Recurve Capital, an investment management company, released its Q4 2024 investor letter. A copy of the letter can be downloaded here. Recurve had an impressive performance in 2024, successfully bouncing back from the drawdown experienced in 2022 more quickly than anticipated. The fourth quarter proved to be particularly strong, achieving nearly +13% in gross returns, compared favorably to the S&P 500 (+2.1%), Nasdaq (+6.2%), and Russell 2000 (flat). In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
In its fourth quarter 2024 investor letter, Recurve Capital emphasized stocks such as Cogent Communications Holdings, Inc. (NASDAQ:CCOI). Cogent Communications Holdings, Inc. (NASDAQ:CCOI) provides high-speed Internet access, private network, and data center colocation space services. The one-month return Cogent Communications Holdings, Inc. (NASDAQ:CCOI) was 8.27%, and its shares gained 5.91% of their value over the last 52 weeks. On February 5, 2024, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) stock closed at $79.18 per share, with a market capitalization of $3.882 billion.
Recurve Capital stated the following regarding Cogent Communications Holdings, Inc. (NASDAQ:CCOI) in its Q4 2024 investor letter:
“Cogent Communications Holdings, Inc. (NASDAQ:CCOI) – 22.0% as of 12/31/2024
Cogent is a slow-motion disruption machine in B2B connectivity markets. It has been undercutting competitors since it was founded, gaining volume and dollar market share for 25 years and counting. Its disruptive network and go-to-market strategies have allowed it to capture >25% market share in global internet traffic and about 20% tenant share in its corporate office footprint by leveraging its industry-leading cost structure to undercut its competitors and gain share through aggressive pricing that still generates high incremental margins on growth.
The company is on the cusp of entering the optical transport market (aka Wavelengths) with a new, purpose-built network that can compete and disrupt on multiple dimensions – on installation speeds (weeks vs. months/quarters), on route uniqueness (90% unique), and on pricing (it has no cost basis and has more efficient variable operational costs). It is more disruptive to the Wavelength market than it has been in the internet market, where price and installation speed were its primary dimensions of value. Any of its Wavelength attributes would be enough to win significant market share, but having all at its disposal significantly enhances Cogent’s odds of success…”(Click here to read the full text)
An aerial view of an internet exchange point, illustrating the importance of an online service provider.
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Cogent Communications Holdings, Inc. (NASDAQ:CCOI) at the end of the third quarter which was 22 in the previous quarter. In the third quarter, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) reported $257.2 million in revenues. While we acknowledge the potential of Cogent Communications Holdings, Inc. (NASDAQ:CCOI) 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 Cogent Communications Holdings, Inc. (NASDAQ:CCOI) and shared the list of best dividend stocks under $100. 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.