (NASDAQ:AMAT) was in the portfolio of 78 hedge funds at the end of the fourth quarter of 2021, up from 68 funds in the quarter earlier.

Applied Materials, Inc. (NASDAQ:AMAT) is a new arrival in Intermede Investment Partners’ Q4 portfolio, as the hedge fund bought about 902,526 shares of the company, worth $142.02 million. Ken Fisher’s Fisher Asset Management is Applied Materials, Inc. (NASDAQ:AMAT)’s most significant stakeholder, with 3.78 million shares worth $498.62 million as of Q1 2022.

Davis Funds, an investment management firm, in its fourth-quarter 2021 investor letter, mentioned Applied Materials, Inc. (NASDAQ:AMAT). Here is what the fund said:

“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”

7. Meta Platforms, Inc. (NASDAQ:FB)

Intermede Investment Partners’ Stake Value: $157,785,000

Intermede Investment Partners’ 13F Portfolio: 3.24%

Number of Hedge Fund Holders: 224

Meta Platforms, Inc. (NASDAQ:FB) is a social media corporation. Virtual reality is Meta Platforms, Inc. (NASDAQ:FB)’s vision for the future. Intermede Investment Partners trimmed its stake in Meta Platforms, Inc. (NASDAQ:FB) by 4% during the fourth quarter of 2021. The fund owns 469,111 shares of Meta Platforms, Inc. (NASDAQ:FB), worth over $157.79 million, representing 3.24% of the portfolio. Meta Platforms, Inc. (NASDAQ:FB) has featured on the portfolio of Intermede Investment Partners since the fourth quarter of 2016. According to Insider Monkey’s database tracking 924 hedge funds in the fourth quarter of 2021, 224 hedge funds held stakes in Meta Platforms, Inc. (NASDAQ:FB), valued at $31.85 billion.

On April 28, MKM Partners analyst Rohit Kulkarni trimmed his price target on Meta Platforms, Inc. (NASDAQ:FB) to $295 from $315 but maintained a Buy rating on the shares. The company’s Q1 results were mixed, and its Q2 guidance was soft. Still, the post-earnings rally reflected a “collective sigh of relief” that Meta has successfully navigated the “series of headwinds,” according to the analyst.

ClearBridge Investments mentioned Meta Platforms, Inc. (NASDAQ:FB) in its first quarter 2022 investor letter. Here is what the fund said:

“Facebook shares derated following fourth-quarter earnings results and first-quarter revenue guidance that was weaker than expected. We knew going into Facebook’s latest reporting period that Apple’s (NASDAQ:AAPL) iOS14 privacy changes (measurement, loss of signal) would have a near-term impact on earnings, but competition in the social media space (primarily from TikTok) further catalyzed multiple compression in the stock. While TikTok is a competitive threat and Apple’s privacy changes have impacted the industry, we believe these risks are manageable and Facebook retains a number of advantages around user scale, advertiser scale, new product development and sophistication of its digital advertising technology that are not being valued at current levels.”

6. Amazon.com, Inc. (NASDAQ:AMZN)

Intermede Investment Partners’ Stake Value: $171,465,000

Intermede Investment Partners’ 13F Portfolio: 3.52%

Number of Hedge Fund Holders: 279

Amazon.com, Inc. (NASDAQ:AMZN) is a web retailer and cloud computing infrastructure provider. Fluence Energy, Inc. (NASDAQ:FLNC) signed a cloud computing agreement with Amazon.com, Inc. (NASDAQ:AMZN) Web Services on May 5 to support Fluence’s hardware and software platforms. Due to its investment pricing restraint, Wedbush analyst Michael Pachter removed Amazon.com, Inc. (NASDAQ:AMZN) from its Best Ideas List on May 2. He assigned an Outperform rating to the stock and a price target of $3,500.

Amazon.com, Inc. (NASDAQ:AMZN) remains the top 2021 stock holding among hedge fund managers. As of the end of the fourth quarter, 279 hedge funds in Insider Monkey’s database held stakes in Amazon.com, Inc. (NASDAQ:AMZN), an increase compared to 242 funds in the preceding quarter.

According to the 13F filings for the fourth quarter of 2021, Intermede Investment Partners held 51,424 shares of Amazon.com, Inc. (NASDAQ:AMZN), amounting to more than $171.47 million and representing 3.52% of the fund’s portfolio.

In addition to Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Amazon.com, Inc. (NASDAQ:AMZN) is one of the tech stocks on the radar of Barry Dargan’s Intermede Investment Partners.

In its Q1 2022 investor letter, Farrer Wealth Advisors mentioned Amazon.com, Inc. (NASDAQ:AMZN). Here is what the fund said:

“Amazon: We had a medium-sized position in Amazon which we exited after the company released its earnings. We thought earnings on aggregate were just fine and were especially impressed to see AWS (Amazon Web Services) start to reaccelerate its growth, up nearly 40% yoy. However, looking beneath the hood a little bit, we noticed a significant slowdown in the 1P and 3P ecommerce businesses that enjoyed a nice covid-bump in previous quarters. The international business also saw negative yoy growth as the covid bump deflated and competition heat up in markets such as Southeast Asia, Latin America, and India. None of these issues individually were a huge cause for concern, but they did force us to lower our internal projections. Given this, we felt the internal rate of return (“IRR”) baked into the price post-earnings was not particularly attractive given other opportunities available, and so, we exited the position. None of this is to say that Amazon is in any trouble, and we believe current investors will do just fine over time. We remain big fans of the companies and think Prime and AWS may be some of the best businesses ever created, so we reserve the right to buy back the position at cheaper valuations (or at a higher potential IRR).”

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Disclosure: None. 10 Tech Stocks to Buy Now According to Barry Dargan’s Intermede Investment Partners is originally published on Insider Monkey.

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