Greystone Capital Management, an investment management company, released its fourth-quarter 2024 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the return for separate accounts managed by the firm ranged from +0.5 to +2.6%. The median account returned +1.7%, net of fees bringing the yearly returns to +19.9%. The strategy returned a cumulative +168.8% or +24.3% per year, net of fees, since inception in Q4 2019 and outperformed both the S&P 500 and the Russell 2000 by an annualized +6.0% and +14.1% per year. The results for the fourth quarter and FY2024 compare both negatively and positively to the returns of the S&P 500 and Russell 2000, which were +2.4% and +0.3% for the quarter and +25.0% and +11.5% for the entire year. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Greystone Capital Management highlighted stocks like Despegar.com, Corp. (NYSE:DESP) in its Q4 2024 investor letter. Despegar.com, Corp. (NYSE:DESP) is an online travel company that offers travel and travel-related products to leisure and corporate travelers. The one-month return of Despegar.com, Corp. (NYSE:DESP) was -0.88%, and its shares gained 102.96% of their value over the last 52 weeks. On January 24, 2024, Despegar.com, Corp. (NYSE:DESP) stock closed at $19.20 per share with a market capitalization of $1.605 billion.
Greystone Capital Management stated the following regarding Despegar.com, Corp. (NYSE:DESP) in its Q4 2024 investor letter:
“I made a costly mistake of omission in failing to purchase shares of Despegar.com, Corp. (NYSE:DESP) below $10/share this year, or at any point during the past few years. I’ve followed Despegar, a South American focused online travel agency, since its IPO and came to know it as a very high-quality business, with a very good management team, and a long growth runway. In late December, Despegar entered into a deal to be acquired by Prosus, for $1.7B in cash, or $19.50/share. Had we owned Despegar years ago, our compound annual return would have been in excess of 25% per year. Moving forward, the aim is to make less mistakes of this nature. Great businesses run by strong and capable management teams, with long growth runways, available at cheap prices, are to be purchased and held on to for dear life.
My experience with Despegar is illustrative (again, please rub my nose in this mistake). Despegar stock declined -50% shortly after its IPO and traded below that price for nearly four years. As earnings power grew (revenues and cash flow expanded significantly post-COVID), the valuation gap finally closed. Yet, if your time horizon was one quarter, or six months, or one year, Despegar would have been considered a terrible investment. Especially if the market continued to climb.”
A business person typing on a laptop in a hotel lobby emphasizing the comfort and sophistication of the company’s travel offerings.
Despegar.com, Corp. (NYSE:DESP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Despegar.com, Corp. (NYSE:DESP) at the end of the third quarter which was 24 in the previous quarter. In the third quarter, Despegar.com, Corp.’s (NYSE:DESP) revenue increased 8.9% year-over-year to $194 million. While we acknowledge the potential of Despegar.com, Corp. (NYSE:DESP) 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 Despegar.com, Corp. (NYSE:DESP) and shared the list of cheap travel stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.