Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” April 2024 investor letter. A copy of the letter can be downloaded here. April was a busy month as many of the companies in the portfolio reported earnings. The Fund returned -4.3% net of fees and expenses for the month compared to -2.8% for its benchmark. Since its inception in December 2017, the Fund has returned 152.8% compared to 96.0% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). As of the end of April, the Fund’s largest sector allocations were to consumer discretionary (19.3%), information technology (22.6%), and communication services (27.0%). In addition, please check the fund’s top five holdings to know its best picks in 2024.
Lakehouse Global Growth Fund highlighted stocks like Adyen N.V. (OTC:ADYEY) in the April 2024 investor letter. Adyen N.V. (OTC:ADYEY) is a payment platform operator. Adyen N.V. (OTC:ADYEY) one-month return was -2.10%, and its shares lost 24.31% of their value over the last 52 weeks. On June 3, 2024, Adyen N.V. (OTC:ADYEY) stock closed at $12.82 per share with a market capitalization of $39.841 billion.
Lakehouse Global Growth Fund stated the following regarding Adyen N.V. (OTC:ADYEY) in its April 2024 investor letter:
“The largest detractor was Adyen N.V. (OTC:ADYEY) (-28.3%), which sold-off following its recent business update – more on that later. Amsterdam-based enterprise payments processor, Adyen, posted a quarterly update that was largely (at least in our opinion) business as usual. The company reported processed payment volume and net revenue growth of 46% and 21%, respectively. During the period, over 80% of the volume growth was derived from existing clients and volume churn was less than 1%. The pace of hiring has also slowed significantly to 26 net-new joiners in the quarter compared to 313 in the second half of 2023, which bodes well for margins moving forward. That said, Adyen shares sold off post the result as the market focused on the lower incremental take rates, a factor of having processed volumes relatively higher than net revenue growth.
Management attributed the lower incremental take-rates to client mix, where the company experienced higher volume growth from larger merchants with lower rates, and not from any structural change in terms of how pricing is determined. In addition, management emphasised that the focus is to increase net revenue growth, not take rates. As the company has a relatively fixed cost base, every dollar added to net revenue improves the company’s profit margins. With a longer-term view, the company’s ability to gain wallet share and retain existing clients, coupled with a more normalised cost base, bodes well for future profitability and we remain patient holders.”
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Adyen N.V. (OTC:ADYEY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held Adyen N.V. (OTC:ADYEY) at the end of the first quarter which was 2 in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of Adyen as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
