Broyhill Asset Management, a boutique investment firm, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The portfolio gained 1.3% net of fees and expenses in 2022 compared to a -18% return for the MSCI World Index. The portfolio compounded at 12.3% annually net of fees and expenses, since inception. In addition, check the fund’s top five holdings to know its best picks in 2022.
Broyhill Asset Management highlighted stocks like Activision Blizzard, Inc. (NASDAQ:ATVI) in the Q4 2022 investor letter. Headquartered in Santa Monica, California, Activision Blizzard, Inc. (NASDAQ:ATVI) interactive entertainment content and services developer. On March 17, 2023, Activision Blizzard, Inc. (NASDAQ:ATVI) stock closed at $78.99 per share. One-month return of Activision Blizzard, Inc. (NASDAQ:ATVI) was 1.83%, and its shares gained 0.19% of their value over the last 52 weeks. Activision Blizzard, Inc. (NASDAQ:ATVI) has a market capitalization of $62.64 billion.
Broyhill Asset Management made the following comment about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q4 2022 investor letter:
“Shares of Activision Blizzard, Inc. (NASDAQ:ATVI) gained 14% for the twelve months ending December 2022, but we managed to lose money on our investment, purchasing shares after Microsoft’s announced acquisition. In hindsight, we were too quick to establish our position upon announcement of the deal. What we initially saw as an attractive spread became much more attractive throughout the year. That being said, we’ve learned by experience that passing up fifty cent dollars laying on the street because they may be later mistaken for quarters, usually results in leaving a lot of money on the table. Most of the time, it’s not long before others come to the realization that they were, in fact, dollars all along. While we have to sometimes remind ourselves of this particular market peculiarity, we’ve also learned that the best approach is to pick up some of those fifty cent dollars when you see them, leaving some on the street to be picked up later should they be mistaken for quarters. In the case of Activision, we continued picking up shares on weakness throughout the year.
While seemingly daily headlines concerning the trials and travails of the pending acquisition have captivated investors and driven short-term volatility in the stock, we think consensus has completely overlooked the exceptional fundamentals of the business, which have inflected sharply higher. Activision recently reported fourth-quarter earnings per share of $1.87 or nearly 25% higher than the average analyst estimate of $1.52, which barely budged over the past three months. Performance was largely driven by the company’s flagship Call of Duty franchise, as Modern Warfare II posted record sales for an opening quarter. Management expects full-year revenue growth of “at least high teens,” which will likely be an outlier in a market full of declining estimates (more on this next). Bottom line: while shares have been rangebound, held at the mercy of regulators, we believe our margin of safety has increased during the year as investors appear uninterested or unaware of the company’s increasing long-term intrinsic value.”
Photo by Fábio Silva on Unsplash
Activision Blizzard, Inc. (NASDAQ:ATVI) is in 26th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 129 hedge fund portfolios held Activision Blizzard, Inc. (NASDAQ:ATVI) at the end of the fourth quarter which was 96 in the previous quarter.
We discussed Activision Blizzard, Inc. (NASDAQ:ATVI) in another article and shared the list of best dividend-paying dividend stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.
