Infuse Asset Management, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The goal of Infuse is to become the best-performing public equity fund over the next 50 years. After operating for just over two years, it was a slow beginning to the process of executing the audacious goal. However, it has enabled the firm to selectively recruit amazing partners and truly return to its core values. Since its start, the fund has outperformed the S&P, and established a strong basis for long-term compounding, and it is growing stronger every day. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Infuse Asset Management highlighted stocks like Axon Enterprise, Inc. (NASDAQ:AXON), in the fourth quarter 2024 investor letter. Axon Enterprise, Inc. (NASDAQ:AXON) manufacturers conducted energy devices (CEDs) under the TASER brand. The one-month return of Axon Enterprise, Inc. (NASDAQ:AXON) was -12.21%, and its shares gained 127.37% of their value over the last 52 weeks. On January 10, 2025, Axon Enterprise, Inc. (NASDAQ:AXON) stock closed at $570.00 per share with a market capitalization of $43.465 billion.
Infuse Asset Management stated the following regarding Axon Enterprise, Inc. (NASDAQ:AXON) in its Q4 2024 investor letter:
“Axon Enterprise, Inc.’s (NASDAQ:AXON) stock is never really cheap but they just continue to execute. New products like DraftOne are adding a ton of value to officers and Axon continues to innovate on its drone platform. While the company trades for a very high multiple, the contracted backlog of more than $9 billion shows that there is potential for at least several billion dollars of free cash flow in the future. However, I am looking to trim this one as I think the valuation has gotten ahead of itself. While selling a truly great company is almost always a bad choice, at some point, the math to justify forward returns becomes quite difficult. Axon’s IRR for the fund has been over 80% annually and I just don’t see nearly as much upside in the future. I do try to be slow to sell big winners as they tend to outperform even sky-high expectations. As we continually raise our standards, one thing I’ve realized is there really aren’t that many truly special companies out there so it pains me to sell a company I put in that category. Even still, sometimes the math just doesn’t quite pencil out and it’s time to trim. Next quarter, we’ll discuss our selling process but for now, we’re paring back a winner based solely on valuation.”
A technician in a white coat testing an in-car system on a modern military vehicle.
Axon Enterprise, Inc. (NASDAQ:AXON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Axon Enterprise, Inc. (NASDAQ:AXON) at the end of the third quarter which was 36 in the previous quarter. In the third quarter, Axon Enterprise, Inc.’s (NASDAQ:AXON) revenue grew 32% year-over-year and delivered strong adjusted EBITDA with a 26.7% margin. While we acknowledge the potential of Axon Enterprise, Inc. (NASDAQ:AXON) 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 Axon Enterprise, Inc. (NASDAQ:AXON) and shared the list of NASDAQ 100 stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 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.