Claret Asset Management on Robinhood (HOOD): “Buyer Beware”

Claret Asset Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. In its fourth-quarter letter, the fund talked about the 11 plus one “Interesting” or “Surprising” things about 2021, and described the past year as “another amazing year that few would have predicted and surprised everyone far more positively than expected”. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Claret Asset Management, in its Q4 2021 investor letter, mentioned Robinhood Markets, Inc. (NASDAQ: HOOD) and discussed its stance on the firm. Robinhood Markets, Inc. is a Menlo Park, California-based financial services company with an $11.4 billion market capitalization. HOOD delivered a -22.92% since the beginning of the year and it closed at $13.69 per share on January 20, 2022.

Here is what Claret Asset Management has to say about Robinhood Markets, Inc. in its Q4 2021 investor letter:

“Robinhood went public at $38 a share at the end of July of this year. After a oneday decline of 8%, it proceeded to rise to a peak of $85 in a matter of 4 days before settling down around $40 in September. Then, we found out that the company does not appear to understand the margin rules that apply to their client’s trades… and got fined by the Securities Exchange Commission. As of today, it is trading below $20, at 57 times earnings, approximately half of its IPO price. Caveat emptor… Buyer beware.”

Our calculations show that Robinhood Markets, Inc. (NASDAQ: HOOD) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. HOOD was in 20 hedge fund portfolios at the end of the third quarter of 2021, compared to 0 funds in the previous quarter.   delivered a -66.84% return in the past 3 months.

You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.