Deep Sail Capital, an investment management company, released its third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -23.3% net of fees while averaging 78% net long exposure. Weakness in micro- and small-cap equities and growth decelerations in certain positions led to the underperformance of the fund in the quarter. You can check the top 5 holdings of the fund to know its best picks in 2023.
Deep Sail Capital highlighted stocks like Adyen N.V. (OTC:ADYEY) in the Q3 2023 investor letter. Headquartered in Amsterdam, the Netherlands, Adyen N.V. (OTC:ADYEY) is a payments platform. On December 13, 2023, Adyen N.V. (OTC:ADYEY) stock closed at $13.05 per share. One-month return of Adyen N.V. (OTC:ADYEY) was 18.17%, and its shares lost 10.81% of their value over the last 52 weeks. Adyen N.V. (OTC:ADYEY) has a market capitalization of $40.481 billion.
Deep Sail Capital made the following comment about Adyen N.V. (OTC:ADYEY) in its Q3 2023 investor letter:
“Unexpected growth deceleration is potentially the worst outcome for many high-growth stocks, like the ones that the fund invests in. Our three worst detractors in the quarter were Adyen N.V. (OTC:ADYEY), Aritzia (OTCPK:ATZAF), and Biolife Solutions (BLFS), which all experienced a revenue growth deceleration in the third quarter. The worst detractor in the quarter was Adyen, which reported in August that the first half of the year’s revenues were up 23% YoY, which was lower than their mid-term guidance of 25–35% revenue growth. This deceleration came at a bad time for Adyen, as they just completed a large hiring effort in the first half of 2023 that drove up their expenses as well, causing a larger negative margin impact. The main drivers of the growth deceleration were economically driven by their customers choosing to cut costs and adopt cheaper payment processing options than Adyen. Most of Adyen’s highvolume customers have multiple processing partners, with Adyen being the highest quality across most countries but also the most expensive payment processor. This makes them susceptible to switching from these large, high-volume customers. Adyen has realized this vulnerability, which is why they are pushing significantly into the midmarket through their platforms and marketplace offerings. Adyen is still the best-in-class payment offering, with a bottom-up-built platform and a top management team that manages for the long term. On top of that, Adyen still has several new business opportunities in front of them that are very early in development, like Treasury and Platforms.”
A customer using the the latest B2B payment platform for banking products and services.
Adyen N.V. (OTC:ADYEY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held Adyen N.V. (OTC:ADYEY) at the end of third quarter which was 2 in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2023 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.
