One Stock That Top Managers Like

Each quarter, we take a look at the recent transactions of some of the top money managers around today--who we call our Ultimate Stock-Pickers.

Last quarter, one stock in particular was a popular new-money buy among the group. What are new-money buys? Stocks that managers purchased that weren't in their portfolios the prior quarter.

IAC/InterActiveCorp IAC topped the new-money purchase list with three funds buying into the firm despite not holding any positions in the company last quarter.

After spinning off Match Group in 2020 and Vimeo in 2021, we think IAC/InterActiveCorp is again well on its way to generating attractive returns from Angi, a market leader in matching reputable home-service professionals with consumers. IAC has invested in areas within this segment that have resulted in basically a feedback loop: attracting more service professionals who have helped bring in more consumers who in turn have attracted more service professionals, and so on, thereby strengthening Angi's network effect. According to various studies, the home-services market in the U.S. is valued at nearly $400 billion, of which more than 90% of transactions are initiated offline. We think Angi, the online market leader, has 3% to 5% of this market, an indication of attractive growth opportunities for the segment.

This Internet media company's portfolio also consists of Dotdash and search segments. Continuing growth and higher demand for contextual campaigns in digital advertising will increase ad revenue for these segments. The firm's emerging and other segment includes Care.com, which provides online services for finding and managing family care and matching employers and job seekers; staff management Bluecrew; temp healthcare staffing service NurseFly; The Daily Beast online publication; and film production service provided by IAC Films.

IAC strengthened its balance sheet after spinning off Match, which we think will allow the firm to acquire more fast-growing online marketplace businesses.

Morningstar doesn't think IAC has carved out an economic moat yet. We think shares are worth $111 apiece.

Senior analyst Ali Mogharabi, associate analyst Malik Ahmed Khan, and analyst Eric Compton provided the research behind this segment.