If you do an internet search for “Melinda French Gates Foundation stock picks,” you won’t find anything besides results about the Bill & Melinda Gates Foundation Trust.
That’s likely to change in the months ahead.
A couple of weeks ago, Melinda French Gates announced that she was leaving the foundation she and her now ex-husband started in 2000. Now that they’ve gone their separate ways, the foundation will be known as the Gates Foundation.
“Ms. French Gates will get $12.5 billion in resources to direct toward her philanthropic work. In a statement, she said she would use the money she was leaving with to ‘commit to my work on behalf of women and families,’” the New York Times reported.
That’s a good amount to invest to generate future income for her yet-unnamed foundation or philanthropic entity. However, she does have Pivotal Ventures in Kirkland, Washington, a limited liability company “that can make grants to nonprofits as well as for-profit investments and engage in advocacy work,” the Times reported.
One of Pivotal’s main focuses is investing in funds run by women.
Assuming a Melinda French Gates Foundation comes to fruition, here are three publicly traded entrepreneurial companies run or started by women that might be attractive to such a foundation.
BlackLine (BL)
BlackLine (NASDAQ:BL) is the largest of the three companies on my list with a market capitalization of $3.2 billion.
The company was founded in 2001 by Therese Tucker, who remains co-CEO and one of its largest shareholders, with 7.73% of Blackline’s shares. Tucker took the company public in October 2016, selling 8.6 million shares at $17.
“We have created a comprehensive cloud-based software platform designed to transform and modernize accounting and finance operations for organizations of all types and sizes. Our secure, scalable platform supports critical accounting processes such as the financial close, account reconciliation, intercompany accounting and controls assurance,” stated its IPO prospectus.
When it went public in 2016, it had over 1,500 customers in 120 countries, and over 147,000 finance professionals used its software. Today, it has approximately 4,411 customers with 387,050 individual users, a 163% increase over eight years.
The stock could use some love from the analysts. Of the 15 covering it, only three rate it a “buy,” with a target price that’s 22% higher than its current price.
In 2024, it expects revenues of $645.5 million and a net income of $163 million. It will continue to deliver profitable growth.
Figs (FIGS)
Figs (NYSE:FIGS) is the second-largest company on my list, with a market cap of $882 million.
“FIGS, Inc. is a founder-led, direct-to-consumer healthcare apparel and lifestyle brand that seeks to celebrate, empower and serve current and future generations of healthcare professionals,” states the company’s investor relations page.
The company was founded by two women, Heather Hasson, its executive chair, and Catherine Spear, its CEO, in 2013. They noticed that 85% of healthcare workers were responsible for buying their scrubs. The worst part was that traditional retailers sold them in locations far from the hospitals where the healthcare workers plied their trade.
“FIGS took the strategies of direct-to-consumer e-commerce brands and applied them to medical apparel, selling $48 uniform pants and $38 shirts. Now, the company says it has ‘de-commoditized a previously commoditized product,’ Fortune wrote in May 2021 when it went public.
In 2023, it generated $546 million in revenue (doubled from 2020), $85 million in free cash flow, and a healthy 15.6% margin.
Although the stock has lost 76% of its value since going public at $22, it continues to generate double-digit revenue growth. It’s a diamond in the rough.
Urban One (UONE)
Urban One (NASDAQ:UONE) is the smallest of the three companies, with a market cap of $83 million. It’s also the oldest, founded in 1980 by Cathy Hughes. Hughes served as the company’s CEO until 1997 when she became the chairperson of the board. She controls nearly 23% of the votes.
The company is a radio broadcaster targeting Black listeners. It does this through 55 FM or AM stations, nine HD stations, and two low-power television stations.
While the business is vital to American culture, it struggles to keep its head above water. On April 12, the company reported receiving a letter from Nasdaq stating that it didn’t comply with the stock exchange’s rules. Specifically, it hadn’t filed its 10-K promptly.
To stay onside with the exchange, Urban One must submit a plan to regain compliance by June 7. If Nasdaq approves, it will have until Sept. 11 to do so.
The company notified investors on May 10 that the delay was caused by “material weaknesses in the Company’s internal control over financial reporting.” It is working to solve these weaknesses and file the 10-K.
The latest 10-Q to be relied upon is Q3 2023. The 10-Q says it had revenue of $357.3 million in the nine months ended Sept. 30, with an operating loss of $38.3 million. The loss is due to the impairment of its radio broadcasting licenses in 10 markets. Without the $124 million in non-cash impairment charges, it would have had an operating profit of $86 million through Q3.
It could use a risk-tolerant investor like Melinda French Gates.
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On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
