Rowan Street Capital, an investment management company, released its first quarter 2024 investor letter. A copy of the letter can be downloaded here. Rowan Street Capital celebrated its 9th anniversary in March 2024. The fund generated a +25.6% (net) return in the first quarter. Driven by its top 4 holdings (META, SPOT, TTD, and SHOP), the fund generated a +70.6% (net) return over the last 12 months. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Rowan Street Capital featured stocks like The Trade Desk, Inc. (NASDAQ:TTD) in its Q1 2024 investor letter. Headquartered in Ventura, California, The Trade Desk, Inc. (NASDAQ:TTD) is a technology company. On May 10, 2024, The Trade Desk, Inc. (NASDAQ:TTD) stock closed at $87.26 per share. One-month return of The Trade Desk, Inc. (NASDAQ:TTD) was 1.03%, and its shares gained 40.06% of their value over the last 52 weeks. The Trade Desk, Inc. (NASDAQ:TTD) has a market capitalization of $43.335 billion.
Rowan Street Capital stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its first quarter 2024 investor letter:
“We bought The Trade Desk, Inc. (NASDAQ:TTD) stock exactly 4 years ago at an average cost of $17.40 (split-adjusted). Since our purchase we have made 5x on our original investment, translating to ~50% annualized return. But it’s our journey to the 5-bagger return that is most interesting here. About 1.5 years following our purchase, the stock had skyrocketed to the highs of $107 in November 2021 as NASDAQ peaked. At the time we knew very well that the stock was overvalued and had gotten ahead of itself. After all, this was a 6-bagger in just 1.5 years, so the conventional wisdom would suggest to bag your profits. “You don’t go broke taking a profit” they say, which is the biggest lie on Wall Street in our opinion.
However, we decided to keep the stock, knowing that it will likely experience a correction sometime in the near future. And here is our rational… First of all, we had gotten to know Trade Desk and its management team relatively well during our 1.5 years of ownership. We were convinced that we had stumbled upon a great business with excellent long-term growth prospects. We were fortunate to establish a position at an attractive price as this stock has always been very expensive. If we were to bag our profits at the time, no one would criticize a 6x return over the course of 1.5 years. But… what would we do with the cash proceeds? First, our investors would be faced with a capital gain tax bill at the end of the year. Would we sit there in hopes that we can buy it back at a lower price? And if it dropped, would we have bought it back? Our experience has taught us that it sounds nice in theory but very unlikely in practice! Could we have avoided a setback? Yes, but who could be sure we would return to the stock in time before an important rally (close to impossible and not what we are good at). So 5x in 1.5 years is very nice, but 5x in 4 years as of now is still an amazing return. And… we still own a great business that will likely do well over time and we didn’t take all that capital and plow it into something we don’t know very well or is likely a mistake. There are not a lot of TTDs around! Truly exceptional companies are rare and our job is to buy right and to hold on!..” (Click here to read the full text)
A large array of computer screens and tech equipment representing the technology company’s self-service cloud-based platform.
The Trade Desk, Inc. (NASDAQ:TTD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held The Trade Desk, Inc. (NASDAQ:TTD) at the end of the fourth quarter which was 39 in the previous quarter.
We discussed The Trade Desk, Inc. (NASDAQ:TTD) in another article and shared the list of best marketing stocks to buy. Rowan Street Capital stated in its previous quarterly letter that since its investment in The Trade Desk, Inc. (NASDAQ:TTD) the stock has increased by +275%, an annualized return of 42%. In addition, please check out our hedge fund investor letters Q1 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.
