Brown Capital Management, an investment management company, released its “The Brown Capital Management Mid Company Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. The Mid Company Fund returns of 14.08% in the quarter slightly lagged the 14.55% return for the Russell Midcap Growth Index. The fund declined 27.14% for the full year compared to a 25.87% return for the benchmark. In addition, check the fund’s top five holdings to know its best picks in 2023.
Brown Capital Management Mid Company Fund featured stocks like Shopify Inc. (NYSE:SHOP) in its Q4 2023 investor letter. Headquartered in Ottawa, Canada, Shopify Inc. (NYSE:SHOP) provides a cloud-based commerce platform. On March 26, 2024, Shopify Inc. (NYSE:SHOP) stock closed at $78.53 per share. One-month return of Shopify Inc. (NYSE:SHOP) was 3.93%, and its shares gained 68.16% of their value over the last 52 weeks. Shopify Inc. (NYSE:SHOP) has a market capitalization of $101.083 billion.
Brown Capital Management Mid Company Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its fourth quarter 2023 investor letter:
“Among the top contributors for the fourth quarter were Shopify Inc. (NYSE:SHOP) and Manhattan Associates (MANH). Shopify is the second-largest cloud-based e-commerce software platform in the U.S., with 10% market share. Shopify provides upstarts and Fortune 500 companies alike with turnkey solutions to help individuals and businesses run their online stores. The range of services includes web design, inventory management, payment processing, analytics and reporting, among others. We believe the company is the most attractive alternative to Amazon and has an addressable market greater than $150 billion.
Shopify released stellar results this quarter, growing revenue 25% with meaningful margin expansion and management indicating more to come. Notably, the third quarter was Shopify’s first full quarter after deciding in May 2023 to abandon its in-house fulfillment and logistics ambitions which put significant pressure on margins. Additionally, competitive concerns from Amazon’s “Buy With Prime” initiative that launched in April 2022 also abated. The feature allows merchants selling outside of Amazon to access its fulfillment network and enjoy Prime benefits such as free deliveries and returns, posing a threat to Shopify’s payment-processing revenue. Instead of duking it out, Shopify and Amazon reached a partnership agreement in September that preserves customer choice and, to our knowledge, keeps Shopify’s payment revenues intact. With these key concerns in the rear-view mirror, Shopify should have a clear path to double-digit revenue growth and margin expansion for years.”
A woman in fashionable apparel shopping on an e-commerce platform.
Shopify Inc. (NYSE:SHOP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Shopify Inc. (NYSE:SHOP) was held by 68 hedge fund portfolios, down from 69 in the previous quarter, according to our database.
We discussed Shopify Inc. (NYSE:SHOP) in another article and shared the list of best stocks under $100 to buy. In addition, please check out our hedge fund investor letters Q4 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.
