Polen Capital, an investment management company, released its “Polen U.S. SMID Company Growth Strategy” third-quarter 2023 investor letter. A copy of the same can be downloaded here. The portfolio returned -5.00% gross and -5.26% net of fees in the third quarter compared to a -6.84% return for the Russell 2500 Growth Index. The portfolio returned 11.68% (net) YTD, compared to 5.63% for the index. The negative absolute return of the portfolio in the quarter is due to ongoing macroeconomic uncertainty related to interest rates, credit tightening, and an uneven economy from a growth perspective. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Polen U.S. SMID Company Growth Strategy highlighted stocks like Farfetch Limited (NYSE:FTCH) in its Q3 2023 investor letter. Headquartered in London, the United Kingdom, Farfetch Limited (NYSE:FTCH) is an online marketplace for luxury goods. On October 30, 2023, Farfetch Limited (NYSE:FTCH) stock closed at $1.48 per share. One-month return of Farfetch Limited (NYSE:FTCH) was -28.16%, and its shares lost 82.55% of their value over the last 52 weeks. Farfetch Limited (NYSE:FTCH) has a market capitalization of $585.29 million.
Polen U.S. SMID Company Growth Strategy made the following comment about Farfetch Limited (NYSE:FTCH) in its Q3 2023 investor letter:
“The most significant detractors from the Portfolio’s relative performance in the quarter included Farfetch Limited (NYSE:FTCH) Doximity, and Paycom.
Farfetch is a leading back-office services and software provider for luxury brands seeking to globalize their businesses online and an extensive online marketplace for luxury apparel and accessories. During the quarter, the company reported weaker-than-expected revenue and gross merchandise value (“GMV”) while also lowering GMV and operating margin projections for the entire year. The stock traded down more than 40% on this news. We ultimately exited the position during the quarter. Please see the commentary in the “Portfolio Activity” section for more details about the sale decision.
Farfetch is a leading digital software and services provider and online marketplace for global luxury brands. While we believe in the company’s long-term potential, profitability has trended in the wrong direction, and a turnaround is taking longer than expected. While Farfetch may still prove successful over time, and the stock is arguably inexpensive, we can no longer count on management’s execution, and we believe there are better risk-adjusted return opportunities in higher quality businesses.”
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Farfetch Limited (NYSE:FTCH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Farfetch Limited (NYSE:FTCH) at the end of second quarter which was 39 in the previous quarter.
We previously discussed Farfetch Limited (NYSE:FTCH) in another article and also shared a list of best depressed stocks to buy. 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.
