Guinness Global Innovators, an investment management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund generated a total return of 21.9% (TR in GBP) in 2024, compared to the MSCI World Net TR Index return of 20.8%. 2024 turned out to be yet another successful year for stocks. For the first time since the 1990s, the S&P 500 has now produced two years in a row with returns of more than 20% (USD). Against a complex backdrop of shifting monetary policy, geopolitical instability, and disparate regional economic performance, global equities markets produced strong returns. To get an idea of the fund’s best choices for 2024, check out its top 5 positions.
In its fourth quarter 2024 investor letter, Guinness Global Innovators emphasized stocks such as Netflix, Inc. (NASDAQ:NFLX). Netflix, Inc. (NASDAQ:NFLX) is a streaming platform with a market capitalization of $410.771 billion. The one-month return of Netflix, Inc. (NASDAQ:NFLX) was -2.85%, and its shares gained 53.04% of their value over the last 52 weeks. On March 21, 2025, Netflix, Inc. (NASDAQ:NFLX) stock closed at $960.29 per share.
Guinness Global Innovators stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:
“Netflix, Inc. (NASDAQ:NFLX). The streaming giant is a high-quality, fast-growing business with a solid growth runway that is being leveraged by a competent management team. Netflix transitioned to streaming well before competitors and is now the dominant streaming player. Its first-mover advantage allowed it to accrue a vast content library (when capital was cheap and investors were patient) and it has built on this moat with continued investment into original content. This includes a growing non-English catalogue, which has opened up international markets and allowed continued subscriber base growth, which now stands at 270m. Monetising its ad-tier subscribers, expanding penetration in developing markets, and incremental revenue-per-user increases will drive the growth outlook, while Gaming / Sports remains a potential growth avenue for the future. Although the valuation is not overly cheap in the absolute (priced at c.34x 1yr forward earnings), the stock has historically traded in a wide range (40x+ in the pre-COVID growth era and troughing at c.12x in late 2021 over growth fears), we feel the current quality-growth attributes of the firm justify this premium to the market. At present, the business and the narrative around it have turned a corner following concerns over profitability. Management actions have driven both subscriber numbers and profits up meaningfully in recent years, and investors look forward to the encouraging runway for growth – and most importantly profitable growth – that lies ahead. Even as management shift investor focus away from pure subscriber growth to user engagement, there is still a double-digit top-line forecast, while c.25% or more on the bottom line and a strong improvement in margins and free cash flow all make for an encouraging outlook.”
A home theater with family members enjoying streaming content together.
Netflix, Inc. (NASDAQ:NFLX) is in 14th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 144 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the fourth quarter compared to 121 in the third quarter. While we acknowledge the potential of Netflix, Inc. (NASDAQ:NFLX) 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 Netflix, Inc. (NASDAQ:NFLX) and shared the list of best entertainment stocks to buy according to billionaires. In addition, please check out our hedge fund investor letters Q4 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.