GreenWood Investors, an investment management company, released its fourth quarter investor letter. A copy of the letter can be downloaded here. The fund’s separate accounts composite generated 16.6% returns, in 2024, roughly in line with the benchmark MSCI ACWI return of 16.3%. Since inception to date, the strategy returned 10.8% CAGR compared to 7.7% for ACWI. In addition, please check the fund’s top five holdings to know its best picks in 2024.
GreenWood Investors highlighted stocks like PDD Holdings Inc. (NASDAQ:PDD), in the fourth quarter 2024 investor letter. PDD Holdings Inc. (NASDAQ:PDD) is a multinational commerce group that operates through Pinduoduo, an e-commerce platform and Temu, an online marketplace. The one-month return of PDD Holdings Inc. (NASDAQ:PDD) was -3.00%, and its shares lost 32.76% of their value over the last 52 weeks. On January 8, 2025, PDD Holdings Inc. (NASDAQ:PDD) stock closed at $100.32 per share with a market capitalization of $139.321 billion.
GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q4 2024 investor letter:
“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.
PDD Holdings founder Colin Huang is who inspired us to “run 3x faster,” as the relentless corporate culture of PDD has built an e-commerce company with roughly the same GMV (gross merchandise value) of Amazon in one-third the time it took Amazon to build itself. Shares reacted negatively when the company decided to reinvest its record margins into even faster growth and creating a healthier supplier ecosystem. As it looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple.
PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices. We would not want to compete with the demanding corporate culture of PDD and Temu. Its operating model is relentless at identifying efficiency throughout the manufacturing and selling supply chain. Not only is it a mor formidable competitor than Amazon, and growing much faster, but the valuation is 4x more attractive than Amazon’s…” (Click here to read the full text)
A close-up of a customer using the company’s e-commerce platform whilst shopping online.
PDD Holdings Inc. (NASDAQ:PDD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 78 hedge fund portfolios held PDD Holdings Inc. (NASDAQ:PDD) at the end of the third quarter which was 86 in the previous quarter. PDD Holdings Inc.’s (NASDAQ:PDD) revenues increased 44% year-over-year, reaching RMB99.4 billion driven by a rise in revenue from online marketing services and transaction services. While we acknowledge the potential of PDD Holdings Inc. (NASDAQ:PDD) 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 PDD Holdings Inc. (NASDAQ:PDD) and shared billionaire David Tepper’s top stock picks heading into 2025. 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.