By: Manisha Sethi Jun. 14, 2018

On May 15, Whale Rock Capital Management LLC reported its SEC 13F filings for Q1 2018. The reported value of its portfolio is $2,943.29 million, with the top 10 holdings accounting for 54.7%. Of the top holdings, Amazon.com (AMZN) and Netflix (NFLX) account for 8.32% and 6.19% of the portfolio, respectively. Technology occupies the largest chunk of the investor’s portfolio, with an 86.72% share. Whale Rock Capital Management LLC was founded in 2006 and is based out of Boston, Massachusetts. Alex Sacerdote is the founder and portfolio manager of the firm, which primarily provides services to pooled investment vehicles. It invests in public equity markets and typically employs long/short equity to make its investments. It generally invests in the technology, media, and telecommunication sectors. The firm uses fundamental analysis to make its investments.

According to Raltin’s analysis, around 55.21% or 53 new buys of Whale Rock Capital Management outperform the S&P 500. Of these, 45 new stock buys (between Q1 2014 & Q1 2018) outperform the S&P 500 by more than 10%, whereas 37 of 96 new buys underperform the index by more than 10%. Raltin’s detailed methodology for calculating performance against the S&P 500 is given here. The table given below shows the total number of new stock purchases and the various categories of performance against the S&P 500.

S&P outperformance categoryNumber of new stock purchasesTotal new purchases (%)
>20%3637.5
10–20%99.38
0–10%88.33
-10 to 0%66.25
-20 to -10%1515.36
<-20%2222.92
Total stocks96
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In Q1 2018, this SEC-registered investment advisor bought 9 new stocks from the finance, IT, and communications space. Square Inc. (SQ) and Splunk Inc. (SPLK) form 5.64% and 4.42% of the portfolio, respectively. The table given below shows the new purchases as well as the number of shares and holding values.

StocksNumber of sharesHolding value ($1,000)
Square, Inc. (SQ)3,675,156180,818
Splunk Inc. (SPLK)1,442,680141,945
Proofpoint, Inc. (PFPT)1,084,957123,305
Coupa Software Incorporated (COUP)1,941,07688,552
Match Group, Inc. (MTCH)1,916,23985,158
Alteryx, Inc. (AYX)1,187,39140,538
Red Hat, Inc. (RHT)382,39657,172
Mimecast Limited (MIME)823,35429,171
MongoDB Inc. (MDB)556,86224,168

The following table shows the value of the investor’s portfolio for 5 quarters from Q1 2017 to Q1 2016 and the top holdings in each quarter that outperformed the S&P 500 IRR. Several new picks by the fund, like Instructure, Inc. (INST), Netflix, Inc. (NFLX), and Applied Optoelectronics, Inc. (AAOI) considerably outperformed the S&P 500.

PeriodTotal portfolio value ($Mn)Top holdings (ticker, % of IRR difference from S&P 500)
Q1 20171,838.93Instructure, Inc. (INST; 68.76), MercadoLibre, Inc. (MELI; 57.11),
Q4 20161,238.68Netflix, Inc. (NFLX; 35.8), Pegasystems, Inc. (PEGA; 11.63)
Q3 20161,549.99Applied Optoelectronics, Inc. (AAOI; 175.83), Trade Desk, Inc. (TTD; 94.81), Apple, Inc. (AAPL; 20.25)
Q2 20161,203.39PTC Inc. (PTC; 31.25), Symantec Corp. (SYMC; 22.11),
Q1 20161,075.34Cirrus Logic, Inc. (CRUS; 51.98), HubSpot, Inc. (HUBS; 24.11), Proofpoint, Inc. (PFPT; 23.56)