Focus Capital Management, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund performed poorly in the fourth quarter compared to the broader market, returning –4.7% compared to the S&P 500’s return of +2.8%. This ends a disastrous year for the Fund, which returned –27.6% for the full year, compared to the S&P 500’s return of +25.5% over the same time period. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Focus Capital Management emphasized stocks such as Silicon Motion Technology Corporation (NASDAQ:SIMO). Silicon Motion Technology Corporation (NASDAQ:SIMO) designs, develops, and markets NAND flash controllers for solid-state storage devices. The one-month return of Silicon Motion Technology Corporation (NASDAQ:SIMO) was 8.03%, and its shares lost 20.14% of their value over the last 52 weeks. On February 13, 2025, Silicon Motion Technology Corporation (NASDAQ:SIMO) stock closed at $55.28 per share with a market capitalization of $1.862 billion.
Focus Capital Management stated the following regarding Silicon Motion Technology Corporation (NASDAQ:SIMO) in its Q4 2024 investor letter:
“Silicon Motion Technology Corporation (NASDAQ:SIMO) designs and sells controllers which manage the NAND flash memory ubiquitous in modern computing. Wherever there is NAND flash, there must be a controller, often one from Silicon Motion. SIMO is an ADR (American Depository Receipt) trading on the NASDAQ.
2024 — Growth Across the Board: We just recently discussed at some length in our third quarter letter about Silicon Motion’s strengthening industry position, increasing market share, and growing revenue and margins. Over 2024, revenue has grown 25%+, gross margin has expanded 500 basis points, and net income has about doubled. We will not repeat our points from there at length. We will simply suffice with saying that the future looks even brighter, with continued growth in their core market segments as well as significant growth from their entry into new market segments. Silicon Motion’s entry into the high-end PC market with their PCIe 5.0 controllers is off to a very strong start with major design wins. In fact, Silicon Motion has stated that based on their present design win pipeline, they expect to attain about 50% market share in the high-end PC segment over the next few years, from their present standing start. And their MonTitan enterprise controllers for AI and data centers have already garnered multiple Tier 1 customer wins, with more expected to come, in what is again a greenfield opportunity for the company…” (Click here to read the full text)
An engineer in a lab coat tweaking a circuit board with intricate semiconductors.
Silicon Motion Technology Corporation (NASDAQ:SIMO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Silicon Motion Technology Corporation (NASDAQ:SIMO) at the end of the third quarter which was 43 in the previous quarter. Silicon Motion Technology Corporation (NASDAQ:SIMO) delivered over 25% revenue growth in 2024 compared to previous year. While we acknowledge the potential of Silicon Motion Technology Corporation (NASDAQ:SIMO) 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 Silicon Motion Technology Corporation (NASDAQ:SIMO) and shared the list of best data storage stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 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.