Delta Air Lines, Inc. (NYSE:DAL) Q4 2022 Earnings Call Transcript January 13, 2023

Operator: Good morning everyone. And welcome to the Delta Air Lines December Quarter and Full Year 2022 Financial Results Conference Call. My name is Matthew, and I will be your coordinator. At this time, all participants are in a listen-only mode until we conduct a question-and-answer session following the presentation. As a reminder, today's call is being recorded. I would now like to turn the conference over to Julie Stewart, Vice President of Investor Relations. Please go ahead.

Julie Stewart: Thank you, Matthew, and good morning, everyone. And thanks for joining us for our December quarter and full year 2022 earnings call. Joining us from Atlanta today, our CEO, Ed Bastian; our President, Glen Hauenstein; our CFO, Dan Janki. Ed will open the call with an overview of Delta's performance and strategy, Glen will provide an update on the revenue environment and Dan will discuss costs in our balance sheet. After the prepared remarks, we will take analyst questions. We ask that you please limit yourself to one question and a follow-up, so we can get to as many as possible. After the analyst Q&A, we will move to our media questions. Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events.

All forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from the forward-looking statements. Some of the factors that may cause such differences are described in Delta's SEC filings. We will also discuss non-GAAP financial measures and all results exclude special items unless otherwise noted. You can find a reconciliation of our non-GAAP measures on the Investor Relations page at ir.delta.com. And with that, I will turn the call over to Ed.

Ed Bastian: Thank you, Julie. Good morning, everyone. We appreciate you joining us today. Earlier Delta reported our full year results including our December quarter earnings per share of $1.48 on record revenue that was 8% above 2019 levels. We generated a 12% operating margin, our third consecutive quarter of double-digit operating margins pointing to the strength of our recovery. I want to sincerely thank the 90,000 strong Delta team for their outstanding work in delivering these results and serving our customers during a very busy holiday travel season. In my opinion, 2022 was the most difficult operational year in our history and was capped off by severe winter storms over the holidays. I am grateful to our employees for their great work to recover the operation, while keeping our customers and each other safe.

They are the reason our brand and customer loyalty is at the top of the industry. Our December quarter earnings per share and margins exceeded guidance, marking a strong close to a year where we made significant progress regarding restoration of our financial foundation. For the full year, we reported earnings of $3.20 per share on $46 billion of revenue. We delivered pre-tax income of $2.7 billion, an improvement of more than $6 billion over 2021. Delta's profitability led the industry and in our nearly 100-year history, 2022 was our seventh highest result even with a $1 billion loss in the first quarter. We are pleased to report positive free cash flow for the year, which funded $6 billion of capital invested back into the business and we repaid close to $5 billion in gross debt.

Sharing our success is a longstanding pillar of Delta's culture and I am proud to announce that we will be paying our employees $550 million in well earned profit sharing come Valentine's Day. 2022 came in ahead of our plan on revenue, earnings and cash flow, demonstrating strong execution in the first year of the three-year plan we laid out at the 2021 Capital Markets Day. I am incredibly proud of the team for rebuilding the world's best performing airline, and importantly, we are not just building back, we are continuing to improve and extend our competitive advantages. Delta's brand continued to strengthen in 2022, with record performance from our loyalty and co-brand card programs, and customer satisfaction scores consistently perform above pre-pandemic levels.

Through the year, we have hired and trained 25,000 new employees, now representing over a quarter of the total company. Our team showed their operating talent and resilience as we retained our number one position in completion factor and on time arrivals amongst our peer set, despite having so many new team members. The Delta brand is centered on our safe, reliable and exceptional service, and our operational excellence was recognized by Cirium last week, which named us yet again the most on time airline in North America. We fortified our international partnerships in 2022, position -- positioning us for profitable international growth in the years ahead. As detailed last month, expanding our international margins to domestic levels is an important opportunity for Delta in the years to come.

We have invested in the customer experience at every stage of the travel journey, from the continued refresh of our fleet with next-generation far more fuel efficient aircraft to generational airport rebuilds and technology investments that are providing our employees better tools and our customers a more seamless experience. And we continue to attract and partner with leading brands to grow our SkyMiles ecosystem and further enable customers to use their SkyMiles during travel and beyond. Heading into 2023, our momentum continues. At the Consumer Electronics Show in Las Vegas just last week, we unveiled the next phase in our vision to connect the Sky. Starting February 1st, Delta will be the first major U.S. airline to provide fast, free, unlimited WiFi to all through a free SkyMiles account.

This will be available on nearly 80% of our U.S. system to start and growing every week. By the end of next year, we expect to deliver this service seamlessly throughout the rest of our international and regional fleets. And we debut Delta Sync, which will create personalized experiences and engagement opportunities on the free WiFi portal. We are partnering with great brands like T-Mobile and Paramount+, as well as building on our longstanding relationship with American Express to bring to life our vision of a more connected and personalized travel experience. As a trusted consumer brand, Delta continues to differentiate the premium flying experience, building loyalty and supporting our ambition to transcend the industry. Moving to our outlook, at our Investor event last month, we provided full year 2023 guidance for revenue growth of 15% to 20% year-over-year, earnings of $5 per share to $6 per share and free cash flow of over $2 billion.

We are affirming that guidance today and introducing our March quarter outlook, which Glen and Dan will provide in detail. For the March quarter, we expect to deliver a 4% to 6% operating margin and improve our pre-tax income by more than $1 billion compared to the same period last year. Importantly, we are embedding the assumed impact of all labor cost increases throughout our guidance metrics. We are pleased to have reached an agreement in principle with our pilots, but out of respect for the process, we will not be discussing the details of the agreement on today's call. As I outlined last month, I have never seen a more constructive backdrop for the industry. Demand remains strong as passengers return to the skies and industry returns to the long-term trend to GDP, all while supply constraints continue.

I believe our industry will see tens of billions of dollars of incremental demand in the next few years coming out of the pandemic. As the industry leader with a proven strategy and strong execution track record, Delta is well positioned to build on our momentum in the New Year. We are confident in our ability to deliver significant improvement in earnings and free cash flow in 2023, consistent with the plan we laid out last month and we are on track to deliver our 2024 targets of more than $7 of earnings per share and $4 billion of free cash flow. As always, we remain mindful of the macroeconomic trends and have demonstrated that we have the tools to effectively manage a changing economic climate. In closing, Delta delivered in 2022, outperforming our plan and leading the industry operationally and financially.

We are uniquely positioned to grow earnings and cash flow in 2023, 2024 and beyond. The power of our premium brand continues to grow, and with the very best people in the industry, I couldn't be more excited about what's ahead for Delta and our customers. Thank you again. With that, I will turn it over to Glen.

Glen Hauenstein: Thank you, Ed, and good morning, everyone. I couldn't be prouder of what the Delta people accomplished throughout 2022 and I want to congratulate our teams on their much deserved profit sharing payout they will be receiving next month. For the full year, we generated revenue of $46 billion, a $19 billion improvement year-over-year. We delivered record December quarter and full year unit revenues, sustaining our revenue premium to the industry of more than 110%. For the 12th consecutive year, Delta was named the number one corporate airline in Business Travel News survey, as we continue to invest in our network and product offerings. And through the year, we made significant progress on our long-term commercial strategy to deepen our network advantages, expand premium revenues, grow our loyalty ecosystem and further diversify our revenues.

Starting with our network strategy, we focused on solidifying our positions in coastal gateways, while protecting our core hub shares. We secured the leading positions in both Boston and Los Angeles, while increasing local market share in our core hubs. Premium let all year with paid load factors higher than 2019 and yield growth outpacing Main Cabin, while basic economy made up less than 5% of revenue, half of the 2019 levels. We expanded our Delta Premium Select rollout during the year. Customer response has been positive and the cabin performed better than our initial expectations. Our rollout continues in 2023 and we will have this product on 84% of our international wide-body fleet by this summer. Our loyalty program continued to exceed our expectations with record SkyMiles acquisitions in 2022, 42% higher than 2019.

As Ed noted, we are partnering with leading companies to expand our loyalty ecosystem, increasing the value of our program for customers and deepening customer engagement with Delta. With an expanding ecosystem and free, fast WiFi, we expect continued growth in our loyalty base. Our partnership with American Express delivered record results, with full year remuneration of $5.5 billion, ahead of our initial target and positioning us to deliver over $6.5 billion in 2023 and over $7 billion in 2024. Cargo revenue was a record in 2022 and we expect to grow cargo revenues in 2023, as increased capacity offsets the cargo yield environment. With strong execution across our business lines, a record 55% of revenue was generated by premium products and diverse revenue streams.

We are confident in our path to exceed 60% by 2024. While not without challenges, 2022 was a strong year for Delta and we exited the year with momentum. During the December quarter, we generated revenue of $12.3 billion, 8% higher than 2019 on 9% less capacity. We saw revenue recapture at the end of December that offset the impact of weather disruptions in our system around Christmas. Fourth quarter unit revenues were 19% higher than 2019, with strength driven by consumer demand throughout the quarter. Corporate travel demand was steady through the quarter, with corporate domestic sales 80% recovered to 2019 levels. We expect March quarter revenue to be up 14% to 17% higher versus 2019. On capacity approaching full restoration, we expect March quarter unit revenues will be up 15% to 17% compared to 2019, including a 2-point impact from higher stage.

Based on how we are deploying our network, our stage length is expected to be up 5 points compared to 2019, resulting in a higher restoration of ASMs and seats. This is a temporary dynamic that is unique to Delta among major carriers. Stage will begin to normalize relative to 2019 and relative to the industry as we rebuild our core hubs later this year. For 2023, we expect to grow revenue 15% to 20% year-over-year as we fully restore our network and further diversify our revenue streams. Consumer demand remains healthy, with advanced bookings significantly ahead on both yield and load factor for each month of the March quarter compared to 2019. And in our recent corporate survey, results were positive with 96% of respondents expecting to travel as much or more in 1Q than 4Q led by financial services.

In the New Year, bookings reflect the survey optimism and are accelerating. International revenue continues to be led by the transatlantic. We are seeing robust demand across our expanded footprint in Europe and expect the spring and summer to set new record revenues. Latin America is performing very well, led by Mexico, the Caribbean and Central America, with a recovery in Deep South America now accelerating. And we are pleased with the early results from the launch of the LATAM JV and I am excited about the opportunities for us in 2023 and beyond. In the Pacific, we expected record first quarter profits in both Australia and Korea as our multiyear international transformation delivers on anticipated results. Japan is also building momentum and we expect a very strong summer there.

And lastly, with China, indicating its reopening, we expect to rebuild capacity in line with demand starting later this year. In closing, we delivered on our key commercial priorities in 2022, supporting a significant improvement in our revenue, while strengthening our competitive advantages. We have started the New Year with great momentum and are well positioned to extend our leadership position in the years ahead. And with that, I will turn it over to Dan to talk about the financials.

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Dan Janki: Great. Thank you, Glen. In 2022 we made significant progress restoring our financial foundation. We delivered earnings of $3.20 per share, with pre-tax income of $2.7 billion, ahead of our plan. Operating margins of 7.8% was driven by three quarters of double-digit margins. We improved profitability and the strong advanced bookings. We generated $6.2 billion of operating cash flow, enabling continued investment in our people, our fleet, our partners and technology. After gross CapEx of $6 billion, we generated $244 million of free cash flow. We ended the year with liquidity of $9.4 billion and adjusted net debt of $22.3 billion. Our adjusted net debt to EBITDAR was 5 times and our after-tax return on invested capital was 8.4%.

We finished the year strong, reporting a $1.4 billion operating profit on a margin of 11.6% for the December quarter. Our non-fuel costs were 13.4% higher than 2019, in line with guidance, excluding a 1-point impact from the severe winter weather in late December. Now moving to guidance, as Ed mentioned, we are including all expected labor rate increases in our guidance metrics, including non-fuel CASM. As it relates to our pilots, if they vote to ratify the proposed agreement by March 1st, pay rates would be retroactive to January 1st. This results in a 3-point impact on our non-fuel unit costs for the year and in each of the quarters. Including this in the full year guidance we gave last month brings our 2023 non-fuel unit decline to 2% to 4% on a year-over-year basis.

Delivering a competitive cost structure is a key financial priority. Delta has led the industry an investment in our people and our customers and this is embedded in our outlook, as is a full reset of regional costs and inflation. As we move through the year, scale and efficiency will drive a decline in 2023 non-fuel CASM versus 2022. While approaching 2019 capacity provides scale benefits, we are still bearing the cost to fully restore our network to the peak summer levels, with a continued emphasis on operational reliability during this ramp-up. We expect to complete our rebuild by the second half, with the majority of our flex fleet reactivated and training levels for our flies reverting to historical levels. This will allow a significant shift of resources from training to production, giving us the confidence in our ability to deliver a fully restored network during the peak summer period, while enabling our operating teams to drive efficiency in the back half of the year.

One unique item within the year is the pacing of our core maintenance, as we prepare to step up the network for summer flying with the first half year-over-year higher than the second -- and then lower in the second half of the year. While these dynamics impacting early part of the year, we expect 1Q non-fuel unit cost to increase 3% to 4% on a year-over-year basis. We expect the year-over-year unit cost to progressively improve through 2023 as we complete our rebuild and elevated maintenance activity, while driving efficiency across our operating groups. This cadence is consistent with our full year outlook for non-fuel unit cost to decline 2% to 4% year-over-year. With our outlook for revenue, we expect the March quarter operating margins to be 4% to 6% and earnings of $0.15 per share to $0.40 per share.

For the full year, we are regulating our outlook for earnings of $5 per share to $6 per share and operating margins of 10% to 12%, delivering a 2-point to 4-point expansion of margins, including over 1-point impact from higher profit sharing. We expect the full year free cash flow to be more than $2 billion with gross CapEx of $5.5 billion. In 2023, non-operating expense is expected to be $470 million higher year-over-year. These results from non-cash pension expense increasing over $550 million year-over-year due to broad market declines, more than offsetting the reduction in interest expense from repaying debt. We plan to pay cash for our $2.4 billion in debt maturities, while opportunistically reducing debt with excess liquidity. This will bring our leverage to 3 to 3.5 target for 2023 and remaining on track for 2024 adjusted debt-to-EBITDAR to be 2 times to 3 times.

Returning to investment grade metrics by 2024, while continuing to reinvest in the business remains our focus for capital allocation. In closing, I want to thank -- add my thanks to the Delta team and people for their hard work this year. We outperformed the first year of our three-year plan and we entered 2023 on track to generate a significant improvement in both earnings and cash flow. We remain confident in delivering on our 2024 target of $7 of earnings per share and generating over $4 billion of free cash flow. With that, I will turn it over back to Julie for our Q&A.

Julie Stewart: Thanks, Dan. Matthew, can you please remind the analysts how to queue up for questions.

Q&A Session

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Operator: Certainly. Your first question is coming from Catherine O'Brien from Goldman Sachs. Your line is live.

Catherine O'Brien: Good morning, everyone. So good to be back. So maybe I will start with a question on the capacity bottlenecks that you mentioned in your prepared remarks Ed. So I know Delta itself has made a lot of progress in hiring and getting through a large wave of training, but there are other constraints outside of the airline industry's control with aircraft delivery slower than planned and aviation infrastructure still fairly strapped at airports, the FAA. Now I know the answer will be different for Delta than some of your peers were further behind in their pilot hiring, but how do you think about the time line to remove some of these bottlenecks across the industry that aren't directly in airlines control and I guess really what I am asking is, do you expect there to be continued tension between supply and demand over the medium-term, just how do you think about those rolling off? Thanks so much.

Ed Bastian: Thanks, Catie, and welcome back. Yeah. I think you summed it up well and I mentioned at the Capital Markets Day last month that while we -- at Delta and I think the industry broadly provides you, our capacity expectations. I think expectations have quotation marks around them and they do feel still a little bit more aspirational than because there are a number of things that are outside of our control. We are doing our very best to get our people in place. The hiring is strong. We have the team assembled. We need to get them through, principally our pilots to the training -- the limited training devices and school house that we have available to us. We expect by the summer that we will be in position to have not just get through most of that bottleneck, but then the large resource drain that it takes with respect to all of the training that are existing team has to do to train our new employees, whether that's pilots or flight attendants, mechanics, the airports, reservations.

It doesn't matter where in the system you sit. That's hard to see. I can appreciate that if you are sitting in your chair, but it's very meaningful here on the airline. And then by summer, we hope at Delta that we will be able to be back 100%. I also use the term fragile last month when speaking about the aviation system as we continue to return to the skies, and I think we have seen just in the last few weeks a couple of illustrations of that fragility. So we are going to continue to do our best to make sure we don't fly in excess of our capabilities so that we can deliver a great product for our customers and provide all the tools and support for our employees.

Catherine O'Brien: That's great. Helpful, Ed. And if I could maybe just for my follow-up. Glen, I know 75% of this year's growth by your core hubs. Can you help us think about RASM performance at your core hubs versus the rest of your network or even better since we know its lower cost capacity? Can you help us think about the margin differential of adding capacity in core hubs versus competitive coastal hubs? Thank you so much.

Glen Hauenstein: Sure. I think we outlined that at the Investor Day and core hub is about 10 points higher than coastal hubs and 10 points in margin.

Ed Bastian: Yeah.

Glen Hauenstein: And about 20 points in terms of RASM. I think as we continue to build our core hubs out we will see, that's one of the things we are counting on is acceleration of profitability in those core hubs and driving efficiency so we are getting them back to scale. As we mentioned in our Investor Day, we are already at scale in our coastal cities. That was our priority, just because we thought it was a once in a lifetime opportunity during the pandemic and so that was our priority to ensure that we came out in a good position there. I think we are very happy with the positions we have established there and now it's back to the core where we think it's actually easier lifting.

Catherine O'Brien: Thank you very much.

Operator: Thank you. Your next question is coming from Ravi Shanker from Morgan Stanley. Your line is live.

Ravi Shanker: Thank you. Good morning, everyone. Ed, you said in your prepared remarks that you have never seen a more constructive industry backdrop. Black Swan event aside, what do you see are probably the biggest risks or things to watch out for the industry in 2023? Is it your previous response on kind of infrastructure and things that's outside of your control or kind of what are you looking at?

Ed Bastian: Well, thanks, Ravi. I -- that's right. I think the most important thing that Delta we can do is to continue to restore confidence back to the traveling public. We know the traveling. The public wants to travel in outsized amounts that we see continuing and we have to do our very best not to disappoint them as they return to the skies, I think, 2022 was very difficult. In that regard, demand clearly exceeded our ability to supply it for lots of ways, including in the service levels with the exceptional degree of service that we want to provide our customers. And I think we all in the industry owe it to our customers to make sure we don't fly in excess of our capabilities. So I think that's the single biggest thing that we all need to pay attention to and so I wouldn't call it a Black Swan risk other than just trying to stay within our capability.

Ravi Shanker: Understood. And maybe as a follow-up maybe for Glen. Can you just unpack your thoughts on corporate in the near term, a little bit more, I think, that's, obviously, one of the big focus areas for investors right now. You said 96% of corporate in your survey say that they are going to be kind of flat to up in the near-term, but obviously, macro is really choppy. We saw some of the hotel data kind of coming into January take a bit of a step down. What are you seeing in terms of your booking curve kind of any signs at all on cracks and corporate demand given where macro is?

Glen Hauenstein: We have had our highest post-pandemic days in terms of corporate booking over the last week or 10 days. So we see a very strong post-holiday demand set. We are in kind of a strange period right now because you over 2019. This is an MLK weekend and MLK weekend was next weekend. So I think once we get past MLK, we will give you a better view. But we are counting on it to stay in that roughly 80%. That's not -- the survey would indicate that it's better than that. So I think that's -- if it does materialize is better than that, that's upside for our forward looking forecasts.

Ravi Shanker: Very helpful. Thank you.

Operator: Thank you. Your next question is coming from Scott Group from Wolfe Research. Your line is live.

Scott Group: Hey. Thanks. Good morning. Glen, if I look at the RASM guide for Q1, down about 6% just in absolute terms from Q4, so that's worse than normal Q4 to Q1 seasonality. Any color on that and then when do we really start to see this hub tailwinds show up in RASM?

Glen Hauenstein: Right. Well, quarter-over-quarter, we had a 2-point increase in domestic stage. So, and that again is unique to Delta and we think that's about 1 point of pressure from the 19 down to the 16. There's another international mix, length of haul changing internationally as well. So that's another point. And so then we are thinking about this as really being sequentially about 1 point difference to get from a 91% restoration all the way up to 99% restoration. So our core -- for core same-store sales, we are actually seeing first quarter being stronger than fourth quarter and with that sequential improvement from February being better than January and March being better than February. So I think we are sitting in a pretty exciting place right now as we look at how 2023 is starting.

Ed Bastian: Then the rebuild of the core.

Glen Hauenstein: The rebuild of the core, we wish we could do it sooner. Again, I think, our priority has been to make sure that we can sustain industry leading operations and so that's going to work throughout the year. I think when we talked about it at the Investor Day, we didn't really give you color that this is not a first quarter event. While there's some rebuild domestically in the core, the major rebuilds we expect, for example, Atlanta, which was about 85% last year in terms of seats to be close to 95% by summer and then 100% by fall with Minneapolis close to Atlanta and then Detroit a little bit behind. So we are working on that, that's our priority and we will get there we believe by fall, but it really doesn't impact significantly the first quarter's core.

Scott Group: Okay. And then just for Dan, just help bridge us from CASM up 3% to 4% in Q1 to down 2% to 4% for the year? You mentioned maintenance, how much does that hurt Q1, how much has that then helped the back half, any color here? Thank you.

Dan Janki: Yeah. Certainly. There's two pieces in there. Maintenance being one, it's about a 2-point headwind in the first quarter and first half and it's driven by engine induction levels and scope of work related to that. As you get into the back half of the year, that's a 2-point to 3-point benefit year-over-year, so a 5-point progression from beginning to end. And then the second piece of that is related to the completion of our rebuild and those rebuild costs stepping down. Most of our rebuild over 85% of that cost is in the first half of the year. You don't have that in the back half of the year. And as Glen just talked about, one of the enablers that efficiency is, as we restore the core hubs, these low-cost subs, low CP most cost competitive as we put that capacity and that drives efficiency of our assets and our workforce.

That is 5 points. So the 5 points related to that and the 5 points related to maintenance is 10-point progression as you go through the year from the beginning to the end and that drives that continuous cadence improvement as you go through the quarters.

Scott Group: Helpful. Thank you, guys.

Operator: Thank you. Your next question is coming from Sheila Kahyaoglu from Jefferies. Your line is live.

Sheila Kahyaoglu: Thank you, and good morning, everyone. First, I wanted to maybe ask about just profitability levels. You finished the year with 8% margins and are guiding to Q1 with 4% to 6%, and given the full year guide, how do we think about margin progression throughout the year?

Dan Janki: It will -- part of it is tied to the cost progression and as you see that progression being up, and I said to you get about a 10-point improvement in cost from beginning to end, that will drive your expansion of margins throughout the year as you progress, along with what then Glen talked about, which was the commercial rebuild related to the core. So you will see this progression. Certainly, year-over-year, the improvement versus the comp that we are coming off drives some material improvement here in the first quarter over $1 billion pre-tax, a big part of the step-up in earnings year-over-year, but you will also see improvement as we go through the year.

Sheila Kahyaoglu: That's helpful. And then just maybe one follow-up related to that, just margin progression. I think, Ed, you mentioned high margin Pacific routes opening up, I think, it was Australia and Korea, what are one time to two items we should watch for as we see that international recovery help margin momentum?

Ed Bastian: Our international recovery is well underway, and if you think about Europe, we will actually be bigger in the transatlantic this year than we were in 2019 by about 8 points in terms of seats. Early advanced bookings for that are incredibly strong, so we are very pleased with how that's developing. And so what's really left to reopen is China and that's -- we are not going to get ahead of ourselves in terms of capacity to China. We are going to be very mindful to see how demand warrants and how this opens up, but that's the big question mark, I think, in terms of international demand for 2023 that we don't know yet. I think the others we are very confident that we have a good path forward that will get us back to 2019 or bigger at better margins.

Dan Janki: And I think as we talked about at Investor Day, the multiyear progression on international, the structural elements here, right? The next-generation fleet that we are at, the reconfiguration of more premium seats with DPS, better cargo capability stronger partner network, all those are systematic drivers not only in this year but really on a multiyear basis.

Ed Bastian: And if you go back in our history, not to go into too much detail, but we had a multiyear restructure of our Asia capacity and that has been a drag on earnings for many years leading up to the pandemic. And now as we come out of that, we feel like our restructuring is really done in earnest and so we should see really good improvements in Pacific profitability moving forward.

Sheila Kahyaoglu: Great. Thank you very much.

Operator: Thank you. Your next question is coming from Jamie Baker from JPMorgan. Your line is live.

Jamie Baker: Hey. Good morning, everybody. And Glen, it's been a while since we visited the topic of domestic and international RASM premiums. We know what those metrics were pre-COVID, there's obviously been quite a bit of international upheaval since then, a bit of domestic change, and of course, the premium market at least is stronger than what I was anticipating in 2019. How should we think about the magnitude of Delta's RASM premiums going forward and any related timing?

Glen Hauenstein: Yeah. I think right now we are sitting probably at a low point relative to the industry given our stage length and the way we rebuilt the airline and I would expect to gain a couple 2 points to 3 points domestically back as we get towards the back half of the year on how we rebuild the airline. So that's how I view it. I am pleased with -- at a macro level or at an individual flight level, I am pleased with where we are. When you add it all up, sum total looks like we are taking a step backwards, but I think, it's really the way we have done it rather than a structural look away from Delta or anything that we are losing customers. So I think we are in a good spot for that.

Jamie Baker: Okay. Thank you. And second for Dan, as we think about the order book, particularly on the wide-body side, considering the OEM backlogs that -- Catie, welcome back by the way, I mentioned in her question. How should we be thinking about the cadence of CapEx in the coming years? We tend to model you on a normalized basis, but one of your competitors is on a CapEx holiday, another right now is on a CapEx vendor. I am just trying to assess whether 2024 represents a potential peak in cash flow in light of future aircraft needs?

Dan Janki: I think it's steady as it goes. We have been very consistent, very deliberate, very disciplined related to CapEx. We certainly had this period where this past year in 2022, there was some catch-up in there. We are continuing to do that here in 2023 for what was deferred for a couple of years. But I think as you exit 2024, you are normalized. Now, at the same time, we are getting bigger as an airline and growing from that perspective, but I think with -- it's a good foundation for us as it relates to where we are stepping off in 2024.

Ed Bastian: Yeah. Jamie, this is Ed. I'd agree with Dan's comments. Don't forget we are exclusively taking Airbus equipment over the last couple of years, the next couple of years pretty much and we will be back with the MAX starting in 2025. So we did not have any supply interruption of any note over the last couple of years through the pandemic this year or the years going forward. So there's a consistency and I am confident you are going to see a -- you are not going to see any jumps or any significant declines. We are ensuring that we are staying rated within our sweet spot here on the fleet.

Jamie Baker: That's the answer we were looking for. Thank you everybody. Take care.

Operator: Thank you. Your next question is coming from Duane Pfennigwerth from Evercore ISI. Your line is live.

Duane Pfennigwerth: Hey. Thanks. Good morning and thanks for the time. Maybe just start with Glen on transatlantic. Typically, this is a pretty quiet time of the year, but it appears the industry is sort of doing less seasonal shaping or kind of deseasonalizing transatlantic, which probably makes sense in light of rebuild for the summer. Can you just talk about what you are seeing in transatlantic less about this summer and more about getting from here to there?

Glen Hauenstein: Right. Well, there's not a lot of room between here and there. We are seeing really robust bookings for March and beyond. So it's really, if I look at how we view the transatlantic, there's April through October peak spring, March is getting to be a peak month these days. So that leaves you really the non-holiday weeks in November and the non-holiday weeks in January and February as really your low periods and so how we have shaped it this year is we have had a bigger transatlantic in 2019. We had some operational issues in Amsterdam. Excluding those, we were very pleased with the results in the off-peak season and it's setting up really well. Because I think one of the things that you forget about building up for the summer is the first few weeks for the high point of sale U.S. travel are always throwaway weeks, because you have got a significant amount of outbound traffic and very light inbound traffic.

So getting those out of the way earlier in the season and really allowing the summer peak to be even more robust than it has been before is, I think, how we are shaping. So I don't know if I answered your question, but I'd say we really like what we saw. There are things we are going to do differently next year. There are learnings from this year that we can improve on. So we are excited about those learnings and then really excited about the summer peak season here. We think this is going to be a record breaker.

Duane Pfennigwerth: Thank you, Glen. And then just on fuel, maybe this is Ed or Dan. You own a refinery. Can you talk a little bit about your outlook for jet fuel, and I am not asking for guidance, we can obviously see that. But just with respect to the unusually high crack spreads and refining margins, which week-to-week look like we are going to get relief and then that relief sort of goes away, obviously, you have a hedge in that regard, but I wondered if you could talk kind of intermediate term about when the -- when we see sort of refining margin relief?

Dan Janki: Yeah. No. You saw it constrained markets throughout 2022 state elevated certainly was disrupted significantly in the second quarter, particularly we don't anticipate it being at those levels for the current year giving back. But I would say for the next 12 months to 18 months, I think, you are at least in a period where you are structurally constrained. The global flows for both oil and refined products have changed. Things that used to revert both gasoline diesel and jet coming out of Europe into the U.S. aren't taking place. Utilization of refineries are high and you get disruptions, you have seen it as the winter storms came through in December and incredibly low temperatures. Refineries were impacted and you are seeing the rippling effect here in January and the unusual nature even in the last seven days to 10 days, where the physical market is short.

Jet many times throughout 2022 it was diesel and you see a spike. And then the -- as the refineries get the utilization back up and optimize you get a balancing, but they are still tight and we expect them to stay elevated.

Duane Pfennigwerth: Appreciate the thoughts.

Operator: Thank you. Your next question is coming from Savi Syth from Raymond James. Your line is live.

Savi Syth: Hey. Good morning. Glen, could you talk a little bit more about what you are seeing on the corporate demand side on the -- across the international entities and just as you get to the summer, I realized it's early days, but where you expect kind of capacity be restored across these entities?

Glen Hauenstein: Yeah. I think we talked a little bit about that in the previous question, we expect the transatlantic to be about 108% restored to 2019 levels, so it will be bigger than 2019. Most of that is engaged as we bring in the newer, more efficient fleets. So we have some exciting departures. We haven't loaded our entire summer schedule yet. That will be announced over the next eight days to 10 days. There are a few more things we need to put back in. And then in the Pacific, absent of China, we are more than rebuilt in Australia, we are more than rebuilt in Korea and we are about 75% rebuilt in Japan. We expect to be somewhere between 75% and 100% rebuilt in Japan. If we do or don't receive slot waivers -- if we do receive slot waivers, we are probably sitting at 75%.

If we don't, we will go back to 100. And then China is the big question mark, as I mentioned earlier. We just don't know what's going to go on there with demand. So we are not going to get ahead of that and publish a China schedule for the summer that we don't know if we can fly and we don't know if the demand will be there. So we will let demand drive what we are going to fly in China. And then last but not least, in Latin, we are very close to fully restoring Latin right now with Deep South really starting to turn on with our partners at LATAM and getting some really, really positive early results on that. So I think other than China, we are fully restored internationally and we see international restoration where countries are open and that's very similar to domestic at about 80%.

Savi Syth: I appreciate that. And just kind of a quick follow-up, just on the kind of change fees and the revenue that you are seeing here, the dropping of the change fees, what kind of an impact is that having as you kind of think about the network or the revenue and will it be different once things are fully restored versus where it is today?

Glen Hauenstein: Yeah. Change fees accounted for almost $1 billion of revenue in the pre-pandemic world and we were on a path even absent the pandemic to change fees. They have become onerous, people didn't like them and trying to give customers what they want, we were on a path to a different approach that got accelerated and I think we are very happy with where we are today, giving customers choice in how they want to fly. And I'd say we are counting on about half of that $1 billion to be replaced by people who want flexible, fully refundable at time of purchase, which is an option that they are choosing as opposed to being imposed on that. And the rest of that is then coming from a higher share of total customer base and upsells more than covering to produce the record revenues that we expect this year.

Savi Syth: Okay. Great. Thank you.

Operator: Thank you. Your next question is coming from Conor Cunningham from Melius Research. Your line is live.

Conor Cunningham: Hi, everyone. Thank you for the time. Just on the question that Scott talked about the bridge on the cost side. I don't think you mentioned gauge or asset utilization improving throughout there. Can you just provide some color around where you expect those two metrics to kind of be meaningful tailwinds as you move throughout the year? The reason why I asked is that, there's a lot of changes on the regional side, I would think that, that would be a pretty big tailwind from you?

Dan Janki: Yeah. The mainline asset utilization increases about -- mid single-digit about 5% as we progress through the year. So we get the benefit associated with that and as we talked about at Investor Day, we continue to get the benefit associated with gauge.

Glen Hauenstein: Yeah.

Conor Cunningham: Okay.

Glen Hauenstein: Related to regional flying, as you know, we have about a third of our regional flight that flying that has not been flown today and that's also one of the disparities between seat restoration and capacity restoration. We are not expecting a significant increase of that until the end of 2023 and into 2024. So we are going to be carrying that

Dan Janki: We are carrying that under utilization regional

Glen Hauenstein: under utilization.

Dan Janki: network absolutely in our run rate.

Conor Cunningham: Okay. Okay. That makes sense. And then on the Amex targets, I am a little surprised that those aren't being revised up from 6.5%, from 5.5%, I mean that's basically mirroring the capacity growth year-over-year. I would just think that there would be some outperformance just given the fact that, that portfolio has grown a fair bit. Can you just talk about like what you need to see to push those targets up or did you just see a lot of pull forward in consumer spend that kind of inflated the 2022 number, just trying to unpack that a little bit? Thank you.

Glen Hauenstein: Well, we are pretty excited about hitting a $6.5 billion number. Hopefully, there's upside to that. I think its January. We don't want to commit to that. But we are ahead of our long-term goals for that and we continue to find ways to accelerate our long-term goals. And I think next year or maybe even in June we are going to give you what's beyond the $7 billion, because our first market was how do you get the $7 billion, and when we said that, I think, it was a dawning task for us, it was a dawning task for the team, we are there, right? And I think the question really for us and I was investors, okay, you are at the $7 billion, what's next, and that's what we have got to be working on showing you that we are not done here.

Ed Bastian: Yeah. Yeah. And the other thing -- Conor, this is Ed. It's not driven by capacity, as you can appreciate, it's driven by the spend on the portfolio. So that's a pretty sizable increase in portfolio spend as well.

Conor Cunningham: Good problem to have. Thank you, guys.

Operator: Thank you. Your next question is coming from Helane Becker from Cowen. Your line is live.

Helane Becker: Thanks very much, Operator, and hi, team. Thank you. Sort of a question about TechOps, pre-pandemic, you guys were building that business out, it was going to be a more than $1 billion revenue business at some point. How are you thinking about that coming out of the pandemic and into sort of the middle part of this decade into the end or is that something that is another focus or is that being supplanted by the other revenues that you are talking about?

Ed Bastian: Hi, Helane. How are you? This is Ed. We are

Helane Becker: Good.

Ed Bastian: incredibly excited about your question and the MRO, and in fact, we made great progress during the pandemic to continue to accelerate that vision when we sign a deal to acquire the LEAP as part of the MAX deal. So we now have basically all the new engine technologies on our platform with exclusive arrangements and opportunities for third-party work that will extend over the next 20 years. Obviously, in the short-term, our focus is on -- to every extent we have labor and we have supply challenges focusing on the Delta metal and continuing to get the airline itself back up and running. So the MRO has taken a little bit of a backseat over the short-term. But we continue to make the investments where we have got the commitments from all of our partners on the engine side and this is something you are going to hear a fair bit about in June when we look at the strategic discussion that we are looking to create.

Helane Becker: Right. In June. Okay. That's going to be really helpful. And then, Ed, can I please ask you in June, if you will also update us on your diversity and inclusion targets. We talked a lot about that pre-pandemic and then during the pandemic, you have obviously hired 25,000 new people. You mentioned that in your prepared remarks. Can you also at some point update us on how that's going and whether you are meeting your own internal goals? You don't have to share those with us, but if you can share with us how it's coming along? That might be helpful.

Ed Bastian: We will certainly do that, and that was already in the plan, Helane, to go through that in June. The good news is that we are making great progress and we will share our targets, because we share them publicly.

Helane Becker: That's helpful. Thanks so much, team.

Ed Bastian: Thank you.

Glen Hauenstein: Thank you.

Operator: Thank you. Your next question is coming from Andrew Didora from Bank of America. Your line is live.

Andrew Didora: Hi. Good morning, everyone. First question for Glen, I guess, based on my math, it seems like you are assuming PRASM could start to decline sort of in the high-single digits year-over-year as you move through 2023 to kind of get to your 15% to 20% revenue outlook. What drives that assumption particularly given kind of the RASM benefit you should have from your mid-continent growth strategy?

Glen Hauenstein: I think when we look at the progression through the quarter we had some very extenuating circumstances last second quarter and early third quarter with fuel running up over $120 a barrel. And as we think about how we do fuel recapture on the way up, we also as inflation cools down and as fuel comes down, we are not going to keep all of that. We are going to keep as much of it as we can and we are not anticipating that big mobile and fuel, which is driving the sequential decrease. So we will see how it actually rolls out and hopefully it's better than that, but that's how we are thinking about how the year progresses in terms of absolute unit revenues.

Andrew Didora: Yeah. That makes sense. And then I just ask you kind of strategically here, Glen. As you see -- as you have seen the revenue environment continue to show this strength pretty much since kind of almost a year ago, are you seeing any changes in behavior from any of your competitors that may show that they are acting differently today than they would have pre-pandemic? Thank you.

Glen Hauenstein: Yeah. We don't really talk about how our competitors behave. I think what we have seen is we have seen a very big shift in how and why people travel and trying to stay ahead of that in our own planning and make sure that we are capturing where people want to go and what products they want to buy and that's really our continued focus and it's been a very interesting journey.

Andrew Didora: Yeah.

Glen Hauenstein: And as you look at individual market levels, we are very different sizes than we were pre-pandemic based on where our customers want us to take in these days.

Andrew Didora: Great. Thank you.

Operator: Thank you. Your next question is coming from Mike Linenberg from Deutsche Bank. Your line is live.

Mike Linenberg: Oh! Hey. Good morning, everyone. Hey, Glen, just a quick question sort of following up on Conor's on loyalty. It feels like with the free WiFi, this is going to be a banner year for SkyMiles, I think, last year $8.5 million. How do we think about the conversion of number of SkyMiles to ultimately those who take -- uptake on the credit card, I think this last year, it was like an 8:1 ratio. Is that kind of what it's been historically?

Glen Hauenstein: Yeah. I think that's about right. That's one of the -- we see the more engaged the customers with Delta, the higher their satisfaction is and so that's really part of that ecosystem that we are really trying to grow is, SkyMiles is an entry point, of course, as everybody knows it's free and now they have an incentive to do that, because there's an immediate benefit to join because you get the free WiFi and so how do we translate that ultimately into more loyal customers who eventually will wind up getting some of our other products and that's really what our flywheel is right now and how we are going to continue to press forward in terms of loyalty.

Mike Linenberg: Great. Very good. And then just second question on Dan, you talked about non-ops, the $470 million headwind, obviously, non-cash pension expense maybe there's some other items. How do we think about through the year, is that ratably, is it lumpy and what tax rate should we be using on March quarter full year? Thank you.

Dan Janki: Yes. 1.3 for the year. The first quarter think of it being closer to -- if it was ratable, it would be about 3.30 a quarter. First quarter will be a little bit higher. We think about it as 3.60 to 3.65 associated with it. And tax rate continues to be consistent, right, in that 24% to 24.5%.

Mike Linenberg: Great. Thank you.

Julie Stewart: We will now go to our final analyst question.

Operator: Certainly. Your next question is coming from Brandon Oglenski from Barclays. Your line is live.

Brandon Oglenski: Keep it to one as well. Dan, can you talk about your normal amortization this year, which I think is about $2.5 billion relative to the $2 billion of free cash flow that you guys are anticipating? And what are your options here, especially in a higher interest rate environment, how does that change your capital priorities in any way?

Dan Janki: Normal -- yes. We have normal maturities at 2.4. We had 1.8 this past year and we ended up retiring $4.5 billion of debt. Ken and the team were opportunistic in regards to debt that we can take out that we think is higher cost and has good economic payback associated with it. And given our liquidity position, as we progress through this year, we will continue to look at those options. There are certainly a number out there that are targets for us, but we will either do it through how we have done it with through tenders, but also just as you go open market repurchases and being smart and going after the higher cost debt, that's a priority. We want to drive down that non-op interest line over time and the team is good at it. They have done it. Did it for a decade. They will continue to do it.

Brandon Oglenski: And I guess, Dan, how does a higher interest rate environment here change your capital priorities, if at all?

Dan Janki: About changing it, I think, it does -- when it may change from cards how you look at some of your debt, some of them that are off of LIBOR and floating have become more attractive to retire in certain situations. So, but we are continuing to be focused on, as you know, it's reinvesting back in the business, but also this path to deleveraging. So continuing to strengthen the balance sheet, reduce debt and drive down those leverage ratios.

Brandon Oglenski: All right. Thank you.

Julie Stewart: That will wrap up the analyst portion of the call. I will now turn it over to Tim Mapes, our Chief Marketing and Communications Officer to start the media questions.

Tim Mapes: Thank you, Julie. Matt, if you don't mind, could we reiterate for the members of the media, the practice for getting in the call queue and in addition to thanking each of them for their time this morning, just to remind everyone around one question and one follow-up so we can get through as many of these as we could please. Thank you.

Operator: Absolutely. Thank you. Your first question is coming from Claire Bushey from Financial Times. Your line is live.

Claire Bushey: Hi. I was wondering, what needs in your opinion to happen at the FAA so that what happened on Wednesday doesn't happen again?

Ed Bastian: Hi, Claire. It's Ed. I missed the first part of your question. Your question is what does the FAA need to do in order to ensure

Claire Bushey: So that.

Ed Bastian: no repeat of Wednesday?

Claire Bushey: Correct.

Ed Bastian: Well, if you saw my comments this morning on CNBC. I think it's very clear that there has to be a call to action amongst our political leaders, the Congress and the White House to fund and properly provide the FAA the resources they need to do the job. We have long talked about the need for modernization of our air traffic control systems. I think this is a crystal clear example of the challenge the FAA has faced when you have aging systems that aren't as resilient as they need to be. You have tools and technologies that are somewhat outdated and staffing levels, not where they need to be. So FAA I know is doing the very best they can with what they have, but we need to stand behind the FAA and we need to take them off the kind of year-by-year funding that seems like they go through that's caught up in political negotiations and realize the importance of having a strong aviation infrastructure and the importance of that to our economy, as well as our public.

Claire Bushey: Thank you.

Operator: Thank you. Your next question is coming from Alison Sider from Wall Street Journal. Your line is live.

Alison Sider: Hey. Thanks so much. I guess sort of a related question, but I guess curious, how much do you think that the infrastructure and aerospace issues are likely to be a constraint on growth for the industry overall, whether it vulnerability of technical systems and lack of redundancy or just controller staffing or what have you, how impactable do you expect that to be going forward?

Ed Bastian: Well, it's according constraint on our ability to grow as an industry. You see the length of flight times they are taking to complete missions. You see the some of the challenges the air traffic control -- controllers have when you get into congested space in the Northeast or down in Florida. There's been a lot -- it's just even during the pandemic itself some real challenges that we have experienced. So there's no question that the investment in a modernized air traffic control system will drive a tremendous amount of efficiencies, as well as growth, which will mean better service for the American public.

Alison Sider: Thanks. And I guess can you talk a little bit about sort of what sort of systems or backup or its own redundancy Delta has, like if there was another outage of the NOTAM system like we saw earlier this week? Is that something that Delta can kind of deal with or work around or is that something you need to have or, yeah, there's anything you can share on that?

Ed Bastian: Yeah. The NOTAM system that went down is an essential system and no airline would fly without having that capability. Interestingly, at Delta, we had and have a long -- a fairly old backup technology that does see that and we were able to keep some of the NOTAM information flowing to Delta. So we probably had a little better opportunity to fly during this stoppage as compared to anyone else, but out of deference to the FAA and making certain that we gave them the ability to make the decisions we didn't utilize that backup system. But it's an important part of our resiliency and redundancy.

Alison Sider: Thank you.

Operator: Thank you. Your next question is coming from Kelly Yamanouchi from the Atlanta Journal Constitution. Your line is live. Kelly Yamanouchi, your line is live. Your next question is coming from Mary Schlangenstein from Bloomberg News. Your line is live.

Mary Schlangenstein: Hi. Thank you. I just wanted to see if I could get you to talk a little bit more about your comments about business bookings remaining steady. It seems like the 80% recovered level in the December quarter is what you had been saying previous to that and I wanted to see if you have got any sort of an outlook beyond the March quarter that gives you confidence that, that corporate recovery is not going to stall at some level?

Glen Hauenstein: We do those corporate surveys, and that's why we do them to see what our corporate partners are thinking about in terms of future travel and it was actually the last one we did, which is for future travel, was the best survey we have had since pre-pandemic in terms of their enthusiasm that more people would be flying in future months than we are flying in current or past months. As I said in the call, we are not counting on that in our current revenue forecast, because sometimes that doesn't come to fruition, but there's a sense of optimism from this pent-up demand for business travel that we see could potentially offset any weakness in the general economy. And we are taking a very cautious look, but -- and we are counting on it being stable and not growing dramatically, but it looks like people think it will grow.

Ed Bastian: Mary, this is Ed.

Mary Schlangenstein: Great.

Ed Bastian: I -- you see in the -- in our country a lot of businesses struggling to get their employees back into the office and I think this is tied to that. As companies return and employees return to office, you are going to see another step up in my opinion of return to more normal trends, including improved business travel. You think of a lot of the big accounts we serve are consultancies legal firms, accounting firms, it's tough for them to get out on the road if they don't have the offices open of their clients and their customers. So I think that's the -- a little bit of the choppiness that Glen was referring to, because that companies are intending to open and have had some -- there's been some stalls going on there, but I do think as we progress over the course of the year, you are going to see more and more of business being done like it used to be done than ever before.

Mary Schlangenstein: Okay. And if I can just follow up, I understand about your survey, but are there bookings that you can see at this point beyond the March quarter that gives you any idea of whether that weakness will continue? And then when you said you are counting on that corporate demand being stable, but not growing dramatically, that's a change though from what you had been seeing. Is that correct, you had been seeing growth, but now you are seeing it more stable?

Glen Hauenstein: Clearly, in the early parts of the pandemic recovery, we saw some accelerated growth. I think we have been pretty consistent at the past couple of quarters and we see some stability in the booking curve at about 80% of revenue. So as you know, business travel usually has the shortest advanced purchase windows and is mostly close in. So we would not have any further visibility beyond the next 60 days to 90 days that would be of any significant help in shedding that water.

Mary Schlangenstein: Great. Thank you.

Operator: Thank you. Your next question is coming from Edward Russell from Skift. Your line is live.

Edward Russell: Hi. Thanks for taking my question. I wonder if you could comment on if Delta saw any benefit from Southwest Airlines operational issues in December, was there an uptick in bookings people buying less ticket sent out, any color would be great?

Glen Hauenstein: Sure. As you know, we had our own weather operations during the peak Christmas holiday travel period, and we saw after that, when we were fully recovered and Southwest was still not back in full swing that we had an uptick in our bookings. That's trended in highly competitive with Southwest markets a little bit into January, but we think that will resolve itself over the next six months to 12 months.

Edward Russell: Thank you.

Tim Mapes: Thank you, Edward. Matt, we have time for one final question, if we could, please.

Operator: Certainly. The last question is coming from Robert Silk from Travel Weekly. Your line is live.

Robert Silk: Yeah. Hi. When you talk about getting back to full pre-pandemic capacity in your major hubs, are you talking about seats or flight numbers? And then what percent of your gauge up, let's say, in Atlanta, what will it be up this summer and how do you think about managing crowds as you increase gauge and bring your flight numbers back up to where they were or beyond?

Glen Hauenstein: Right. We will probably not, for the next couple of years see the flight numbers we did in 2019. We will get seat capacity restoration to 100%, which means that gauge will go up significantly. When you look at our fleet evolution that was always our plan was to continue to grow not by additional departures but by larger airplanes, more efficiency, less fuel burn, better products and services and so that's really what we are intending on doing. The pandemic accelerated that and so you have got our average gauge up by double digits right now. That's partly because we keep taking larger airplanes partly because the regional fleets are less restored.

Robert Silk: Yeah.

Glen Hauenstein: And we think that will normalize out over the next 18 months, but we will probably not for the foreseeable future get back to the flight levels, although we will match or exceed by the end of the year at the historic levels in terms of seat capacity.

Robert Silk: Is there any with the higher gauge, do you end up with more crowded banks in terms of number of passengers or is that a stage by having less flights

Glen Hauenstein: No. I think

Robert Silk: if you have more crack

Glen Hauenstein: that's why we have done these generational builds across our network is that, we knew that bigger gauge was coming, we needed to accommodate it and even for example, here in Atlanta, we have worked closely with the city to reconfigure the deconcourse to be wider than any of the other concourses to accommodate that increased gauge. So we have got short-, medium- and long-term plans to accommodate those gauges. But a lot of that was in our generational builds across the network and we don't think that it's going to be more crowded than it was in 2019 or feel more crowded.

Robert Silk: Okay. Great. That's helpful. Thank you, Glen.

Ed Bastian: Thank you, Robert. Matt that will wrap our call for today. We are grateful for everyone's time and participation.

Operator: That concludes today's conference. Thank you for your participation today.

Get real-time email alerts: Follow Delta Air Lines Inc. (NYSE:DAL)

In this piece, we will take a look at the ten best medical stocks under $5. If you want to jump ahead to the top five stocks in this list, then head on over to 5 Best Medical Stocks Under $5.

The medical industry is one of the most lucrative sectors globally, and it is one that sees the highest spending in terms of research and development, and breakthrough advances through keeping up the pace with technology. The technologies used to research and develop new medicines today would very well be thought of as magic just a century ago, and the biotechnology sector in particular proved crucial in the world's fight against the devastating coronavirus through the use of novel mRNA technologies that target the body's very genetic structure.

As such, market research firms are full of optimism for the medical and healthcare stocks. A research report from Research and Markets suggests that the global healthcare market was worth a whopping $8.4 trillion in 2018 after it grew at a compounded annual growth rate (CAGR) of 7.3% since 2014. From then until the end of this year, the growth accelerated to 8.9%, and the industry will be worth a staggering $11 trillion by the end of this year, believes the research firm. Driving this growth will be factors such as an aging population, technological advancements, and a sedentary lifestyle. Delving deeper inside the industry, the firm outlines that biologics will have the strongest growth rate of 13.6%.

Another report, this time from Insider Intelligence, estimates that healthcare spending accounted for a massive 19.7% of the U.S. gross domestic product (GDP) in 2020. National healthcare expenditure, which sat at $4.1 trillion in 2020, will grow to $6.2 trillion by 2028 according to Centers for Medicare and Medicaid.

A research article published in Health Affairs estimates that national health expenditures will grow by 5.4% between 2018 to 2028, and continue to account for 19.7% of GDP spending by 2028 end. It attributes the growth to the rise in medicine prices and more people signing up for Medicare.

Finally, Policy Advice takes a look at different segments of the healthcare industry to provide a holistic look. For instance, it estimates that an average healthcare employee earns almost $61,000 a year, which is significantly higher than the national average of $47,060. It also outlines that the U.S. healthcare industry is the largest in the world, and it consists of 784,626 companies, with patient care accounting for $1 trillion or 64% of the overall revenue. Looking at the future, the research firm shares that technology is king, with 94% of U.S. hospitals on the road to digitization to avoid doctors having to fill out paperwork, and the Internet of Things (IoT) set to take over hospitals by allowing for improved training, workflow management, and patient monitoring.

Therefore, the healthcare industry clearly has a bright future ahead of it. Out of the hundreds of thousands of companies in it, we have narrowed down a handful of players with low stock prices. The top firms on our list are Verastem, Inc. (NASDAQ:VSTM), Karyopharm Therapeutics Inc. (NASDAQ:KPTI), and CTI BioPharma Corp. (NASDAQ:CTIC).

Our Methodology

We took a broad look at the healthcare industry to pick out which companies have promising technologies and a low share price. These were then evaluated through their product strength, financial performance, and outlook. After this, the companies were ranked through Insider Monkey's Q2 2022 survey of 895 hedge funds. All these stocks are priced under $5 as of October 21.

Best Medical Stocks Under $5

10. T2 Biosystems, Inc. (NASDAQ:TTOO)

Number of Hedge Fund Holders: 3

T2 Biosystems, Inc. (NASDAQ:TTOO) is a diagnostics product manufacturer based in the U.S. The firm makes and sells devices that diagnose pathogens, infections, genes, and skin diseases. It is headquartered in Lexington, Massachusetts.

T2 Biosystems, Inc. (NASDAQ:TTOO) scored a big win in October 2022 when it announced that its products are capable of rapidly detecting sepsis - which is a life threatening medical emergency that is caused by an overreaction by the body's immune system. The firm is also aiming to finish the commercialization of a new system that detects Lyme disease in 2023.

T2 Biosystems, Inc. (NASDAQ:TTOO)'s fiscal year 2021 saw the firm grow its revenue by 55% annually to $28.1 million. Its Sepsis diagnostic machines are operating in a market that sees U.S. hospitals spend $62 billion annually in healthcare costs. By the end of this year's second quarter, three of the 895 hedge funds polled by Insider Monkey had invested in the firm.

Out of these, Israel Englander's Millennium Management is T2 Biosystems, Inc. (NASDAQ:TTOO)'s largest investor. It owns 453,687 shares that are worth $73,000.

Along with Karyopharm Therapeutics Inc. (NASDAQ:KPTI), Verastem, Inc. (NASDAQ:VSTM), and CTI BioPharma Corp. (NASDAQ:CTIC), T2 Biosystems, Inc. (NASDAQ:TTOO) is hot medical stock under $5.

9. Zomedica Corp. (NYSE:ZOM)

Number of Hedge Fund Holders: 5

Zomedica Corp. (NYSE:ZOM) is an animal health firm that develops and sells products that allow for the diagnosis of different diseases in dogs and cats and treating horse and small animal injuries such as broken bones and torn ligaments. The firm is based out of Ann Arbor, Michigan, the United States.

Zomedica Corp. (NYSE:ZOM) posted a 51% revenue growth during its second fiscal quarter as the firm brought in $4.2 million through sales. This growth was fueled by the firm's TRUFORMA diagnostics platform, which brought it $92,000 in sales for a 486% annual increase.

Zomedica Corp. (NYSE:ZOM) is also rapidly diversifying its operations, and it has already acquired two firms this year. The firm's PulseVet platform was also named the National Cutting Horse Association's official shock wave therapy platform to stimulate healing in October 2022. Insider Monkey's Q2 2022 survey of 895 hedge funds outlined that five had invested in Zomedica Corp. (NYSE:ZOM).

8. HOOKIPA Pharma Inc. (NASDAQ:HOOK)

Number of Hedge Fund Holders: 9

HOOKIPA Pharma Inc. (NASDAQ:HOOK) is a bio-pharmaceutical company that develops drugs for kidney patients, prostate cancer, lung cancer, and pancreatic cancer. It is headquartered in New York, New York, the United States.

HOOKIPA Pharma Inc. (NASDAQ:HOOK) partnered up with a large healthcare company earlier this year to provide its arena-virus platform for treating HIV patients. This marked a big win for the firm as the global HIV market is estimated to reach $36 billion in 2027, and provide the firm with huge revenue potential. The firm also signed a deal with the pharma giant Roche in October 2022, through which it will develop a therapy for mutated cancers. This agreement sees HOOKIPA Pharma Inc. (NASDAQ:HOOK) benefit from potentially $1 billion in royalties and net sales.

By the end of this year's June quarter, nine out of the 895 hedge funds polled by Insider Monkey had bought a stake in HOOKIPA Pharma Inc. (NASDAQ:HOOK).

Out of these, David Kroin's Deep Track Capital is HOOKIPA Pharma Inc. (NASDAQ:HOOK)'s largest investor. It owns 5 million shares that are worth $8.2 million.

7. Xeris Biopharma Holdings, Inc. (NASDAQ:XERS)

Number of Hedge Fund Holders: 11

Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) is an American healthcare company that develops therapies for paralysis, excess cortisol levels, hypoglycemia, and Cushing's syndrome. The firm is based in Chicago, Illinois.

Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) grew its revenue by 170% during its first fiscal quarter to bring in $22 million in net sales. This was fueled by its Gvoke glucagon drug growing its prescriptions by 88% annually and managing to capture 22% of the market with total patients growing annually by 12%.

Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) then maintained its strong growth trajectory in the second fiscal quarter, when its 189% revenue growth solidified the upward momentum. During this time period, Gvoke's prescriptions and net revenue also grew, despite a price cut. Insider Monkey's June quarter of 2022 survey covering 895 hedge funds revealed that 11 had invested in the firm. Jefferies set a $4 share price target for the company in October 2022 alongside a Buy rating on the shares.

Xeris Biopharma Holdings, Inc. (NASDAQ:XERS)'s largest investor is Timothy P. Lynch's Stonepine Capital which owns 11 million shares that are worth $17 million.

6. Agenus Inc. (NASDAQ:AGEN)

Number of Hedge Fund Holders: 11

Agenus Inc. (NASDAQ:AGEN) is a biotechnology firm that researches and develops treatments for cancer and immune system disorders. These include cervical cancer, solid tumors, myeloma, and other liver problems. The company also has agreements with large companies such as Gilead, and it is headquartered in Lexington, Massachusetts.

Agenus Inc. (NASDAQ:AGEN)'s partnership with GSK, through which the firm develops respiratory tract disease treatment for older results, yielded fruitful results in October 2022 when the latter announced that the treatment had achieved a vaccine efficacy of 83%.

Agenus Inc. (NASDAQ:AGEN) also has a strong pipeline of drugs, which includes a colorectal cancer treatment that has already shown positive results in patients that had failed to respond to several types of therapies before. This drug, called Botensilimab, reduces genetic polymorphism by a strong 40% in target cancers, through which it outpaces its next closest rival Yervoy, which has failed to show any results. Nikko set an Outperform share rating and a $5 price target for the company in October 2022.

Insider Monkey's Q2 2022 research covering 895 hedge funds revealed that 11 had held a stake in Agenus Inc. (NASDAQ:AGEN).

Out of these, Agenus Inc. (NASDAQ:AGEN)'s largest investor is David Kroin's Deep Track Capital which owns 22 million shares that are worth $43 million.

Agenus Inc. (NASDAQ:AGEN) joins Verastem, Inc. (NASDAQ:VSTM), Karyopharm Therapeutics Inc. (NASDAQ:KPTI), and CTI BioPharma Corp. (NASDAQ:CTIC) in our list of top cheap medical stocks.

Click to continue reading and see 5 Best Medical Stocks Under $5.

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Disclosure: None. 10 Best Medical Stocks Under $5 is originally published on Insider Monkey.

In this article, we discuss 10 best pharma dividend stocks to buy. If you want to see more stocks in this selection, check out 5 Best Pharma Dividend Stocks To Buy. 

As per a Bloomberg report dated September 12, the global bio-pharma market was valued at $274.10 billion in 2020 and is forecasted to reach $703.28 billion by 2027 with a CAGR of 12.5% over the forecast period. The factors which will contribute to the growth of the pharma sector include the heightening prevalence of chronic diseases, increasing investment in research and development, and the growing pharmaceutical innovations. The global bio-pharma market will witness continuous growth on the back of higher need for vaccines with new diseases being discovered all over the world.

The outlook for the pharma industry remains positive for 2023. The industry will potentially exceed $1 trillion by next year, given that multiple last-stage clinical trials are set to be approved and hundreds of new products will be patented in 2023 and beyond. Some key trends which will shape the pharmaceutical industry in 2023 include the use of artificial intelligence, the acceptance of cannabidiol (CBD) for medical purposes, precision medicine, the use of blockchain technology in the pharmaceutical industry, smaller manufacturing facilities, digitization, state-mandated discounts and rebates, and an increased focus on research and development. Nearly 38% of market experts anticipate big data to have the highest impact on the pharmaceutical industry.

Investors who want to benefit from the growing pharma industry, and are seeking dividend-paying firms for their portfolios, can monitor stocks like Amgen Inc. (NASDAQ:AMGN), Bristol-Myers Squibb Company (NYSE:BMY), and Merck & Co., Inc. (NYSE:MRK). 

Our Methodology 

We selected the following pharma dividend stocks based on positive analyst coverage, strong business fundamentals, and solidity of dividend profiles. The dividend yields as of October 27 have been mentioned. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022. 

Best Pharma Dividend Stocks To Buy

10. GSK plc (NYSE:GSK)

Number of Hedge Fund Holders: 34

Dividend Yield as of October 27: 5.59%

GSK plc (NYSE:GSK) was founded in 1715 and is headquartered in Brentford, the United Kingdom. The company engages in the development, manufacture, and marketing of pharmaceutical products, vaccines, over-the-counter medicines, and health-related consumer products. It operates through four segments – Pharmaceuticals, Pharmaceuticals R&D, Vaccines, and Consumer Healthcare. The company’s dividend yield on October 27 came in at 5.59%. 

On October 20, GSK plc (NYSE:GSK) reported that its vaccine Shingrix was able to offer at least a decade of protection against shingles after initial vaccination in adults aged 50 years and over. Vaccine efficacy was 97% in individuals 50 years and older and 91% in adults 70 years and above over a follow-up period of roughly four years.

Morgan Stanley analyst Mark Purcell on October 12 raised the price target on GSK plc (NYSE:GSK) to 1,650 GBp from 1,550 GBp and maintained an Equal Weight rating on the shares.

According to Insider Monkey’s second quarter database, 34 hedge funds were long GSK plc (NYSE:GSK), compared to 33 funds in the prior quarter. Ken Fisher’s Fisher Asset Management featured as the biggest stakeholder of the company, with 19.6 million shares worth $851.80 million. 

In addition to Amgen Inc. (NASDAQ:AMGN), Bristol-Myers Squibb Company (NYSE:BMY), and Merck & Co., Inc. (NYSE:MRK), GSK plc (NYSE:GSK) is one of the best pharma dividend stocks to invest in. 

9. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)

Number of Hedge Fund Holders: 40

Dividend Yield as of October 27: 5.34%

Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is based in Deerfield, Illinois, operating as an integrated healthcare, pharmacy, and retailer in the United States, the United Kingdom, Germany, and internationally. The company has three segments – U.S. Retail Pharmacy, International, and U.S. Healthcare. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is one of the best dividend stocks to invest in. 

On October 13, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) posted a FQ4 non-GAAP EPS of $0.80 and a revenue of $32.45 billion, outperforming estimates by $0.03 and $280 million, respectively. For FY2023, the firm expects adjusted EPS of $4.45 to $4.65 as resilient core business growth is more than offset by slowing 2022 COVID-19 execution and currency headwinds, versus the market consensus of $4.49.

Deutsche Bank analyst George Hill raised the price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $41 from $38 and maintained a Hold rating on the shares on October 25. The analyst's primary takeaway from the latest earnings call is that the speed of decline in the pharmacy sector may have troughed and that Walgreens Boots Alliance, Inc. (NASDAQ:WBA) may be in a position to gain market share.

According to the second quarter database of Insider Monkey, 40 hedge funds were bullish on Walgreens Boots Alliance, Inc. (NASDAQ:WBA), compared to 38 funds in the preceding quarter. Stephen Dubois’ Camber Capital Management is a significant position holder in the company, with 2.82 million shares worth $107 million. 

Here is what Aristotle Capital Management Global Equity has to say about Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q1 2022 investor letter:

“We first invested in Walgreens Boots Alliance in early 2013. Over our holding period, Walgreens merged with U.K.-based Boots Alliance, establishing itself as a global leading retail pharmacy chain. CEO Stefano Pessina set the company on a path of pursuing strategic partnerships (as opposed to vertical integration deals) to increase store traffic and to, over time, transform the business into a neighborhood health destination around a more modern pharmacy. Using its strong FREE cash flow generation, the company ramped up its investments in technology, aiming to accelerate the digitalization of health information. Mr. Pessina was not successful, however, at turning around the firm’s U.S. retail segment and had to deal with increasing prescription drug reimbursement pressures. He stepped down as CEO in 2020, and in 2021, Roz Brewer took the reins of the firm. We admire Ms. Brewer’s impressive track record at companies that include Starbucks (NASDAQ:SBUX) and Walmart (Sam’s Club). However, given management’s decision to divest core cash-generative businesses and redeploy capital to embryonic healthcare startups, we prefer to step aside while we follow the company’s progress.”

8. Cardinal Health, Inc. (NYSE:CAH)

Number of Hedge Fund Holders: 44

Dividend Yield as of October 27: 2.62%

Cardinal Health, Inc. (NYSE:CAH) operates as an integrated healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty drugs, and over-the-counter healthcare and consumer products. On September 15, PayrHealth announced a collaboration with Cardinal Health, Inc. (NYSE:CAH) to help the latter simplify payor contracting and optimize financial performance. It is one of the best dividend stocks to consider. 

On August 29, UBS analyst Kevin Caliendo raised the price target on Cardinal Health, Inc. (NYSE:CAH) to $78 from $61 and maintained a Buy rating on the shares. The company's Pharma segment and the potential for significant capital deployment will support the stock, the analyst told investors. He further cited Cardinal Health, Inc. (NYSE:CAH)’s "cleaner" balance sheet and estimated a forward free cash flow yield of about 10% before dividends.

According to Insider Monkey’s data, 44 hedge funds were long Cardinal Health, Inc. (NYSE:CAH) at the end of June 2022, compared to 38 funds in the prior quarter. Richard S. Pzena’s Pzena Investment Management is the leading position holder in the company, with 2.9 million shares worth $151.35 million. 

7. AstraZeneca PLC (NASDAQ:AZN)

Number of Hedge Fund Holders: 47

Dividend Yield as of October 27: 3.29%

AstraZeneca PLC (NASDAQ:AZN) is headquartered in Cambridge, the United Kingdom, and the company is focused on the discovery, manufacture, and commercialization of prescription medicines. AstraZeneca PLC (NASDAQ:AZN) is one of the best dividend stocks to invest in, with the stock yielding 3.29% as of October 27. Invitae Corporation (NYSE:NVTA) announced a partnership with AstraZeneca PLC (NASDAQ:AZN) on October 27, where the latter can use Invitae's Citizen natural history data in a retrospective and prospective study of patients diagnosed with cholangiocarcinoma, a rare bile duct cancer. 

On October 19, Berenberg analyst Luisa Hector maintained a Buy rating on AstraZeneca PLC (NASDAQ:AZN) but lowered the price target on the shares to 118 GBp from 120 GBp.

Among the hedge funds tracked by Insider Monkey, 47 funds reported owning stakes worth $4.9 billion in AstraZeneca PLC (NASDAQ:AZN) at the end of June 2022, compared to 45 funds in the earlier quarter worth $4.5 billion. Ken Fisher’s Fisher Asset Management held the leading position in the company, comprising 21.3 million shares worth $1.4 billion. 

Here is what Baron Funds specifically said about AstraZeneca PLC (NASDAQ:AZN) in its Q3 2022 investor letter:

“AstraZeneca PLC (NASDAQ:AZN) is a global pharmaceutical company focused on oncology, respiratory, cardiovascular, and metabolism drugs. Despite incremental positive news flow, shares were hurt by the broader flight out of European stocks and the decline in the British Pound that started late in the quarter. We retain conviction in AstraZeneca given its best-in-class growth profile combined with its strong pipeline and commercial launch characteristics. We highlight breast cancer drugs Enhertu and Dato-DXd as two promising near-term opportunities.”

6. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 55

Dividend Yield as of October 27: 2.90%

Amgen Inc. (NASDAQ:AMGN) is a California-based manufacturer of human therapeutics, focused on therapeutic areas such as inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience. On October 18, ChemoCentryx shareholders largely approved Amgen Inc. (NASDAQ:AMGN)’s $3.7 billion acquisition of the company. The acquisition will strengthen Amgen’s product pipeline further.

On October 11, Morgan Stanley analyst Matthew Harrison upgraded Amgen Inc. (NASDAQ:AMGN) to Overweight from Equal Weight with a price target of $279, up from $257. The analyst sees "underappreciated upside" in the company's mid-term pipeline. Amgen Inc. (NASDAQ:AMGN) has defensive positioning in the present macro backdrop, with "attractive" short-term options of AMG133 for obesity and the biosimilar Amjevita launch, the analyst told investors in a research note. 

According to Insider Monkey’s data, 55 hedge funds were bullish on Amgen Inc. (NASDAQ:AMGN) at the end of the second quarter of 2022, compared to 56 funds in the last quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest position holder in the company, with 1.66 million shares worth $404.3 million. 

Like AbbVie Inc. (NYSE:ABBV), Bristol-Myers Squibb Company (NYSE:BMY), and Merck & Co., Inc. (NYSE:MRK), Amgen Inc. (NASDAQ:AMGN) is one of the best dividend stocks to consider. 

Here is what Aristotle Capital specifically said about Amgen Inc. (NASDAQ:AMGN) in its Q2 2022 investor letter:

“Amgen Inc. (NASDAQ:AMGN), the pharmaceutical company focused on biotechnology-based therapeutics, was also a top contributor for the quarter. The company reported solid results, with a variety of products, such as bone-strengthening drugs Prolia and EVENITY, contributing to overall revenue growth. Amgen continued to increase the market share for cholesterol drug Repatha (a catalyst we had originally identified), delivering record quarterly sales as the drug’s usage expands with high-risk patients who have not yet had a cardiovascular event, and as barriers for prescribers, healthcare systems and patients are removed. In addition, we believe the company is poised to gain market share with its biosimilars (akin to generic versions of biologic drugs), also a previously identified catalyst. Biosimilars accounted for over $2 billion in revenue in 2021, and we believe this has the potential to more than double by the end of the decade, accelerated by six additional biosimilars (for a total of 11 products on the market). This includes the upcoming launch in the U.S. of arthritis treatment Amjetiva in January 2023. Meanwhile, the company is advancing its robust pipeline of early- and late-stage assets, with several phase III results due this year. These developments have caused us to remain enthusiastic about Amgen’s ability to build on its decades of success developing novel treatments using biopharmaceuticals.”

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In this article, we discuss the 10 best growth stocks to buy according to Marc Majzner's Clearline Capital. If you want to read about some more stocks in the Majzner portfolio, go directly to 5 Best Growth Stocks to Buy According to Marc Majzner's Clearline Capital.

Marc G. Majzner launched Clearline Capital in February 2013 with a seed capital of $70 million from Talpion Fund Management. He is currently the fund’s portfolio manager.

Majzner earned his Master's of Computer Science degree from Brown University. He later worked as an investment banking analyst at Credit Suisse. Additionally, he was employed at Talpion Fund Management as a senior portfolio manager.

Clearline Capital, based in New York, is a catalyst-driven long/short equity hedge fund. It specializes in mid-cap stocks. The goal of the fund is to generate high absolute rates of return while lowering the risk of capital loss.

At the end of Q2 2022, Clearline Capital’s 13F portfolio was valued at over $773.9 million, down from $869.8 million a quarter earlier. The hedge fund invests in several sectors, including information technology, industrials, consumer discretionary, healthcare, finance, and communications.

Some of the top growth stocks in Majzner's fund portfolio at the end of the second quarter of 2022 included Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Array Technologies, Inc. (NASDAQ:ARRY).

Our Methodology:

For this article, we went through Clearline Capital’s latest 13F filing for the quarter ending June 30 and selected the 10 best growth stocks that were part of the fund’s portfolio.

Growth Stocks to Buy According to Marc Majzner's Clearline Capital

10. Magnachip Semiconductor Corporation (NYSE:MX)

Stake Value in Clearline Capital's 13F Portfolio: $17.34 million

Percentage of Clearline Capital portfolio: 2.24%

Number of Hedge Funds: 27

Magnachip Semiconductor Corporation (NYSE:MX) designs and produces semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The company was previously featured in our list of the best software stocks to buy this quarter.

In September, Magnachip Semiconductor Corporation (NYSE:MX) announced an expansion of its stock repurchase program to $87.5 million.

At the end of Q2, 27 hedge funds in our database had a position in Magnachip Semiconductor Corporation (NYSE:MX).

Here is what Altron Capital Management has to say about Magnachip Semiconductor Corporation (NYSE:MX) in its Q4 2021 investor letter:

MagnaChip Semiconductor Corp. (NYSE:MX). While the previous buyout offer from Wise Road Capital did not go through as many expected, the company is still in talks with other potential buyers. Furthermore, the company announced a USD 75 million share buyback, which represents a significant percentage of the company’s shares. While we do not generally enter positions with the anticipation of a buyout, it is the case that a MagnaChip acquisition will be the most likely outcome.

9. New Relic, Inc. (NYSE:NEWR)

Stake Value in Clearline Capital's 13F Portfolio: $18.89 million

Percentage of Clearline Capital portfolio: 2.44%

Number of Hedge Funds: 41

Headquartered in San Francisco, California, New Relic, Inc. (NYSE:NEWR) provides a software platform that allows website and application owners to track the performance of their services.

New Relic, Inc. (NYSE:NEWR) announced the Q2 2022 results in August, reporting $216.46 million in revenue. The normalized EPS reported was -$0.26. Clearline Capital increased stakes in the company by 93% in the second quarter of 2022. The hedge fund held 377,509 shares in New Relic, Inc. (NYSE:NEWR) worth $18.89 million at the end of Q2 2022.

New Relic, Inc. (NYSE:NEWR) strategic partnerships with companies like Microsoft Azure are also gaining investors’ attention. In September, Credit Suisse analyst Fred Lee initiated coverage of New Relic with an Outperform rating and a $78 price target.

41 hedge funds in Insider Monkey’s database had stakes in New Relic, Inc. (NYSE:NEWR). These hedge funds held shares in the firm worth about $1.20 billion. Eminence Capital, with a position worth $279.24 million, stood as the most significant shareholder of New Relic, Inc. (NYSE:NEWR).

8. Zendesk, Inc. (NYSE:ZEN)

Stake Value in Clearline Capital's 13F Portfolio: $19.10 million

Percentage of Clearline Capital portfolio: 2.46%

Number of Hedge Funds: 63

Zendesk, Inc. (NYSE:ZEN) is a software development company based in California that provides service solutions in the US, as well as internationally. In September 2022, Zendesk (NYSE:ZEN) stockholders approved the software company's merger with a consortium led by Hellman & Friedman and Permira to provide superior value.

Clearline Capital increased stakes in Zendesk, Inc. (NYSE:ZEN) by a staggering 540% in the second quarter of 2022, bringing the value of the stakes to a total of $19.10 million.

Our data shows that Light Street Capital is one of the biggest stakeholders of Zendesk, Inc. (NYSE:ZEN), with 7.29 million shares worth $540.14 million.

At the end of the second quarter of 2022, 63 hedge funds in the database of Insider Monkey held stakes worth $1.89 billion in Zendesk, Inc. (NYSE:ZEN).

In its Q4 2021 investor letter, Carillon Towers Advisers, an asset management firm, highlighted a few stocks and Zendesk, Inc. (NYSE:ZEN) was one of them. Here is what the fund said:

Zendesk, Inc. (NYSE:ZEN) provides customer support software solutions. After successfully navigating the early stages of the pandemic in 2020, the firm has seen its stock cool off on the threat of increased competition from low-cost alternatives. We do not believe that the competitive dynamics have been altered. In fact, the company’s annual revenue growth rate has accelerated in 2021 from the second half of 2020. The shares also currently trade at a deep discount to other cloud-based software vendors.

7. The Brink's Company (NYSE:BCO)

Stake Value in Clearline Capital's 13F Portfolio: $19.54 million

Percentage of Clearline Capital portfolio: 2.52%

Number of Hedge Funds: 20

Based in Virginia, The Brink's Company (NYSE:BCO) provides transportation, cash management, and other security-related services. The company is amongst the top growth stocks in Marc Majzner's Clearline Capital.

Clearline Capital increased stakes in The Brink's Company (NYSE:BCO) by 5% in the second quarter of 2022. The hedge fund held 321,942 shares in Brink's Company (NYSE:BCO), worth $19.54 million.

In line with The Brink's Company (NYSE:BCO) strategy of expansion, it acquired NoteMachine in October 2022 which manages over 9K ATMs in the U.K.

The Brink's Company (NYSE:BCO) reported revenue of $1.13 billion in the second quarter of 2022. The normalized EPS reported was $1.29. Both beat market estimates by $33.07 million and $0.10, respectively. Even though the company faces headwinds due to the macro-economic environment, analysts remain bullish on the company stock. Truist analyst Tobey Sommer kept a Buy rating on the company shares.

At the end of the second quarter, 20 hedge funds tracked by Insider Monkey owned stakes in The Brink's Company (NYSE:BCO). The total value of these stakes is $261.27 million. Ariel Investments is the largest stakeholder in The Brink's Company (NYSE:BCO as of September, with a $132.89 million position in the company.

6. Momentive Global Inc. (NASDAQ:MNTV)

Stake Value in Clearline Capital's 13F Portfolio: $20.31 million

Percentage of Clearline Capital portfolio: 2.62%

Number of Hedge Funds: 41

Headquartered in California, Momentive Global Inc. (NASDAQ:MNTV) provides software solutions to help businesses turn stakeholder feedback into action. The company announced Q2 2022 results in August, reporting $120.16 million in revenue.

Clearline Capital is amongst the top investors in Momentive Global Inc. (NASDAQ:MNTV). In the second quarter, Clearline Capital increased its stakes in Momentive Global Inc. (NASDAQ:MNTV) by 81% bringing the total value of the stake to $20.31 million.

In August 2022, following the release of the company earnings, Wells Fargo analyst Brian Fitzgerald maintained an Overweight rating on the company shares with a price target of $15.

At the close of Q2 2022, 41 hedge funds were long Momentive Global Inc. (NASDAQ:MNTV) with stakes worth $285.03 million. Sachem Head Capital is the largest stakeholder in Momentive Global Inc. (NASDAQ:MNTV) as of August, with a $61.29 million position in the company.

Here is what ClearBridge Investments had to say about Momentive Global Inc. (NASDAQ:MNTV) in its “Mid Cap Strategy” third-quarter 2021 investor letter:

During the quarter we also initiated a position in Momentive Global in the IT sector. Known for its online survey brand Survey Monkey, Momentive is capitalizing on the growing importance of customer feedback, market research and employee engagement. Momentive’s competitive positioning through low-cost pricing has helped it achieve strong brand recognition, with its business enterprise division generating high growth rates and attractive incremental margins.

 

Click to continue reading and see 5 Best Growth Stocks to Buy According to Marc Majzner's Clearline Capital. 

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Disclosure. None. 10 Best Growth Stocks to Buy According to Marc Majzner's Clearline Capital is originally published on Insider Monkey.

In this article, we will discuss the 12 Biggest Genomics Companies In The World. If you want to skip our analysis of the genomics market, you can skip this article and head on to the 5 Biggest Genomics Companies In The World.

Innovative research and advanced methodologies in genomics are being implemented across all science disciplines contributing to the expansion of genomics globally. The global genomics market is estimated to undergo a compound annual growth rate of 18.2% to reach a value of $63.50 billion by 2026. The market growth is primarily driven by increased government funding for genomics research and a spike in the single-cell genomics market. Research surrounding genomics concerns approaches to enhance the safe usage of genomics to augment patient care and serve society through use in government, public and private institutions. For example, the National Center for Advancing Translational Sciences (NCATS) provided funding of $7 million in 2019 to the Hudson Alpha Institute for Biotechnology in Huntsville, Alabama, for a research program catering to a study on the application of radical DNA sequencing technologies that could improve diagnosis and treatment of a spectrum of both command rare diseases.

Companies continue to undertake research for new product development to boost their sales and grow their consumer base, as well as to attain a competitive advantage against their competitors. With the availability of population data from ancient times across various timelines, demographics, and geographics, alongside refined methodologies, genomics is set to witness enhanced integration with other disciplines and experience unprecedented growth.

Therefore, in this article, we are going to talk about the 12 biggest genomics companies in the world. Some of these stocks mentioned in this article were previously covered in 11 Best Immunotherapy Stocks To Buy.

Our Methodology

We have picked the top 12 genomics companies in the world and have ranked them from #12 to #1 in order of their market capitalization.

Biggest Genomics Companies In The World

12. NeoGenomics, Inc. (NASDAQ:NEO)

Market Capitalization: $1.01 billion

Number of Hedge Fund Holders: 15

NeoGenomics, Inc. (NASDAQ:NEO) is a leading provider of cancer-centered genetic and diagnostic services based in Florida, USA. The company's development cycles are extremely swift, keeping its response time and curation timeline highly responsive. The company's clientele includes hospitals, oncologists, pathologists, reference labs, researchers, and pharmaceutical companies. NeoGenomics, Inc. (NASDAQ:NEO has testing facilities throughout the U.S as well as a network of laboratories in California, Florida, Texas, and Tennessee.

On August 26, 2022, Bruce Jackson, an analyst at Benchmark, downgraded NeoGenomics, Inc. (NASDAQ:NEO) to Hold from Buy. The analyst contends that the company has appointed a new CEO and has begun a new program named Project Catalyst, which is a good strategic plan for the future, but currently, the company has nothing to show.

Here is what Artisan Partners specifically said about NeoGenomics, Inc. (NASDAQ:NEO) in its Q2 2022 investor letter:

NeoGenomics, Inc. (NASDAQ:NEO) is the largest cancer diagnostics lab in the US with the broadest menu of tests and deepest reach to oncologists and pathologists, particularly in rural areas where 80% of cancer testing occurs. Our thesis was focused on the company's scale and competitive position as cancer treatment becomes personalized. Unfortunately, the company has faced several headwinds in recent quarters. The delta and omicron COVID-19 variants delayed an anticipated recovery in cancer testing volumes and the company's CEO resigned amid a period of elevated lab expense growth. With our thesis stalled, we ended our GardenSM campaign.

At the end of Q2 2022, Millennium Management held the highest stake in NeoGenomics, Inc. (NASDAQ:NEO), with an investment value of over $17 million in the company. According to Insider Monkey database, 15 hedge funds owned stakes in the company at the end of the June quarter.

In addition to NeoGenomics, Inc. (NASDAQ:NEO), CRISPR Therapeutics AG (NASDAQ:CRSP), Natera, Inc. (NASDAQ: NTRA), and Exact Sciences Corporation (NASDAQ:EXAS) are included in our list of 12 biggest genomics companies in the world.

11. Fulgent Genetics, Inc. (NASDAQ:FLGT)

Market Capitalization: $1.18 billion

Number of Hedge Fund Holders: 17

Fulgent Genetics, Inc. (NASDAQ:FLGT) was incorporated in 2011, and offers a wide menu of genetic and molecular diagnostic tests. Its genetic test comes with a choice between a single gene test or a pre-established panel test which is a customizable offering. The company also caters to genetic sequencing services and whole genome testing. Fulgent Genetics, Inc. (NASDAQ:FLGT) has headquarters in Temple City, California, United States.

On August 24, 2022, Dan Leonard, an analyst at Fulgent Genetics, started coverage of Fulgent Genetics, Inc. (NASDAQ:FLGT) with an Outperform rating and a target price of $65. The analyst stated in a research note that Fulgent Genetics, Inc. (NASDAQ:FLGT) is well positioned to increase its market share in the genetic and oncology testing markets as the company continues to drive value out of its recent acquisitions.

At the end of Q2 2022, Park West Asset Management held the highest stake in Fulgent Genetics, Inc. (NASDAQ:FLGT), with a holding of 629,882 shares of the company, constituting 1.94% of the fund's portfolio. According to Insider Monkey database, 17 hedge funds owned stakes in the company at the end of the June quarter.

10. Myriad Genetics, Inc. (NASDAQ:MYGN)

Market Capitalization: $1.61 billion

Number of Hedge Fund Holders: 14

Incorporated in 1992 and based in Salt Lake city, Myriad Genetics, Inc. (NASDAQ:MYGN) is involved in the development and marketing of genetic tests and personalized medication. Its product portfolio enlists a range of molecular diagnostic tests falling under the franchise of predictive medicine and precision medicine. The company's operational footprint extends over the US, the UK, Germany, Spain, Italy, France, Australia, Japan, Switzerland, and the Netherlands.

On October 05, 2022, Mason Carrico, an analyst at Stephens, initiated coverage of Myriad Genetics, Inc. (NASDAQ:MYGN) with a price target of $22. The analyst currently has an Equal Weight rating on the stock and believes that the company still remains in the initial stages of its expansion phase and the stock remains cheap at the current levels.

According to Insider Monkey database, 14 hedge funds held stakes in Myriad Genetics, Inc. (NASDAQ:MYGN) at the end of the second quarter ending June 2022. Camber Capital Management was the leading stakeholder of the company at the end of Q2 2022, with an investment value of over $90 million in the company.

9. Pacific Biosciences of California, Inc. (NASDAQ:PACB)

Market Capitalization: $1.74 billion

Number of Hedge Fund Holders: 18

Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a biotechnology company based in Menlo Park, California, US. It is engaged in the business of designing, developing, and manufacturing complex genetic sequencing schemes. The company currently has single molecule and real-time technology, which allows for real-time biological observation of biomolecules offering exceptional lengths and accuracy.

On October 19, 2022, Julia Qin, an analyst at JPMorgan, stated in a research note that Pacific Biosciences of California, Inc. (NASDAQ:PACB) has major catalysts for growth in the near term. The analyst currently has an Overweight rating on the stock with a price target of $10. The analyst believes that the company's launch of "Sequel III" will drive growth despite the macro headwinds in the near term.

DEVON Equity Management, an investment firm, highlighted a few stocks in its Q2 2021 investor letter, and Pacific Biosciences of California (NASDAQ:PACB) featured among them. The fund said:

As a final word on Sequencing – we established a position in Pacific Biosciences (PACB US) during the quarter. Pac Bio are the leader in Long Read Sequencing (Illumina are dominant in Short Read). The Long Read market is far less developed than short read, but our continued research into the genomic sequencing field increased our confidence in the commercial viability for Long Read Sequencing in the coming years. We will discuss the investment case for Pac Bio in more detail in a future letter.

As per Insider Monkey database, 18 hedge funds had stakes in Pacific Biosciences of California, Inc. (NASDAQ:PACB) at the end of the June quarter. ARK Investment Management was the most bullish fund on the company's stock, with a total holding of 28,045,530 company stocks at the end of Q2 2022.

8. Krystal Biotech, Inc. (NASDAQ:KRYS)

Market Capitalization: $1.94 billion

Number of Hedge Fund Holders: 12

Krystal Biotech, Inc. (NASDAQ:KRYS) is a fully integrated biotechnology company that is capitalizing on its proprietary HSV-1 vector technology to curate solutions under the discipline of redosable gene therapies. The gene delivery system developed by the company allows for over-the-counter therapies for major dermatological and respiratory illnesses. The company is based in Pittsburgh, US.

On September 22, 2022, Krystal Biotech, Inc. (NASDAQ:KRYS) got a positive nod from a panel of experts of EU drug regulators to go ahead to file their EU marketing application for the therapy of a rare skin disease.

At the end of the quarter ending June 2022, Redmile Group was the leading stakeholder of the company's stock, with an investment value of approximately $124 million in the company's shares. As per Insider Monkey database, 12 hedge funds owned stakes in Krystal Biotech, Inc. (NASDAQ:KRYS) at the end of Q2 2022.

7. 10x Genomics, Inc. (NASDAQ:TXG)

Market Capitalization: $3.04 billion

Number of Hedge Fund Holders: 17

Headquartered in Pleasanton, California, 10x Genomics, Inc. (NASDAQ:TXG) is engaged in the business of designing and manufacturing gene sequencing technology, including tools and software which are utilized by a wide range of scientific research firms. It has more than 3,500 instruments and more than 4,100 publications to its name.

On August 10, 2022, Tejas Savant, an analyst at Morgan Stanley, reduced his price target on 10x Genomics, Inc. (NASDAQ:TXG) to $70. The analyst currently keeps an Overweight rating on the company's stock and stated that the future outlook of 10x Genomics, Inc. (NASDAQ:TXG) after the Q2 result remains firm, and it remains well-positioned going into 2023. The company's fixed RNA profiling and CytAssist is experiencing robust demand, and Xenium is on its way to being launched at the end of the year.

Here is what ClearBridge All Cap Growth Strategy has to say about 10x Genomics, Inc. (NASDAQ:TXG) in its Q4 2021 investor letter:

We also established a position in 10x Genomics (TXG). TXG is the dominant player in single-cell analysis and enjoys a duopoly in spatial profiling, two emerging areas of scientific research. Though the company is not yet profitable, we are attracted to the business's strong gross margin profile and a high degree of visibility as consumables account for 85% of revenue. We also continue to see opportunities for investment in other disruptive areas of health care with large addressable markets, like diabetes.

ARK Investment Management held the highest stake in the company at the end of Q2 2022, with a total holding of 3,603,286 shares in the company. According to Insider Monkey database, 17 hedge funds owned stakes in 10x Genomics, Inc. (NASDAQ:TXG) at the end of the second quarter ending June 2022.

6. Beam Therapeutics Inc. (NASDAQ:BEAM)

Market Capitalization: $3.28 billion

Number of Hedge Fund Holders: 17

Beam Therapeutics Inc. (NASDAQ:BEAM) is engaged in the production and development of genetic medicines by way of its exclusive base editing technology. Its highly diverse portfolio of curative treatments includes modalities that target T-Cell correction, glycogen storage disease, and sickle cell disease. The company is based in Cambridge, Massachusetts.

On September 19, 2022, Beam Therapeutics Inc. (NASDAQ:BEAM) revealed preclinical data regarding the company's multiplex base editing ability to treat hepatitis B. The company's data revealed the capability of HBV-targeting gRNAs and mRNA-encoding CBEs to launch stop codons in HBV DNA which leads to an inhibition of HBV viral markers. The results demonstrate that base editing can introduce mutations that suppress viral protein production, inhibit HBV replication, and render cccDNA and integrated HBV DNA permanently inactive.

Here is what Baron Health Care Fund has to say about Beam Therapeutics Inc. (NASDAQ:BEAM) in their Q1 2021 investor letter:

Beam Therapeutics Inc. is a biotechnology company pioneering a novel technology called base editing, which allows for individual base pairs (the letters of DNA) to be modified. Shares fell along with other biotechnology stocks driven by a sudden rise in treasury yields. Early stage biotechnology stocks are particularly sensitive to interest rates because their cash flows are further in the future. We believe we are entering into a phase of significant advancement for the gene editing field that will eventually lead to curative therapies, and we think Beam has a unique platform technology.

At the end of Q2 2022, ARK Investment Management remained the biggest stakeholder of the company, with a holding of 8,792,064 shares. 17 hedge funds remained bullish on the company at the end of the second quarter, according to Insider Monkey database.

Click to continue reading and see 5 Biggest Genomics Companies In The World.

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Disclosure: None. 12 Biggest Genomics Companies In The World is originally published on Insider Monkey.

In this article we are going to list the 5 biggest companies in the world by employees. For a detailed coverage of this topic and a more comprehensive list please take a look at the 20 biggest companies in the world by employees. Don't forget to subscribe to our free daily enewsletter to find out the latest stocks that hedge funds are buying:

5. Hon Hai Precision Industry

Total number of employees in 2021: 826,608

You may know it better by its international name "Foxconn" but Hon Hai is a Taiwanese electronics manufacturing giant and is considered to be the biggest electronics manufacturer in the world.

4. State Grid

Total number of employees in 2021: 871,145

China has several entries in the list of the biggest companies by employees, and considering the size of these companies, requires a significant number of employees to ensure smooth operations. State Grid, the largest utility company in the world, is one such company.

3. China National Petroleum

Total number of employees in 2021: 1,090,345

The state-owned oil and gas company is one of the biggest energy companies in the world, with oil production of 178.64 million MT and natural gas production of 160.35 million CM natural gas.

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

Total number of employees in 2021: 1,608,000

Amazon.com, Inc. (NASDAQ:AMZN) is one of the largest conglomerates in the world, and when most businesses were letting people go during the pandemic, Amazon.com, Inc. (NASDAQ:AMZN) looked to hire 100,000 people in September 2020 in what was its fourth such hiring spree during the pandemic, as demand for online shopping surged exponentially. Amazon.com, Inc. (NASDAQ:AMZN) has faced severe criticism for several years for the treatment of its employees, with allegations stating that the company doesn't even allow bathroom breaks for its employees. One of the most serious incidents regarding Amazon.com, Inc.'s (NASDAQ:AMZN) treatment of employees was when they were forced to stay in the warehouse, while a tornado warning was in effect, resulting in the deaths of six workers.

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1. Walmart Inc. (NYSE:WMT)

Total number of employees in 2021: 2,300,000

Easily topping the list of the 20 biggest companies by employees is Walmart Inc. (NYSE:WMT), which is one of the biggest companies in the world. Walmart Inc. (NYSE:WMT) is the largest private employer in the world, and is also the biggest company in the world in terms of revenue, with $572.8 billion recorded in the latest annual report. Despite hiring more than 2 million people, Walmart Inc. (NYSE:WMT) has historically been derided for its treatment of workers, including low wages offered to retail employees while the owners, the Walton family, are among the richest people in the world, as well as its anti-union policies.

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In this article, we present the 5 best stocks for beginners with little money. If you want to find out our methodology as well as a more comprehensive list, check out 11 Best Stocks For Beginners With Little Money. Our article used positive analyst ratings to determine the stocks selected for this article. If you are interested in Insider Monkey's Research Director's top stock picks, please consider subscribing to our Premium Readership Newsletter. He holds a Ph.D. in financial economics and his stock picks in our monthly newsletter returned 147% since March 2017 vs. 74% gain for the S&P 500 ETF (SPY) during the same period. At the very least you should subscribe to our free daily newsletter by entering your email address below to find out which stocks hedge funds are buying on a daily basis:

5. Avantor, Inc. (NYSE:AVTR)

Number of Hedge Fund Holders: 51

Share Price as of October 26: $20.99

Avantor, Inc. (NYSE:AVTR) is a Pennsylvania-based company that provides materials, equipment, and consumables to customers in biopharma, healthcare, education, government, advanced technologies, and applied materials industries in the Americas, Europe, Asia, the Middle East, and Africa. Avantor, Inc. (NYSE:AVTR) is one of the top stocks for beginners. 

On October 5, Citi analyst Patrick Donnelly upgraded Avantor, Inc. (NYSE:AVTR) to Buy from Neutral with an unchanged price target of $28. The analyst said there is a "valuation disconnect" following the stock's "significant underperformance." He sees a "potential clearing event" for the stock if the management sets a "more appropriate floor" for fiscal 2023 organic revenue growth guidance on the lower end of the firm’s long-term 4%-6% organic growth target.

Among the hedge funds tracked by Insider Monkey, 51 funds reported owning stakes worth $2.08 billion in Avantor, Inc. (NYSE:AVTR) at the end of June 2022, compared to 57 funds in the earlier quarter worth $2.16 billion. Robert Pohly’s Samlyn Capital is the leading position holder in the company, with 7.75 million shares valued at $241 million. 

Here is what ClearBridge SMID Cap Growth Strategy has to say about Avantor, Inc. (NYSE:AVTR) in its Q3 2021 investor letter:

“Avantor, which distributes proprietary, higher-margin consumables products to life science research companies, has benefited from accretive research & development as well as paying down debt, which has contributed to increased margins and strong stock performance.”

4. PG&E Corporation (NYSE:PCG)

Number of Hedge Fund Holders: 51

Share Price as of October 26: $15.22

PG&E Corporation (NYSE:PCG) engages in the sale and delivery of electricity and natural gas to customers in northern and central California. It generates electricity using nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic sources. On October 7, RBC Capital analyst Shelby Tucker raised the price target on PG&E Corporation (NYSE:PCG) to $19 from $16 and kept an Outperform rating on the shares. The analyst is "encouraged" by the firm’s wildfire mitigation efforts and its inclusion in the S&P 500. PG&E Corporation (NYSE:PCG) is one of the best beginner stocks to invest in. 

Among the hedge funds tracked by Insider Monkey, PG&E Corporation (NYSE:PCG) was part of 51 hedge fund portfolios at the end of the second quarter of 2022, with collective stakes worth $2.7 billion, compared to 51 funds in the last quarter worth $3.2 billion. Dan Loeb’s Third Point is the biggest stakeholder of the company, with 65.4 million shares valued at $652.7 million. 

Here is what Third Point specifically said about PG&E Corporation (NYSE:PCG) in its Q3 2022 investor letter:

“Since we wrote about PG&E Corporation (NYSE:PCG) in May, the Company has continued to close the valuation gap with its regulated peer group. Over the third quarter PCG’s stock rose 25% versus a 6% decline in the XLU (a proxy for the S&P 500 Utilities Sector). Outperformance was driven by the S&P 500 indexing announcement and continued execution by Patti Poppe, the recently hired CEO, and her team. Management has focused its efforts on mitigating physical and financial risk by building in layers of protection against catastrophic wildfires, financial uncertainty, and rate-payer volatility. Importantly for a utility company, Ms. Poppe has a plan to make much needed investments in safety, reliability, and service quality via capital investment while simultaneously reducing operating expenses.

Despite the recent move, we are optimistic about the Company’s prospects with industry leading 10% EPS growth and likely dividend reinstatement in 2023. PG&E, which currently trades at a 6x discount to peers on ’23 earnings, should continue to re-rate as investors become more familiar with the enhanced regulatory framework under AB1054 and build further confidence in management’s execution capabilities.”

3. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 55

Share Price as of October 26: $18.05

AT&T Inc. (NYSE:T), an American provider of telecommunications, media, and technology services worldwide, is one of the best beginner stocks to buy now. On October 20, AT&T Inc. (NYSE:T) reported its Q3 results, posting earnings per share of $0.68 and a revenue of $30.04 billion, exceeding market estimates by $0.06 and $170.54 million, respectively. On September 30, the company declared a quarterly dividend of $0.2775 per share, in line with previous. The dividend is payable on November 1, to shareholders of record on October 10. The forward yield was 7.19%.

Raymond James analyst Frank Louthan on October 24 upgraded AT&T Inc. (NYSE:T) to Strong Buy from Outperform with an unchanged price target of $24. The analyst believes AT&T Inc. (NYSE:T) will outperform Verizon Communications Inc. (NYSE:VZ) over the next few months based on the present operating performance of the two businesses, the analyst told investors in a research note. 

According to Insider Monkey’s Q2 data, 55 hedge funds were bullish on AT&T Inc. (NYSE:T), compared to 74 funds in the last quarter. D E Shaw is a significant position holder in the company, with 11.4 million shares worth about $240 million. 

Here is what Chartwell Investment Partners has to say about AT&T Inc. (NYSE:T) in its Q2 2022 investor letter:

“In the Dividend Equity accounts, the three best performers in Q2 include AT&T (NYSE:T, 2.5%), up 17.1%. AT&T completed the spin off of the WarnerMedia business (HBO, CNN, etc.), and the market seemed to like the “back-to-basics” approach. Also, the telco business is expected to do relatively well in an inflationary environment.”

2. CSX Corporation (NASDAQ:CSX)

Number of Hedge Fund Holders: 63

Share Price as of October 26: $29.00

CSX Corporation (NASDAQ:CSX) is a Florida-based company that provides rail-based freight transportation services. The company transports chemicals, agricultural products, automotive, minerals, forest products, fertilizers, metals, and equipment. On October 6, CSX Corporation (NASDAQ:CSX) declared a quarterly dividend of $0.10 per share, which is payable on December 15 to shareholders of record on November 30. The company also posted market-beating Q3 2022 results, with revenue increasing on the back of higher fuel surcharge, pricing gains, a 2% boost in volumes, and an increase in storage and other revenues.

On October 24, Deutsche Bank analyst Amit Mehrotra maintained a Buy rating on CSX Corporation (NASDAQ:CSX) but lowered the price target on the shares to $36 from $41. The analyst said CSX Corporation (NASDAQ:CSX) continues to operate at a higher level than Union Pacific Corporation (NYSE:UNP), despite both companies facing increased costs from network inefficiencies.

According to Insider Monkey’s data, 63 hedge funds were long CSX Corporation (NASDAQ:CSX) at the end of June 2022, compared to 72 funds in the earlier quarter. Eric W. Mandelblatt’s Soroban Capital Partners is the largest stakeholder of the company, with 52.60 million shares worth $1.5 billion. 

Here is what ClearBridge Investments Global Infrastructure Value Strategy has to say about CSX Corporation (NYSE:CSX) in its Q4 2021 investor letter:

“On a regional basis, the U.S. and Canada were the top contributors to quarterly performance, of which U.S. rail operator CSX was among the lead performers. CSX is one of five leading North American rail companies, with over 21,000 miles of rail, covering 23 states and 40+ ports. CSX is engaged in the transportation of rail freight in the Southeast, East, and Midwest via interchange with other rail carriers, to and from the rest of the U.S. and Canada. CSX performed well during the quarter after the company beats market expectations on its third-quarter results. The beats were largely driven by strong pricing, which could be hitting record highs, and healthy commodity/coal volume driven by the current energy crisis.”

1. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 129

Share Price as of October 26: $28.47

Uber Technologies, Inc. (NYSE:UBER) is one of the premier stocks for beginners to invest in. On October 19, Uber Technologies, Inc. (NYSE:UBER) announced that it has launched Uber Journey Ads, which will use first-party data and insights from Uber's mobility and delivery businesses and place ads on the Uber and Uber Eats apps. 

On October 24, Cowen analyst John Blackledge maintained an Outperform rating on Uber Technologies, Inc. (NYSE:UBER) but slashed the firm's price target on the shares to $70 from $76. The analyst expects Uber Technologies, Inc. (NYSE:UBER)’s Q3 2022 Gross Bookings at the high end of the guidance, supported by the continuous recovery in Mobility and expansion of core EBITDA margins.

According to Insider Monkey’s data, Uber Technologies, Inc. (NYSE:UBER) was part of 129 hedge fund portfolios at the end of June 2022, compared to 144 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 24.5 million shares worth about $501 million. 

Here is what RiverPark Large Growth Fund has to say about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2022 investor letter:

“Uber was our top contributor for the quarter on better-than-expected 2Q results, and 3Q EBITDA guidance that was well ahead of Street estimates. The company reported 33% Gross Bookings growth from both the continued recovery of Mobility Gross Bookings, up 55% year over year, and the continuation of Delivery Gross Bookings growth, up 7% year over year. Overall, revenue grew 105% year over year to $8 billion, generating $364 million of adjusted EBITDA, up $873 million year over year. Management guided to 25%-30% gross bookings growth and adjusted EBITDA of $440-$470 million for 3Q. Significantly, FCF was positive at $382 million, up $780 million year over year, and remains on track to be positive for the year allowing the company to self-fund future growth.

UBER remains the undisputed global leader in ride sharing, with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now solidly profitable with the expectation of substantial margin expansion and free cash flow generation to come. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 120 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage (the company had $1.8 billion in Freight revenue for 2Q22), and worker staffing for shift work. Given its $10 billion of cash and investments against $9 billion of debt, the company today has an enterprise value of $57 billion indicating that UBER trades at only 1.5x next year’s estimated revenue.”

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Cooper Investors, an investment management firm, published its "Cooper Investors Global Equities Fund" third-quarter 2022 investor letter – a copy of which can be downloaded here. The portfolio returned -4.77% in the quarter, versus the benchmark return of -5.52%. Profound US Dollar strength was a feature of the period; the A$ fell -6.5%, Yen -6.1%, Euro -6.3%, and the Pound - 8.1%. Try to spare some time to check the fund's top 5 holdings for you to have an idea about their best stock picks this 2022.

In its Q3 2022 investor letter, Cooper Investors Global Equities Fund mentioned Costco Wholesale Corporation (NASDAQ:COST) and explained its insights for the company. Founded in 1976, Costco Wholesale Corporation (NASDAQ:COST) is an Issaquah, Washington-based big-box store company with a $209.4 billion market capitalization. Costco Wholesale Corporation (NASDAQ:COST) delivered a -16.63% return since the beginning of the year, while its 12-month returns are up by 1.33%. The stock closed at $473.27 per share on October 18, 2022.

Here is what Cooper Investors Global Equities Fund has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2022 investor letter:

"The US economy continues to run hot – the labour market is extremely tight and a number of executives we spoke to described their challenges in retaining staff and preventing competitors from poaching talent. Industrial companies in particular continue to see record backlogs, with the easing of logistics and supply chain constraints only just starting to have an impact on deliveries and lead times.

In terms of inflationary pressures, the vast majority of our holdings have been able to leverage strong market positions and stakeholder relationships to push pricing through in 2022 such that minimal impact to earnings has occurred. Clearly this is not a lever than can be pulled indefinitely but the more experienced management teams have kept some of their powder dry. Our meeting with management at Costco in Seattle was memorable for several reasons but one was their latent ability to increase member pricing which they have not done in over 5 years (and thus likely to do in 2023)...

...To conclude we’ll return to our meeting with Costco mentioned earlier. The business quality is no secret after decades of incredible execution, but the meeting gave us renewed conviction around Value Latencies in terms of the runway for growth, the focus on enhancing customer value, Costco’s vast buying power (it purchases 30% of the world’s jumbo cashews as one example) and management’s feral focus on the business model and cost discipline."

Our calculations show that Costco Wholesale Corporation (NASDAQ:COST) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Costco Wholesale Corporation (NASDAQ:COST) was in 64 hedge fund portfolios at the end of the second quarter of 2022, compared to 61 funds in the previous quarter. Costco Wholesale Corporation (NASDAQ:COST) delivered a -9.03% return in the past 3 months.

In April 2022, we also shared another hedge fund’s views on Costco Wholesale Corporation (NASDAQ:COST) in another article as well as in 20 Cheapest States To Live In. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.

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Claret Asset Management, an asset management firm, published its third quarter 2022 investor letter – a copy of which can be downloaded here. According to the fund, higher interest rates will eventually act as a brake to this economy on steroids that is mainly funded through extreme fiscal largesse and printed money by central banks. The fund invests in companies with real business models that are well-run, have great prospects, and generate positive cash flows for the foreseeable future. Try to spare some time to check the fund's top 5 holdings for you to have an idea about their best stock picks this 2022.

In its Q3 2022 investor letter, Claret Asset Management mentioned Credit Suisse Group AG (NYSE:CS) and explained its insights for the company. Founded in 1856, Credit Suisse Group AG (NYSE:CS) is a Zürich, Switzerland-based investment banking company with an $11.7 billion market capitalization. Credit Suisse Group AG (NYSE:CS) delivered a -53.01% return since the beginning of the year, while its 12-month returns are down by -57.14%. The stock closed at $4.53 per share on October 13, 2022.

Here is what Claret Asset Management has to say about Credit Suisse Group AG (NYSE:CS) in its Q3 2022 investor letter:

"We also mention that before the bear market is over, we could witness some sort of credit event. Credit Suisse could be one of them. It is almost unthinkable that a Swiss giant in finance can manage to destroy itself through speculative and dumb decisions/acquisitions made by incompetent management throughout the 90s and the 2000s. Shareholders paid a hefty price, having witnessed a stock price of CHF 65 in 2007 diving toward today’s CHF 4. Then again, anything can happen in finance, especially when stupidity is compounded by over Leverage and il Liquidity, the same L squared we mentioned in the last letter."

Our calculations show that Credit Suisse Group AG (NYSE:CS) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Credit Suisse Group AG (NYSE:CS) was in 9 hedge fund portfolios at the end of the second quarter of 2022, compared to 10 funds in the previous quarter. Credit Suisse Group AG (NYSE:CS) delivered a -13.88% return in the past 3 months.

In April 2022, we also shared another hedge fund’s views on Credit Suisse Group AG (NYSE:CS) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.

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In this article, we will be taking a look at some of the top stocks in the portfolio of Jeffrey Diehl. To skip our analysis of Jeffrey Diehl’s profile, investment strategy, and 13F holdings, you can go directly to see the 5 Best Stocks to Buy Now According to Jeffrey Diehl's Adams Street Partners.

Jeffrey Diehl is the managing partner and current head of investments of Adams Street Partners. Adams Street Partners is a Chicago-based private equity markets investment firm. Before joining Adams Street, Jeffrey Diehl worked as a Principal at the Parthenon Group, a strategy consulting and principal investing company with roots in Bain Consulting. Being a partner since 2000, he is in charge of managing the company in addition to supervising the general procedure and plans that the investment team creates.

Adams Street Partners' last reported 13F filing for Q2 2022 included $384.119 million in managed 13F securities. The hedge fund has undertaken portfolio rebalance during Q2 by purchasing 3 new stocks and increasing its share in 1 stock. The fund also sold 5 stocks and reduced its holding in 1 stock. Some of the notable stocks that the fund sold during Q2 include UiPath Inc. (NYSE:PATH), Squarespace, Inc. (NYSE:SQSP), and Roblox Corporation (NYSE:RBLX).

Our Methodology

10. Aptinyx Inc. (NASDAQ:APTX)

Adams Street Partners Stake Value: $3.010 million

Percentage of Adams Street Partners 13F Portfolio: 0.78%

Number of Hedge Fund Holders as of Q2 2022: 5

Aptinyx Inc. (NASDAQ:APTX) was founded in 2015 and is based in Evanston, Illinois. It is a clinical-stage biopharmaceutical company that focuses on the discovery, development, and commercialization of novel, proprietary, and synthetic small molecules for the treatment of brain and nervous system disorders.

On August 26, Raghuram Selvaraju, an analyst at H.C. Wainwright, cut his price target on Aptinyx Inc. (NASDAQ:APTX) to $1 from $2 and kept a Buy rating on the shares. On August 12 last month, Aptinyx Inc. (NASDAQ:APTX) stock fell 34% after the news broke about the mid-stage study failure of its musculoskeletal pain drug NYX-2925. The stock has lost 85% value year to date.

Jeffrey Diehl's Adams Street Partners is the largest shareholder of Aptinyx Inc. (NASDAQ:APTX) as of Q2, holding 5.39 million of its shares worth $3.010 million. The number of hedge funds holding Aptinyx Inc. (NASDAQ:APTX) shares has reduced to half during Q2 as a total of 5 hedge funds are holding a stake as compared to 10 in the previous quarter.

09. Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS)

Adams Street Partners Stake Value: $3.243 million

Percentage of Adams Street Partners 13F Portfolio: 0.84%

Number of Hedge Fund Holders as of Q2 2022: 7

Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) is a clinical-stage biopharmaceutical company that focuses on the development and commercialization of immuno-oncology therapies. The company was incorporated in 2014 and is based in Burlingame, California. On September 26, Angel Pharma, a Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) partner, received approval to begin a phase 1/1b cancer therapy trial in China.

On August 9, analyst Li Watsek with Cantor Fitzgerald cut his price target for Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) to $4 from $8 and maintained an Overweight rating on the stock. Watsek believes that the short-term CPI-818 data, which will be presented in December at the annual American Society of Hematology meeting, could improve the current negative sentiment surrounding the company.

Samuel Isaly OrbiMed Advisors is the largest shareholder of Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), holding 6.94 million of its shares worth $6.8 million. Hedge fund sentiment around Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) has decreased in the second quarter of 2022, with 7 hedge funds long the stock, compared to 13 in Q1 2022.

08. HashiCorp, Inc. (NASDAQ:HCP)

Adams Street Partners Stake Value: $5.107 million

Percentage of Adams Street Partners 13F Portfolio: 1.32%

Number of Hedge Fund Holders as of Q2 2022: 15

HashiCorp, Inc. (NASDAQ:HCP) provides multi-cloud infrastructure automation solutions worldwide. The company was incorporated in 2012 and is based in San Francisco, California. HashiCorp, Inc. (NASDAQ:HCP) is a new addition to Jeffrey Diehl's 13F portfolio as the fund acquired 173,478 of its shares during Q2.

On September 2, Stifel analyst Brad Reback cut his price target on HashiCorp, Inc. (NASDAQ:HCP) to $45 from $51 and kept a Buy rating on the shares after the company reported a "strong" fiscal Q2 and raised guidance for the full year despite factoring in a $4 million-$6 million headwind to revenue.

Coatue Management was the leading hedge fund investor in HashiCorp, Inc. (NASDAQ:HCP) during Q2 2022. At the end of the second quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $103.3 million in HashiCorp, Inc. (NASDAQ:HCP), compared to 14 in the preceding quarter worth $114.38 million.

Unlike UiPath Inc. (NYSE:PATH), Squarespace, Inc. (NYSE:SQSP), and Roblox Corporation (NYSE:RBLX), which it sold in Q2, Jeffrey Diehl's Adams Street Partners is bullish on HashiCorp, Inc. (NASDAQ:HCP).

07. Fusion Pharmaceuticals Inc. (NASDAQ:FUSN)

Adams Street Partners Stake Value: $7.340 million

Percentage of Adams Street Partners 13F Portfolio: 1.91%

Number of Hedge Fund Holders as of Q2 2022: 7

Fusion Pharmaceuticals Inc. (NASDAQ:FUSN) was incorporated in 2014 and is situated in Hamilton, Canada. Fusion Pharmaceuticals Inc. (NASDAQ:FUSN) is a clinical-stage oncology company that focuses on developing radiopharmaceuticals as precision medicines.

On September 15, Fusion Pharmaceuticals Inc. (NASDAQ:FUSN) was given coverage by Truist analyst Nicole Germino with a Buy rating and a $10 price target. Although Jeffrey Diehl's Adams Street Partners sold some notable stocks such as UiPath Inc. (NYSE:PATH), Squarespace, Inc. (NYSE:SQSP), and Roblox Corporation (NYSE:RBLX) during Q2, it is bullish on Fusion Pharmaceuticals Inc. (NASDAQ:FUSN). Adams Street Partners initiated a position in Fusion Pharmaceuticals Inc. (NASDAQ:FUSN) by acquiring 3.5 million of its shares worth $55.06 million during Q2, 2020. The fund has been holding a constant stake of 2.947 million shares worth roughly $7.34 million in the stock since Q3, 2021.

06. Couchbase, Inc. (NASDAQ:BASE)

Adams Street Partners Stake Value: $18.417 million

Percentage of Adams Street Partners 13F Portfolio: 4.79%

Number of Hedge Fund Holders as of Q2 2022: 7

The company was formerly known as Membase, Inc. and changed its name to Couchbase, Inc. in February 2011. Couchbase, Inc. (NASDAQ:BASE) was incorporated in 2008 and is based in Santa Clara, California. It provides a database for enterprise applications worldwide. On September 8, Rob Oliver, a Baird analyst, maintained an Outperform rating on the shares while lowering his price target for Couchbase from $25 to $22. According to the analyst, the company recorded a strong Q2 with gains in revenue growth, profitability, and ARR growth. In addition, Q2 being a record quarter for pipeline generation, the analyst claimed that neither demand for their products nor customer purchasing habits had changed significantly.

GPI Capital is the largest shareholder of Couchbase, Inc. (NASDAQ:BASE), holding 4.36 million of its shares worth $71.748 million. Adams Street Partners lowered its stake in the stock during Q2 by 38% holding 1.12 million Couchbase, Inc. (NASDAQ:BASE) shares worth $18.417 million. At the end of the second quarter of 2022, 7 hedge funds in the database of Insider Monkey held stakes worth $107.753 million in Couchbase, Inc. (NASDAQ:BASE), compared to 8 in the preceding quarter worth $128.876 million.

“Couchbase, Inc., a new position in the Fund after a successful IPO, provides a modern database that collects and stores data and powers enterprise applications, for which there is no tolerance for disruption, inaccuracy, or downtime. The Couchbase database is based on a platform called NoSQL, which means that rather than having a pre-determined rigid structure to store data (like legacy relational database software), it stores data in documents, making it easy to have a flexible set of items that can move into and out of each record. Its solution is fast as it utilizes caching, or retrieval from memory, versus hard drives; scales to large numbers of records, which is expensive for old-style relational databases and not even possible with some of the other NoSQL solutions; and works in all settings (on-premise, in the cloud, or in mixed hybrid environments). Couchbase is addressing a large total market of $62 billion, which is slowly migrating to the cloud and using less rigid database structures. We believe Couchbase can win its fair share of these workloads over time given its unified platform, ability to scale run anywhere, and its familiar query language that makes it easier for developers to quickly create solutions. The company’s growth rate is currently being impacted by COVID (about 15% of Couchbase’s customers are in the travel and hospitality industries), but we believe a return to normal pre-COVID spending levels later this year and into early 2022 should help to accelerate growth. Longer term, we believe that management will improve its go-tomarket efficiency, which will further accelerate growth. Given that revenues are only about $150 million now, it has a huge opportunity in this $62 billion marketplace, and we expect that Couchbase will be a profitable investment for many years to come.”

Click to continue reading and see 5 Best Stocks to Buy Now According to Jeffrey Diehl's Adams Street Partners.

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Disclosure. None. 10 Best Stocks to Buy Now According to Jeffrey Diehl's Adams Street Partners is originally published on Insider Monkey.

In this article we take a look at some of the biggest discount store companies in the world. You can skip our detailed analysis of the discount store industry and go directly to see 5 Biggest Discount Store Companies in the World.

Discount store companies sell products at a lower price as compared to other retailers.  E-commerce analytics data from Edge by Ascential shows that there is faster growth in discount stores as compared to other retail environments. Discount stores are proactively keeping pace with their consumers’ needs and are adding more and new features as required. Discount stores such as Dollar General (NYSE:DG) have an expected growth of 5.2% annually through 2024. Shopping patterns for consumers are changing with a change in consumers’ mentality.  Consumers are now shopping with smaller baskets. Therefore, discount stores have had high profits in 2021. Hence, in 2022 there was a rise in discount stores. Discount stores have earnings of $469 billion worldwide in 2021 and have projected sales of $583 billion by 2026. Through 2026 discount stores are expected to grow at 4.4% compound annual growth rate (CAGR).

According to eMarketer, as the struggle to evade inflation increases consumers are spending more cautiously and real public expenditure decreased by 0.4% in the last two years. Therefore, discount retailers are capitalizing on price consciousness to increase their footprint. Major retailers like Walmart Inc. (NYSE:WMT) Costco (NASDAQ:COST) and Dollar General Corporation (NYSE:DG) are increasing their discount offerings to attract budget-conscious consumers.

Methodology

In this article, we have used research reports from credible sources like eMarketer, Fortune, and National Retail Federation to list the world’s 10 biggest discount store companies based on their market capitalization as of June 2022.

Biggest Discount Stores Companies in the World

10. Pepco Group N.V. (WSE:PCO.WA)

Market Cap – $4.24 Billion

Pepco Group N.V. (WSE:PCO.WA) is one of the fastest-growing European discount store companies in the world. They have around 3600 stores across Europe facilitating 50 million shoppers each month. The core shopper and target audience for Pepco Group N.V. (WSE:PCO.WA)  is “mum on a budget” with her regular shopping and needs under one roof. Pepco Group N.V. (WSE:PCO.WA)  provides a multi-category assortment being its differentiation key as compared to its competitors in the discount sector those focus on a single category. Revenue for Pepco Group N.V. (WSE:PCO.WA) for the half year ending in March 2022 was € 2,372 million with 17.2% year-on-year growth.

Pepco Group N.V. (WSE:PCO.WA) maintained their market position on prices by reducing the cost of business. At a time when there was a significant pressure on household budgets due to inflation Pepco Group N.V. (WSE: PCO.WA) was able to protect its customers from price rises on some of their products. Like Walmart Inc. (NYSE:WMT) Costco (NASDAQ:COST) and Dollar General Corporation (NYSE:DG) , Pepco is one of the favorite options for budget-conscious customers.

9. B&M European Value Retail SA (LSE:BME.L)

Market Cap – $4.63 Billion

B&M European Value Retail SA (LSE:BME.L) is UK’s leading discount store company providing its customers with best-selling items across general merchandise categories and grocery at value prices. They have adopted a low-cost approach by sourcing products directly from manufacturers and leading brands. B&M European Value Retail SA (LSE:BME.L) operates around 650 stores in the UK retail market. Strong cost control at B&M European Value Retail SA (LSE:BME.L) is also done by maintaining low head office costs through minimal staffing and IT. Moreover, B&M European Value Retail SA (LSE:BME.L) does not waste any money on marketing activities as 97% of the customers are there due to a friend’s recommendation or location.

For the first quarter of 2022, the company reported total revenue of $1.41 billion and a $639 million pretax profit for the year ended March 2022.

8. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ)

Market Cap – $8.491 Billion

BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) is one of the leading operators of membership warehouse clubs in the Eastern United States currently operating over 215 clubs in 17 states and ranks 8^th in the list of 10 biggest discount store companies in the world. People shop from places like BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) because they can bulk buy at a low price and stockpile supplies. They have high quality and private label merchandise at low prices. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ)’s membership increase 3% yearly and 15% in two years. During the Pandemic the quality of BJ’s memberships also improved adding “higher-tier” customers. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) digital sales went up by 244% on a two-year basis seeing their digital channel shine. BJ's Wholesale Club Holdings Inc.'s (NYSE:BJ) revenue for the year ending in April 2022 was $17.296 billion with an 11.58% year-on-year increase.

7. Pan Pacific International Holdings Corp. (TYO:7532)

Market Cap – $9.535 Billion

 Pan Pacific International Holdings Corp. (TYO:7532) is one of the biggest discount store companies in the world and has a chain of discount stores those provide retail miscellaneous household goods, electrical appliances, fashion merchandise, food, and watches. It operates 631 stores in Japan, Hawaii, California, the United States, Hong Kong, Thailand, and Singapore. Discount stores under Pan Pacific International Holdings Corp. (TYO:7532) are Don Quijote, Mega Don Quijote, New Mega Don Quijote, Don Quijote UNY, Mega Don Quijote UNY and Nagasakiya. Pan Pacific International Holdings Corp.’s (TYO:7532) revenue for the nine months ended in March 2022 increased by 8% to $10.7 billion and the net profit also increased by 2%.

6. Dollarama Inc. (TSE:DOL)

Market Cap – $21.816 Billion

Dollarama Inc. (TSE:DOL) is recognized as Canada’s discount retailer providing value to the customers with stores in around 1000 locations in small towns, mid-sized cities, and metropolitan areas. The company operates 1,421 discount stores as of January 2022 and operates through an online store as well. In June 2022, Dollarama Inc. (TSE:DOL) rolled out a new price point that stated that they will now stock goods under $1 to $5. Raising the price point to $5 has enabled Dollarama Inc. (TSE:DOL) to stock popular products that were removed previously due to rising costs and to maintain its position as one of the biggest discount stores in the world. Sales for Dollarama Inc. (TSE:DOL) increased by 7.6% to $43 billion from fiscal year 2021 to fiscal year 2022 whereas, comparable store sales also grew by 1.7%. This Canadian discount store has made it to the list of the 10 biggest discount store companies. Like Walmart Inc. (NYSE:WMT) Costco (NASDAQ:COST) and Dollar General Corporation (NYSE:DG), Dollarama is also seeing a huge influx of customers who want to shop in budget.

Click to continue reading and see 5 Biggest Discount Store Companies in the World.

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Disclosure. None. 15 Biggest Discount Store Companies in the World is originally published on Insider Monkey.

Polen Capital, an investment management firm, published its “Polen U.S. Small Company Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Over the first quarter, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned -21.98% gross and -22.18% net of fees, respectively, underperforming the Russell 2000 Growth Index’s (the “Index’) -12.63% return.   Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen U.S. Small Company Growth Fund mentioned Trupanion, Inc. (NYSE:TRUP) and explained its insights for the company. Founded in 1999, Trupanion, Inc. (NYSE:TRUP) is a Seattle, Washington-based pet insurance company with a $2.7 billion market capitalization. Trupanion, Inc. (NYSE:TRUP) delivered a -48.78% return since the beginning of the year, while its 12-month returns are down by -27.11%. The stock closed at $67.63 per share on June 03, 2022.

Here is what Polen U.S. Small Company Growth Fund has to say about Trupanion, Inc. (NYSE:TRUP) in its Q1 2022 investor letter:

"Trupanion reported solid results overall, but there were a couple of things that may have concerned investors. First, management mentioned that they are migrating away from providing revenue guidance and, instead, toward targeting subscription adjusted operating income. There was also some impact from COVID-19 in the fourth quarter from the Omicron variant, which may have stalled new pet additions. By the time the company reported, new pet additions had already rebounded. On the change in earnings guidance, a skeptic might point to rising pet acquisition costs impacting their ability to add new pets within their stated IRR range. This rise drive fewer net pet adds and lower revenue growth as the company remains disciplined around pet acquisitions. Based on our research, we feel comfortable for right now."

Our calculations show that Trupanion, Inc. (NYSE:TRUP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Trupanion, Inc. (NYSE:TRUP) was in 18 hedge fund portfolios at the end of the first quarter of 2022, compared to 20 funds in the previous quarter. Trupanion, Inc. (NYSE:TRUP) delivered a -17.78% return in the past 3 months.

In November 2021, we also shared another hedge fund’s views on Trupanion, Inc. (NYSE:TRUP) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen U.S. Small Company Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Over the first quarter, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned -21.98% gross and -22.18% net of fees, respectively, underperforming the Russell 2000 Growth Index’s (the “Index’) -12.63% return.   Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen U.S. Small Company Growth Fund mentioned Farfetch Limited (NYSE:FTCH) and explained its insights for the company. Founded in 2007, Farfetch Limited (NYSE:FTCH) is a London, United Kingdom-based luxury fashion industry with a $3.4 billion market capitalization. Farfetch Limited (NYSE:FTCH) delivered a -73.14% return since the beginning of the year, while its 12-month returns are down by -81.10%. The stock closed at $8.98 per share on June 03, 2022.

Here is what Polen U.S. Small Company Growth Fund has to say about Farfetch Limited (NYSE:FTCH) in its Q1 2022 investor letter:

"We also initiated a position in global luxury fashion e-commerce marketplace Farfetch in the first quarter and took advantage of meaningful weakness in the company's share price during the period. Farfetch previously had too large a market cap for the Portfolio, but it has since moved to a level where it’s appropriate to own it – both in this Portfolio and in our smid-cap strategy. The company’s fundamentals remain attractive as indicated by the compelling results Farfetch reported in February.

The company remains an early mover with "the world's only truly global marketplace for luxury at scale". Farfetch has broader reach around the world with a diversity of brands that is much larger than its competitors. Many of the items it sells are exclusive. Our research shows that its brand assortment, brand image, geographic breadth, an inventory-light business model, a more compelling offering for luxury partners, and artificial intelligence are all competitive edges for the company. We believe Farfetch is well-positioned for the continued market share shift from offline to online in this category. The personal luxury goods market has trailed other categories in online penetration, but consumer behaviors and preferences shifted as a result of the pandemic creating more comfort with purchasing goods like this online. Changed behavior and the general shift to a higher portion of Millennial and Gen Z luxury shoppers supports this continued shift as does the growth in emerging market demand."

Our calculations show that Farfetch Limited (NYSE:FTCH) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Farfetch Limited (NYSE:FTCH) was in 45 hedge fund portfolios at the end of the first quarter of 2022, compared to 47 funds in the previous quarter. Farfetch Limited (NYSE:FTCH) delivered a -27.87% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on Farfetch Limited (NYSE:FTCH) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen U.S. Small Company Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Over the first quarter, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned -21.98% gross and -22.18% net of fees, respectively, underperforming the Russell 2000 Growth Index’s (the “Index’) -12.63% return.   Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen U.S. Small Company Growth Fund mentioned Hamilton Lane Incorporated (NASDAQ:HLNE) and explained its insights for the company. Founded in 1991, Hamilton Lane Incorporated (NASDAQ:HLNE) is a Conshohocken, Pennsylvania-based capital market company with a $3.7 billion market capitalization. Hamilton Lane Incorporated (NASDAQ:HLNE) delivered a -32.07% return since the beginning of the year, while its 12-month returns are down by -21.25%. The stock closed at $70.39 per share on June 06, 2022.

Here is what Polen U.S. Small Company Growth Fund has to say about Hamilton Lane Incorporated (NASDAQ:HLNE) in its Q1 2022 investor letter:

"New holding Hamilton Lane is a leading private markets investment management firm providing innovative solutions to institutional and private wealth investors around the world. The company has an early mover advantage in the space having been dedicated exclusively to private markets investing for 30 years. The company has a robust offering that gives clients access to the full spectrum of private markets strategies, sectors and geographies, as well as ancillary administration services. We believe the company has stable underlying business fundamentals that are driven by the nature of cash flows into private assets, the company’s high returns on capital, and its talented management team and culture. We also believe Hamilton Lane has the unique ability to leverage existing assets and competitive strengths to access new categories and benefit from secular trends toward higher private-market allocations, and to capitalize on significant long-term opportunities."

Our calculations show that Hamilton Lane Incorporated (NASDAQ:HLNE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Hamilton Lane Incorporated (NASDAQ:HLNE) was in 14 hedge fund portfolios at the end of the first quarter of 2022, compared to 16 funds in the previous quarter. Hamilton Lane Incorporated (NASDAQ:HLNE) delivered a -3.39% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen U.S. Small Company Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Over the first quarter, the Polen U.S. Small Company Growth Composite Portfolio (the “Portfolio”) returned -21.98% gross and -22.18% net of fees, respectively, underperforming the Russell 2000 Growth Index’s (the “Index’) -12.63% return.   Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen U.S. Small Company Growth Fund mentioned Medpace Holdings, Inc. (NASDAQ:MEDP) and explained its insights for the company. Founded in 1992, Medpace Holdings, Inc. (NASDAQ:MEDP) is a Cincinnati, Ohio-based clinical contract research organization with a $4.7 billion market capitalization. Medpace Holdings, Inc. (NASDAQ:MEDP) delivered a -32.40% return since the beginning of the year, while its 12-month returns are down by -13.90%. The stock closed at $147.12 per share on June 03, 2022.

Here is what Polen U.S. Small Company Growth Fund has to say about Medpace Holdings, Inc. (NASDAQ:MEDP) in its Q1 2022 investor letter:

"We sold the Portfolio’s position in Medpace due to the potentially challenging biotech funding environment and because the company faces wage inflation that could jeopardize the profitability of its existing contracted business. Combined with a less compelling return potential relative to other Portfolio holdings, based on our research, the sale of Medpace provided us with a good source of funds to apply to what we believed to be more attractive investment opportunities."

Our calculations show that Medpace Holdings, Inc. (NASDAQ:MEDP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Medpace Holdings, Inc. (NASDAQ:MEDP) was in 25 hedge fund portfolios at the end of the first quarter of 2022, compared to 26 funds in the previous quarter. Medpace Holdings, Inc. (NASDAQ:MEDP) delivered a -0.98% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Medpace Holdings, Inc. (NASDAQ:MEDP) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen Global Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Global Growth Composite Portfolio (the “Portfolio) was down -13.30% and -13.54%, gross and net of fees, versus a decline of -5.35% for the MSCI ACWI (the “Index”).  Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen Global Growth Fund mentioned Amazon.com, Inc. (NASDAQ:AMZN) and explained its insights for the company. Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle, Washington-based multinational technology company with a $1.2 trillion market capitalization. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -26.22% return since the beginning of the year, while its 12-month returns are down by -25.03%. The stock closed at $123.00 per share on June 07, 2022.

Here is what Polen Global Growth Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:

"Amazon has done a terrific job managing through the pandemic, in our view. Many companies struggled to pivot their business model during COVID-19, which represented an existential threat. Amazon had the opposite problem – a surge in demand. The company leaned into this by entering an extremely heavy investment cycle, doubling its fulfillment network and headcount over the past two years. To put this into context, Amazon added 273,000 employees in the last half of 2021 on top of over 400,000 employees the prior year. The company has also made significant Capital Expenditures, adding IT infrastructure for AWS and transportation capacity during this period. This all took place in the face of inflation related to wage increases and higher pricing from third-party carriers supporting the company’s fulfillment network. These heavy investments paid off—AWS grew 40% year over year, reached a $71B annual run rate, and total company revenue posted a two-year annual compounded growth rate of 25%. We believe this heavy investment cycle, like Amazon’s previous ones, will continue to support ongoing growth and will further separate Amazon from its competition while also providing the ability to increase margins through economies of scale. With respect to the margins specifically, AWS and Advertising – two fast-growing businesses – continue to contribute greater operating earnings to the overall business. We believe management has done an excellent job managing through this period and that the company is even stronger today than when COVID-19 first began to spread around the world."

Our calculations show that Amazon.com, Inc. (NASDAQ:AMZN) tops our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 271 hedge fund portfolios at the end of the first quarter of 2022, compared to 279 funds in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -11.69% return in the past 3 months.

In May 2022, we published an article that includes Amazon.com, Inc. (NASDAQ:AMZN) in Jim Simons’ Portfolio in 2022: Top 10 Stock Picks. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen Global Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Global Growth Composite Portfolio (the “Portfolio) was down -13.30% and -13.54%, gross and net of fees, versus a decline of -5.35% for the MSCI ACWI (the “Index”).  Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen Global Growth Fund mentioned Microsoft Corporation (NASDAQ:MSFT) and explained its insights for the company. Founded in 1975, Microsoft Corporation (NASDAQ:MSFT) is an Albuquerque, New Mexico-based technology company with a $2.03 trillion market capitalization. Microsoft Corporation (NASDAQ:MSFT) delivered a -18.98% return since the beginning of the year, while its 12-month returns are up by 7.46%. The stock closed at $272.50 per share on June 07, 2022.

Here is what Polen Global Growth Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2022 investor letter:

"Microsoft's business is firing on all cylinders and continue to enjoy an acceleration in their respective fundamentals because of the increase in digitization around the world. Nearly every company today is searching for ways to become more digital, and both Microsoft and Accenture are positioned to provide many of the solutions these companies seek. This inflection in fundamentals was not lost on the market, and each business’s stock performed exceptionally well in 2021. In fact, they represented two of the three top absolute performers for the Global Growth Portfolio last year. As a result, their respective stocks are currently more fully priced. As such, we lowered Microsoft from our largest position within the Portfolio. We maintain high conviction in Microsoft and plan to own it for many years, but recognize the increase in its prices."

Our calculations show that Microsoft Corporation (NASDAQ:MSFT) ranks 2nd it on our list of the 30 Most Popular Stocks Among Hedge Funds. Microsoft Corporation (NASDAQ:MSFT) was in 259 hedge fund portfolios at the end of the first quarter of 2022, compared to 262 funds in the previous quarter. Microsoft Corporation (NASDAQ:MSFT) delivered a -5.55% return in the past 3 months.

Earlier this month, we published an article that includes Microsoft Corporation (NASDAQ:MSFT) in the 10 Undervalued Blue Chip Stocks to Buy Now. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen Global Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Global Growth Composite Portfolio (the “Portfolio) was down -13.30% and -13.54%, gross and net of fees, versus a decline of -5.35% for the MSCI ACWI (the “Index”).  Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen Global Growth Fund mentioned Netflix, Inc. (NASDAQ:NFLX) and explained its insights for the company. Founded in 1997, Netflix, Inc. (NASDAQ:NFLX) is a Los Gatos, California-based subscription streaming service and production company with an $88.2 billion market capitalization. Netflix, Inc. (NASDAQ:NFLX) delivered a -67.03% return since the beginning of the year, while its 12-month returns are down by -59.12%. The stock closed at $198.61 per share on June 07, 2022.

Here is what Polen Global Growth Fund has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q1 2022 investor letter:

"We have been following Netflix closely for many years. It is a dominant, globally scaled business enjoying – and in large part driving – the secular shift to streaming content. The two things that previously kept us on the sidelines were negative free cash flow (FCF) and valuation. Both have changed. FCF is now positive, and valuation is now at an attractive level. Streaming entertainment, which is on-demand, personalized, and available on any screen, is now often the preferred choice over linear TV. As such, Netflix, the leader in on-demand streaming, should continue enjoying margin expansion due to economies of scale. With respect to the “streaming wars,” we do believe content spend will be leveraged over time and that the industry will experience consolidation."

Our calculations show that Netflix, Inc. (NASDAQ:NFLX) ranks 13th on our list of the 30 Most Popular Stocks Among Hedge Funds. Netflix, Inc. (NASDAQ:NFLX) was in 109 hedge fund portfolios at the end of the first quarter of 2022, compared to 113 funds in the previous quarter. Netflix, Inc. (NASDAQ:NFLX) delivered a -44.64% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on Netflix, Inc. (NASDAQ:NFLX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen Global Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Global Growth Composite Portfolio (the “Portfolio) was down -13.30% and -13.54%, gross and net of fees, versus a decline of -5.35% for the MSCI ACWI (the “Index”).  Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen Global Growth Fund mentioned Align Technology, Inc. (NASDAQ:ALGN) and explained its insights for the company. Founded in 1997, Align Technology, Inc. (NASDAQ:ALGN) is a San Jose, California-based orthodontics company with a $21.5 billion market capitalization. Align Technology, Inc. (NASDAQ:ALGN) delivered a -58.38% return since the beginning of the year, while its 12-month returns are down by -53.29%. The stock closed at $273.51 per share on June 07, 2022.

Here is what Polen Global Growth Fund has to say about Align Technology, Inc. (NASDAQ:ALGN) in its Q1 2022 investor letter:

"Align Technology continues to de-risk as it grows and is exhibiting increasing returns to scale. The business prints over 800,000 unique clear aligners per day, and competitors are realizing how difficult it is to compete with this globally scaled, well-led company that enjoys the leading brand and product in the market. We applaud management’s stewardship of the business thus far and believe there is a very long period of compounding ahead of it. Despite robust fundamentals, the company was swept up in the sell-off that occurred during the quarter, and we took advantage of the favorable valuation by raising it to an average position size within the portfolio.

With respect to Align, share price performance seemed to be related to a deceleration in case shipments, which was mostly due to the Omicron variant and a tough year-over-year comparison to a 37% growth rate. That said, Align’s systems and services segment revenues grew 61% this past quarter on top of 25% growth during the same period in 2021 and half of the scanner sales were to new offices, which has historically been a great leading indicator for increased clear aligner sales. CEO Joe Hogan has been frequently asked whether the deceleration was due to his company pulling forward demand during the pandemic. Each time he has replied that the deceleration was due to the Omicron variant causing practice closures and staff shortages."

Our calculations show that Align Technology, Inc. (NASDAQ:ALGN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Align Technology, Inc. (NASDAQ:ALGN) was in 45 hedge fund portfolios at the end of the first quarter of 2022, compared to 51 funds in the previous quarter. Align Technology, Inc. (NASDAQ:ALGN) delivered a -38.13% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Align Technology, Inc. (NASDAQ:ALGN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.

Polen Capital, an investment management firm, published its “Polen Global Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Global Growth Composite Portfolio (the “Portfolio) was down -13.30% and -13.54%, gross and net of fees, versus a decline of -5.35% for the MSCI ACWI (the “Index”).  Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen Global Growth Fund mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) and explained its insights for the company. Founded in 1998, PayPal Holdings, Inc. (NASDAQ:PYPL) is a San Jose, California-based multinational financial technology company with a $102.5 billion market capitalization. PayPal Holdings, Inc. (NASDAQ:PYPL) delivered a -53.02% return since the beginning of the year, while its 12-month returns are down by -66.39%. The stock closed at $88.59 per share on June 07, 2022.

Here is what Polen Global Growth Fund has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2022 investor letter:

"After reporting third-quarter 2021 results, we spoke to PayPal’s CFO to discuss the guidance changes, the strategy going forward, and the rumors surrounding the Pinterest deal. It was a constructive conversation that increased our confidence in management’s direction for the business and in its ability to exploit its competitive advantages within the exciting area of digital payments. We increased our position size at the time, bringing it to an average weight. Our confidence in management declined, however, following their fourth-quarter results, which included a change in business strategy, disappointing 2022 guidance, and the removal of significant elements of their long- term guidance provided less than a year earlier and seemingly confirmed throughout 2021. Ultimately, we decided to exit our position completely based on these factors. While we think the backdrop for payments—specifically digital and mobile payments—is attractive and would have expected the tailwinds from COVID-19 to play very much to PayPal’s favor, management has been less successful than we would have expected. In short, we think execution has been poor, and we have lost confidence in management."

Our calculations show that PayPal Holdings, Inc. (NASDAQ:PYPL) ranks 18th on our list of the 30 Most Popular Stocks Among Hedge Funds. PayPal Holdings, Inc. (NASDAQ:PYPL) was in 100 hedge fund portfolios at the end of the first quarter of 2022, compared to 110 funds in the previous quarter. PayPal Holdings, Inc. (NASDAQ:PYPL) delivered a -11.60% return in the past 3 months.

In May 2022, we also shared another hedge fund’s views on PayPal Holdings, Inc. (NASDAQ:PYPL) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.