Bonsai Partners, an investment management company, released its Q3 2023 Investor letter. A copy of the same can be downloaded here. In the third quarter, the fund declined -2.8% net of fees and expenses. During this period the S&P 500 Total Return Index declined by -3.3%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Bonsai Partners highlighted stocks like QUALCOMM Incorporated (NASDAQ:QCOM) in the third quarter 2023 investor letter. Headquartered in San Diego, California, QUALCOMM Incorporated (NASDAQ:QCOM) engages in the development and commercialization of foundational technologies for the wireless industry. On January 3, 2024, QUALCOMM Incorporated (NASDAQ:QCOM) stock closed at $137.60 per share. One-month return of QUALCOMM Incorporated (NASDAQ:QCOM) was 3.51%, and its shares gained 25.78% of their value over the last 52 weeks. QUALCOMM Incorporated (NASDAQ:QCOM) has a market capitalization of $153.149 billion.
In its third quarter 2023 investor letter, Bonsai Partners stated the following regarding QUALCOMM Incorporated (NASDAQ:QCOM):
“Robustness at the product level exists differently than in other layers of the value chain. Product diversification follows the same principle, but product control isn’t related to vertical integration. Product control exists in multiple forms, such as switching costs or happy customers who don’t want to buy elsewhere. However, one often overlooked dimension of product-level robustness is adaptability. Some businesses offer goods and services that behave like shapeshifters; they naturally adapt to the market’s needs regardless of how the world changes. Adaptability also serves as a hedge against the unknown.
Consider our investment in Taiwan Semiconductor, which enjoys a highly adaptive product portfolio. If we compare TSMC to a fabless chip maker like QUALCOMM Incorporated (NASDAQ:QCOM), investing in Qualcomm is a bet that its products will retain their technological advantage over time. Meanwhile, TSMC sells a service that naturally produces whatever the end customer wants. There is little need for brilliant product-level foresight; TSMC just needs to maintain its process and service level advantages, allowing it to manufacture whatever the market demands. TSMC’s product portfolio is robust compared to most other semiconductor companies because it naturally adapts to technological and market-driven shifts. Instead of product-level risk, TSMC’s core risks are geopolitical.
In the past, I would have been more drawn to a company like Qualcomm given its clear technological lead in baseband modems, but if I’m honest with myself, I don’t know if their technologies will retain their dominance ten years from now. Qualcomm’s products express a relatively high degree of rigidity in a fast-changing industry, and this is something I prefer to avoid.
While robustness isn’t a guarantee of company survival, it acts as a natural buffer that insulates the companies we invest in against the unknown. The better we are at identifying robustness for our portfolio, the longer we also will endure.”
A technician testing the latest 5G device, demonstrating the company’s commitment to innovation.
QUALCOMM Incorporated (NASDAQ:QCOM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held QUALCOMM Incorporated (NASDAQ:QCOM) at the end of third quarter which was 73 in the previous quarter.
We discussed QUALCOMM Incorporated (NASDAQ:QCOM) in another article and shared the list of most promising metaverse 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.
