Optimist Fund, an investment management company, released its fourth quarter investor letter. A copy of the letter can be downloaded here. 2024 proved to be another impressive year for the fund, with a return of around 67%. Since the fund’s inception, it has achieved approximately 15% annualized returns, net of fees, and the firm is nearing its 3-year anniversary. The firm believes that the portfolio has significant upside over the next 5 years. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Optimist Fund highlighted stocks like Carvana Co. (NYSE:CVNA) in the fourth quarter 2024 investor letter. Headquartered in Tempe, Arizona, Carvana Co. (NYSE:CVNA) is an e-commerce platform for buying and selling used cars. The one-month return of Carvana Co. (NYSE:CVNA) was 30.79%, and its shares gained 435.77% of their value over the last 52 weeks. On February 4, 2024, Carvana Co. (NYSE:CVNA) stock closed at $257.65 per share with a market capitalization of $30.131 billion.
Optimist Fund stated the following regarding Carvana Co. (NYSE:CVNA) in its Q4 2024 investor letter:
“Carvana Co. (NYSE:CVNA) – Carvana achieved an outstanding year, reigniting revenue growth back to over 20% and delivering adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) margins exceeding 11%—the highest in the industry. As the fastest growing and most profitable used car retailer, Carvana stands out as a truly exceptional company. Despite these impressive achievements, it holds just a 1% share of the market. In most other retail categories, the market leader commands over 10% share, highlighting the material growth potential that lies ahead for the company.”
A customer buying a used car with the help of a finance specialist.
Carvana Co. (NYSE:CVNA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the third quarter which was 61 in the previous quarter. In the third quarter, Carvana Co. (NYSE:CVNA) reported $3.655 billion in revenues, an increase of 32% from Q3 2024.While we acknowledge the potential of Carvana Co. (NYSE:CVNA) 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 NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed Carvana Co. (NYSE:CVNA) and shared the list of best growth stocks to buy for the next 5 years. Carvana Co. (NYSE:CVNA) was the key contributor to the performance of Optimist Fund in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 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.
