4 billionaire stocks couldn’t stop buying in Q2

You may not have realized it, but this Friday August 14th was one of the most important days of the third quarter. This is because it marked the deadline for filing Form 13F with the Securities and Exchange Commission.

For those who do not know, 13Fs are necessary for companies with more than $ 100 million in assets under management. They provide a look under the hood, so to speak, to see what the brightest and most successful minds on Wall Street have been up to in the previous quarter. Given the heightened volatility we have seen in 2020 due to the 2019 Coronavirus Disease Pandemic (COVID-19), understanding how top fund managers put their money to work has certainly been interesting.

With the second quarter with the strongest rally for the wide S&P 500 since 1998 it is no surprise that we have seen active buying. But what might surprise investors is that billionaire fund managers simply couldn’t stop buying the next four high-growth stocks in the second quarter.

Pinterest

Social media site Pinterest (NYSE: PINS) is the first action billionaire investors just couldn’t avoid. Larry fink’s Black rock swallowed up more than 10.1 million shares in the second quarter, as Gabriel Plotkin of Melvin Capital Management initiated a new position of 4.4 million shares. Overall, all management companies required to file a 13F increased their overall stake in Pinterest by 17.7% from the first quarter sequentially.

Why Pinterest? Look no further than exceptional growth in the company’s users. While most social media sites see user growth stagnating after a few years, Pinterest has continued to gain momentum, especially in international markets. As of June 2020, Pinterest had 416 million monthly active users (MAUs), with 106 million of the 116 million UAMs added in the past 12 months located outside the United States. Although international users generate a lower average revenue per user (ARPU), there is an incredible opportunity for long-term growth of ARPU overseas.

Plus, Pinterest is a booming ecommerce game. It makes sense to connect small businesses with users who literally speak to the world about the products and services that interest them. In partnership with Shopify, improving accessibility and product search, and focusing on video content to boost member engagement, Pinterest appears to have a winning formula that should translate into double-digit growth in the long run.

Innovative industrial properties

Surprise! Billionaire fund managers couldn’t keep their hands on marijuana stocks, either. In particular, the Cannabis Focused Real Estate Investment Trust (REIT) Innovative industrial properties (NYSE: IIPR) was very popular. Steven Cohen’s Point72 Asset Management added more than 229,000 shares in the second quarter, with BlackRock on almost 235,000 shares as well. In total, the overall ownership of 13F filers increased 22.7% from the first sequential quarter.

While marijuana is expected to be one of the fastest growing industries this decade, most pot stocks are struggling to grow. This is not the case for Innovative Industrial Properties, which is the purely most profitable cannabis stock per share. Beyond the high upfront costs of purchasing new growing and processing assets, REITs tend to have a low-cost operating model that is conducive to healthy operating profits and large dividend payouts.

Innovative Industrial Properties owns 61 properties in 16 states, which is a significant increase from the 11 assets it owned at the start of 2019. These properties have a weighted average lease term of 16.1 years. The company is on track to recover its invested capital in approximately six years, based on the company’s last reported average return on invested capital of over 13% in the first quarter. In other words, Innovative Industrial Properties offers consistency in a highly unpredictable space.

Quickly

It might not come as a shock that the work from home cloud darling Quickly (NYSE: FSLY) is another stock billionaires couldn’t stop buying in the second quarter. Jeff Yass’ Susquehanna International added nearly 256,000 shares of Fastly in the second quarter, with Ken Griffin’s Citadel Advisors taking in just over 142,000 shares. In total, 13F reporting shareholders have increased by almost 45% compared to the first sequential quarter.

The interest of billionaires in Fastly makes perfect sense. This is a company whose sole purpose is to make the delivery of content fast and secure. Over the past five months, consumers have had no choice but to avoid the crowds and shop online more than ever because of the pandemic. This growing reliance on ecommerce plays out perfectly in Fastly’s hands, as it has had no trouble becoming the preferred edge cloud platform for Shopify and Pinterest, among other top internet-centric companies.

Fastly is also growing at a rapid pace. The company’s latest quarterly report showed sales growth of 62% year-over-year with a net dollar expansion rate of 137%, up from 133% in the sequential quarter. Not only do existing customers continue to spend more with Fastly, the total number of customers grew at its fastest pace in the second quarter since the company’s IPO. All signs are that Fastly’s growth rate could accelerate in the years to come.

Focus on video communications

Billionaire fund managers also couldn’t stop hitting the buy button when it comes to the cloud-based communications platform Focus on video communications (NASDAQ: ZM). Jim Simons’ Renaissance Technologies added nearly 4.5 million shares to its existing position during the second quarter, with BlackRock increasing its stake to nearly 3.8 million shares. As of June 30, overall ownership of Zoom shares had increased by 30% among 13F depositors.

Similar to Fastly, connecting the dots has become really easy with Zoom due to the ongoing pandemic. With the standard office virtually dead for now, business meetings are going on virtually. A cloud-based communication, voice and audio platform, Zoom has been a major beneficiary.

In early June, Zoom Video reported its operating results for the first fiscal quarter through April 30 and completely erased even Wall Street’s strongest expectations. The number of customers contributing more than $ 100,000 in revenue over the past 12 months increased 90% year over year, while customers with 10 or more employees increased by 354%, which means a increased use of small and medium enterprises. Total sales increased 169% year-over-year, with free cash flow catapulting to $ 251.7 million, from $ 15.3 million the year before.

Zoom is crushing him, and billionaires are rightly riding his coattails.