Here’s Why Carvana Co. (CVNA) Continues to Perform Well

Optimist Fund, an investment management company, released its third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund appreciated approximately 28% in the third quarter, fueled by strong fundamental performance across its holdings. Over the first five years, the fund generated an annualized return of 11.5%, net of fees. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Optimist Fund highlighted stocks like Carvana Co. (NYSE:CVNA) in the third quarter 2024 investor letter. Headquartered in Tempe, Arizona, Carvana Co. (NYSE:CVNA) is an e-commerce platform for buying and selling used cars. The one-month return of Carvana Co. (NYSE:CVNA) was 1.45%, and its shares gained 345.85% of their value over the last 52 weeks. On December 13, 2024, Carvana Co. (NYSE:CVNA) stock closed at $248.25 per share with a market capitalization of $29.03 billion.

Optimist Fund stated the following regarding Carvana Co. (NYSE:CVNA) in its Q3 2024 investor letter:

“Carvana Co. (NYSE:CVNA) continues to perform well with unit growth accelerating from mid-teens in Q1 to over 30% in Q2, while achieving double the adjusted EBITDA margins of the automotive retail sector. It remains our largest position.”

A customer buying a used car with the help of a finance specialist.

Carvana Co. (NYSE:CVNA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the third quarter which was 61 in the previous quarter. In the third quarter, Carvana Co. (NYSE:CVNA) reported $3.655 billion in revenues, an increase of 32% from Q3 2024.While we acknowledge the potential of Carvana Co. (NYSE:CVNA) 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 Carvana Co. (NYSE:CVNA) and shared the list of top stocks from Jim Cramer’s best performers list. 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.