Tsai Capital, an investment management company, released its fourth quarter investor letter. A copy of the letter can be downloaded here. Tsai Capital celebrated 25 years track record in 2024. Tsai Capital Growth Equity Strategy gained 23.0% after fees, and 24.5% before fees in 2024 compared with a total return of 25.0% for the S&P 500 Index. The strategy gained 604.5% cumulatively after fees, and 886.4% before fees since its inception 25 years ago compared to 526.7% total return for the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Tsai Capital highlighted stocks like QXO, Inc. (NYSE:QXO) in the fourth quarter 2024 investor letter. QXO, Inc. (NYSE:QXO) is a business application, technology, and consulting company. The one-month return of QXO, Inc. (NYSE:QXO) was -12.82%, and its shares lost 87.37% of their value over the last 52 weeks. On January 29, 2024, QXO, Inc. (NYSE:QXO) stock closed at $13.40 per share with a market capitalization of $5.486 billion.
Tsai Capital stated the following regarding QXO, Inc. (NYSE:QXO) in its Q4 2024 investor letter:
“We initiated a position in QXO, Inc. (NYSE:QXO) at approximately $11 per share. Under the leadership of Brad Jacobs, the company is in the early stages of executing a bold plan to consolidate and disrupt the $800 billion building products distribution industry. Having previously invested in two of Brad’s highly successful ventures, United Rentals and XPO Logistics, Tsai Capital is excited to support his latest endeavor.
It’s our goal to partner with exceptional capital allocators. Having followed Brad’s remarkable career for nearly three decades and having spent many hours speaking with him over the years, I consider him one of the best in the field. Notably, his personal commitment of $900 million to QXO further aligns his interests with ours.
With approximately $5 billion in cash and no debt, QXO is well-positioned to make its first acquisition in North America, targeting a major player in the industry. Based on Brad’s proven playbook, we believe this initial acquisition will serve as a platform for further acquisitions.
Although QXO’s stock price has appreciated since our initial purchase, we believe the market has yet to fully recognize the extent to which the company is likely to deploy capital at attractive rates of return, not to mention the economic moat that Brad has already built. The company’s advantages are grounded in an exceptional network of professional contacts that he has developed over decades and a carefully curated team of driven and talented professionals, many of whom have worked with him in the past.”
A professional banker in a suit consulting with a small business owner in an office.
QXO, Inc. (NYSE:QXO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held QXO, Inc. (NYSE:QXO) at the end of the third quarter which was 5 in the previous quarter. While we acknowledge the potential of QXO, Inc. (NYSE:QXO) 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 QXO, Inc. (NYSE:QXO) and shared the list of stocks that Jim Cramer recently discussed. 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.