Lakehouse Capital, an investment management company, released its “Lakehouse Global Growth Fund” October 2022 monthly letter. A copy of the same can be downloaded here. October was a busy month for the fund, and it returned 3.4% net of fees and expenses compared to a 6.6% return for the MSCI All Country World Index. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Lakehouse Capital discussed stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the October 2022 monthly letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products and subscriptions. On November 14, 2022, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $98.49 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -15.36%, and its shares lost 44.37% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.005 trillion.
Lakehouse Capital made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2022 investor letter:
“The Fund’s largest position, Amazon.com, Inc. (NASDAQ:AMZN), reported a solid quarterly result with net sales increasing 15% year over year (19% in constant currency terms) to $127 billion. However, the business isn’t without its challenges and the company is seeing increasing macro pressures across both retail and Amazon Web Services (AWS), which resulted in guidance for the fourth quarter coming in below prior expectations. As has been the case for the last several quarters, profitability also remains under pressure due not only to external macro factors, such as elevated shipping and fuel costs, but also lower productivity and efficiency costs as a result of some overcapacity on the back of its recent investment cycle. While this does create some near term uncertainty, we continue to believe Amazon is well positioned to manage these issues and remains on track to deliver significant profit improvements over the next twelve months.
Aside from e-commerce, the two other most critical segments, AWS and advertising, grew 28% and 30% year-on-year, respectively. While AWS’ growth remains healthy, especially considering its scale, it was a noticeable slowdown from the 33% growth delivered last quarter. Management attributed the deceleration to the fact that they are seeing an increasing number of customers who want to control their cloud computing costs as the economy slows, and the company is proactively helping them move to lower storage tiers or instance levels, while also leveraging its own AWS Graviton chips. In our view, the current pressures Amazon is facing are largely macro-driven and not fundamental. We believe they will prove manageable with time and that the long term risk/reward is very compelling at these levels. As such, we remain patient holders and also note that the valuation is currently the most attractive it has been since the GFC at 5x trailing gross profit.”
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Amazon.com, Inc. (NASDAQ:AMZN) is in 2nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 252 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the second quarter which was 271 in the previous quarter.
We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared the list of the best 52-week low stocks to invest in. In addition, please check out our hedge fund investor letters Q3 2022 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.
