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Top 10.

 

Data as at 31 Aug 2019

 

The Top 10 holdings in the Blue Whale Growth fund make up approximately 50% of the total value of the fund.

In picking our Top 10, we employ what we internally call ‘The Beautiful Companies Concept’. That is picking those companies which fulfil several important criteria that we believe makes them ‘beautiful’. They represent our highest conviction picks within the portfolio and offer, we believe, a significant upside to the current share price.

Here we take a look at each of our Top 10 holdings and explain why they feature in top positions within our portfolio. 

Please note that the Top 10 is provided for information only and the views we express on holdings do not constitute Investment Recommendations and must not be viewed as such.

 

Leaders in their field

 

You may notice that there are no competing companies in our top 10. Indeed, there are no companies that directly compete against each other across our entire portfolio.

The reason for this is because we believe in investing only in the best. Where we have chosen to invest in a company, it is because not only do we believe it to be a great company, but because it represents the best company competing in its respective field.

 

Company

Sector

In Portfolio Since

Company Size

Media

Sep-17

£114bn  

  • Adobe has more than 50% of the digital content creation software market. Whenever you view an image, video, website, magazine, or even an app, there is a good chance it was created using its software. We believe Adobe will be a major beneficiary of continued explosive growth in this market, as ever-richer digital content is consumed across devices. Meanwhile, Adobe’s pioneering transition to a subscription model is unlocking international growth opportunities and helping to combat software piracy. 

  • Industrials

    Mar-18

    £26bn  

  • AutoCAD, Revit and Inventor are industry-standard computer aided design (CAD) tools made by Autodesk that are deeply embedded in the construction and manufacturing industries.

    We’re optimistic about Autodesk for a number of reasons: Autodesk is helping to drive a long-overdue ‘digitisation’ of the construction industry with paper drawings and post-it notes being replaced by digital models and iPads. A subscription transition in the vein of Adobe and Microsoft should bring Autodesk closer to its customers, provide more predictable cash flows, help to combat software piracy, and allow delivery of continuous innovation to customers. On the final point we are excited about advances that Autodesk is making in areas like web-based CAD, Generative Design and software tools for 3D Printing.

  • Technology

    Feb-18

    £62bn  

  • Intuit is the company behind both QuickBooks, the leading accounting software for small business globally and TurboTax, the leading tax-filing software for individuals in the US. This niche focus and an excellent management team that embraces ‘self-disruption’ have helped Intuit to thrive across various technology era’s (DOS, Windows, Web and Mobile) since its founding in the 1980s.

    While accounting and tax may sound ‘boring’, Intuit enjoys myriad growth opportunities. The majority of small businesses still don’t use any accounting software and the majority of US citizens still pay professionals to help file their taxes. Technology is helping to change both. For example, QuickBooks Online, the web and mobile based version, allows receipts and invoices to be captured in seconds using a smartphone camera and automatically matched to bank statements. QuickBooks Online has grown their subscribers from 700k to 3.4m in just 3 years – impressive, yet still only a fraction of the hundreds of millions of small businesses globally that Intuit targets.

  • Financials

    Oct-17

    £235bn  

  • Mastercard is a high quality business benefiting from the structural shift of payments away from cash to mobile, online and contactless transactions. At its core, Mastercard runs BankNet, a global payment network connecting major banks for verifying and processing card payments. Mastercard is able to process hundreds of millions of transactions per day due to its superior technology. Looking ahead, Mastercard is seeking to build on its successes in consumer payments to business-to-business transactions (much of which is still made manually by cash or cheque) and we are confident in their ability to navigate and execute on this multi-decade opportunity.

  • Technology

    Sep-17

    £866bn  

  • Microsoft’s products; Windows, Office, server operating systems and developer tools, are part of the foundation of almost every enterprise. But history is littered with examples of companies in such enviable positions that abuse their power over customers and fail to adapt to a changing world.  We believe Microsoft is a rare exception. 

    Since taking over as CEO in 2014, Satya Nadella has reinvigorated Microsoft by pursing a more ‘open’ strategy (Office 365 works on Apple iPhones - unthinkable previously), overhauling internal culture to attract the best talent and focusing attention firmly on the future of technology (Microsoft is one of the top contributors to open source software and artificial intelligence research). 

  • Financials

    Sep-17

    £106bn  

  • PayPal is a high quality business benefiting from structural growth in digital payments. At its core is a global two-sided payment network operating at scale, storing payment details for consumers while processing online transactions for businesses. PayPal’s scale comes from its first mover advantage at the dawn of the consumer internet. Network effects and superior technology helped PayPal grow users in the tens of millions to more than 250 million in 2018. More recently, PayPal has been extending its lead over competitors through commercial partnerships spanning financial institutions (Barclays, HSBC, Amex) as well as tech giants (Facebook, Google).

    PayPal’s ability to keep growing its lead – commercially and technologically – gives us confidence that the business is likely to perform well in the long run.

  • Technology

    Mar-18

    £113bn  

  • Salesforce is one of the great success stories in enterprise software having pioneered the software-as-a-service model in the early 2000s. Their Customer Relationship Management software helps companies to manage customer information, deliver great customer service, market their products and services and sell online. 

    Salesforce growth is being driven by what visionary CEO Marc Benioff calls the ‘4th industrial revolution’; technology bringing companies close to their customers.  A statistic we love is that two years ago Salesforce had 24 ‘mega customers’ paying more than $20m annually (not bad!), but just one year later that number had risen to 40. This reflects the incredible traction that Salesforce is gaining as the trusted partner that large companies desperately need to thrive in the 4th industrial revolution. 

  • Healthcare

    Aug-18

    £17bn  

  • Smith & Nephew is in the midst of a turnaround following the appointment of its new and highly regarded CEO, Namal Nawana. Nawana was only appointed CEO in May 2018 but he has already made impressive progress in transforming Smith & Nephew’s culture, organisational structure and strategy.  These changes should ultimately result in improved organic growth, operating profit margin expansion, improved returns from acquisitions and fundamentally a higher performing organisation. 

    While the market remains sceptical of this turnaround given Smith & Nephew’s historically lacklustre performance we see significant potential for the company to grow and cement its position as a leading global medical device company.

  • Healthcare

    Jun-18

    £19bn  

  • Veeva develops software specifically for the life-sciences industry and was founded in 2007. A relentless focus on innovation and delighting its customers led Veeva to become the largest software vendor to the life-sciences industry just 10 years later. It’s no coincidence to us that Founder and CEO Peter Gassner cut his teeth at Salesforce.  

    Veeva has gained c70% market share in pharmaceutical CRM software.  We are optimistic about significant growth in the future as Veeva leverages its customer relationships, technology platform (Veeva Vault) and aforementioned focus on innovation and customer surplus into many other niches within the life-sciences industry. And there are many; from the software used to manage vast amounts of data generated by clinical trials, to the software for a global pharmaceutical company to manage compliance with myriad regulations in the 100s of countries in which it operates. Longer term, Veeva also has its sights on other industries that share some similar characteristics such as chemicals and cosmetics. 

  • Travel & Leisure

    Jun-18

    £4bn  

  • Wyndham Hotels is one of the largest hotel franchisors in the world with number one positions in the economy and midscale segments. Following its recent spinoff Wyndham has a great opportunity to generate consistent revenue growth as it expands outside the US and benefits from continued growth in global travel spend.  Moreover, the highly experienced management team is continuing to generate value as they grow their recurring revenue and deliver the benefits from the recently acquired La Quinta brand. 

    As a result, we believe that the market underappreciates the quality of Wyndham’s business and its potential growth prospects thus making Wyndham a compelling investment.

  • *Please note that the sectors stated are Blue Whale's proprietary classifications which may differ from the Global Industry Classification Standard (GICS) referred to on the Factsheet.

     

     

     

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