Alphyn Capital Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly portfolio net return of -13.4% was recorded by the fund for the first quarter of 2022, compared to its benchmark, the S&P 500 TR Index which delivered a -4.6% return for the same period. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Alphyn Capital Management mentioned Amazon.com, Inc. (NASDAQ:AMZN) and explained its insights for the company. Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle, Washington-based e-commerce company with a $1.4 trillion market capitalization. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -13.27% return since the beginning of the year, while its 12-month returns are down by -16.60%. The stock closed at $2,891.93 per share on April 28, 2022.
Here is what Alphyn Capital Management has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“We doubled our position in Amazon after the price declined due to market worries regarding cost/wage inflation and the need for increased capital expenditure. In contrast to many “covid beneficiaries,” Amazon’s sales are proving resilient, as the convenience of online shopping for everyday items has led to habit formation. To accommodate the increase in business, Amazon increased its operating square footage by 60% and 40% in 2020 and 2021. It plans to grow a further 25% in 2022. Future revenues will benefit from this increase in capacity, and margins should expand as capital expenditure moderates. Furthermore, Amazon added ~75m Prime members in the 2020/21 2-year period, vs. ~50m in 2018/19. The value of these memberships is enormous, as each Prime member has a 98% 2-year retention rate and typically spends $2,500 per year on Amazon. Meanwhile, Amazon’s 3rd party marketplace is an attractive high-margin business, and the company continues to ramp up advertising services to sellers on its platform.
With AWS and cloud services, Amazon and its peers (Google, Microsoft, etc.) provide the digital infrastructure for the modern economy. By some measures, the total addressable market is over $1.6 tr, which means AWS and its peers, large as they are, currently account for less than 7% of the market. It is rare to have a company of the size and quality of Amazon with such significant long-term growth opportunities.”
Our calculations show that Amazon.com, Inc. (NASDAQ:AMZN) ranks 1st on our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 279 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 242 funds in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered a 0.43% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Amazon.com, Inc. (NASDAQ:AMZN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
