Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -9.91% (net) compared to a -6.84% return for the Russell 2500 Growth Index. The firm’s investment process prioritizes the management of risk over the opportunity for a return. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Meridian Growth Fund highlighted stocks like CarGurus, Inc. (NASDAQ:CARG) in the Q3 2023 investor letter. Headquartered in Cambridge, Massachusetts, CarGurus, Inc. (NASDAQ:CARG) is an online automotive marketplace. On December 5, 2023, CarGurus, Inc. (NASDAQ:CARG) stock closed at $21.30 per share. One-month return of CarGurus, Inc. (NASDAQ:CARG) was 11.17%, and its shares gained 78.54% of their value over the last 52 weeks. CarGurus, Inc. (NASDAQ:CARG) has a market capitalization of $2.451 billion.
Meridian Growth Fund made the following comment about CarGurus, Inc. (NASDAQ:CARG) in its Q3 2023 investor letter:
“CarGurus, Inc. (NASDAQ:CARG) is at the forefront of the online automobile sales industry, operating a web-based retail marketplace and holding a 51% stake in CarOffer, an online wholesale auction company. The retail marketplace business is unique in that it presents buyers with an unbiased list of available vehicles ranked on their value—a combination of the price and quality of the vehicle. Meanwhile, dealers are drawn to CarGurus’s attractive pricing, high traffic, and extensive suite of ancillary services. The stock declined during the quarter when management unexpectedly delayed its earnings announcement. Ultimately, the delay appeared to have caused unnecessary concern. Earnings were announced just a few days late and came in stronger than expected. We were pleased by the accelerating growth within its marketplace unit and higher-than-expected profitability. While guidance was positive overall, the market reacted negatively to cautious commentary. Management cited a decline in used car prices and caution from dealers as they rebuild inventory during an uncertain macro environment. Also contributing to management’s conservatism are rental car companies, a key participant in the wholesale auction segment, that will likely be less active during the remainder of the year. Despite these invisible short-term headwinds, our view of the company’s long-term profitability potential has not changed. Limited profitability in the CarOffer business may be a blessing in disguise: CarGurus will likely be able to purchase the 49% of the company it does not own at a favorable price during 2024. During the quarter, we maintained our position in the company.”
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CarGurus, Inc. (NASDAQ:CARG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held CarGurus, Inc. (NASDAQ:CARG) at the end of third quarter which was 21 in the previous quarter.
We discussed CarGurus, Inc. (NASDAQ:CARG) in another article and shared the list of most undervalued auto stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
