Jackson Square Partners, an investment management firm, released its “SMID-Cap Growth” Q3 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy returned -7.21% (net), compared to a -0.12% for its benchmark, the Russell 2500 Growth Index. The most significant performance contributor during the quarter was information technology sector, while the healthcare sector detracted from performance. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Jackson Square Partners highlighted stocks like Elastic N.V. (NYSE:ESTC) in its Q3 2022 investor letter. Headquartered in Mountain View, California, Elastic N.V. (NYSE:ESTC) is a technology company. On December 21, 2022, Elastic N.V. (NYSE:ESTC) stock closed at $53.57 per share. One-month return of Elastic N.V. (NYSE:ESTC) was -10.12%, and its shares lost 56.79% of their value over the last 52 weeks. Elastic N.V. (NYSE:ESTC) has a market capitalization of $5.122 billion.
Jackson Square Partners made the following comment about Elastic N.V. (NYSE:ESTC) in its Q3 2022 investor letter:
“Case Study: Pivot to Profitability: Driving free cash flow growth at Elastic N.V. (NYSE:ESTC)
Similar to the Wix and NYT examples above, we have been working with a number of companies (Warner Music Group, Upwork, Grocery Outlet, Lyft, Pacific Biosciences, Vimeo, Lending Club, etc.) to drive operations toward an acceleration in free cash flow growth and to clearly articulate this pivot in strategy to the broader investment community — many of whom are skeptical in the face of current GAAP financials showing low or no profitability. This is a nearly uniform dynamic across all of our Disruptor holdings and much of the reason behind the recent strong headwinds in performance, which we believe will be temporary and fleeting as strength becomes more evident in financial statements. Below we outline our thinking on Elastic — a high conviction Disruptor holding in the midst of this FCF transition.
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Background: Elastic is an infrastructure software company that develops the Elastic Stack, an open source suite of software that stores, searches, and visualizes huge quantities of data. Elastic has over 18,000 paying customers across every major industry who leverage its software for a variety of use cases. These include search tools for apps and websites like Booking.com (search tools represent 35% of annual contract value, ACV); logging and analysis software for huge volumes of machine generated events across a global IT footprint, such as Telefonica monitoring performance across its global network (logging and analysis represents 40% of ACV); and security tools to detect and investigate suspicious incidents, such as USAA monitoring its internal network and applications for suspicious activity (25% of ACV). Customers primarily choose Elastic for the breadth of its software suite and cost efficiency versus point solutions. Elastic customers realize ROI through higher customer conversion from better search, faster and more reliable IT infrastructure with robust logging and analysis of traffic, and fewer costly security incidents…” (Click here to read the full text)
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Elastic N.V. (NYSE:ESTC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held Elastic N.V. (NYSE:ESTC) at the end of the third quarter, which was 57 in the previous quarter.
We discussed Elastic N.V. (NYSE:ESTC) in another article and shared Greenhaven Road Capital’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.
