Manole Capital Management, an investment management company, focused on covering the Financial and Technology sectors, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter investor letter, the firm highlighted its version of FINTECH, showcased unique trading process, touched on important and timely FINTECH subjects (holiday spending, legal issues, etc.), discussed some macro topics (interest rates, inflation, jobs, the Fed, etc.), and shared expectations and thoughts for 2025. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Manole Capital Management highlighted stocks like Virtu Financial, Inc. (NASDAQ:VIRT) in the fourth quarter 2024 investor letter. Headquartered in New York, New York, Virtu Financial, Inc. (NASDAQ:VIRT) is a financial services company that operates through Market Making and Execution Services segments. The one-month return of Virtu Financial, Inc. (NASDAQ:VIRT) was 10.18%, and its shares gained 147.44% of their value over the last 52 weeks. On January 31, 2024, Virtu Financial, Inc. (NASDAQ:VIRT) stock closed at $40.06 per share with a market capitalization of $6.194 billion.
Manole Capital Management stated the following regarding Virtu Financial, Inc. (NASDAQ:VIRT) in its Q4 2024 investor letter:
“Every summer, benchmarks update their holdings and constituents. Passive managers usually try to immediately adjust their portfolios, to match these new index weightings, so they don’t have too much dispersion. On the first trading day (following these index changes), stocks impacted can get a nice, one-day pop.
We have been long-term shareholders of Virtu Financial, Inc. (NASDAQ:VIRT), and it got added to the S&P 600 (small cap) this summer. Virtu, classified by GICS as a Financial, aligns with our version of FINTECH. The traditional process for trading equity securities was in “the pits”, in an open-outcry environment. That trading process was wonderfully portrayed in our favorite movie – Trading Places, with Eddie Murphy and Dan Ackroyd.
Now, a large percentage of equity trading is completed electronically, either off exchange (in dark pools of liquidity), or on electronic platforms like Virtu. Back to our definition of FINTECH, we believe that Virtu is “using technology” to change how equities get traded. Like a modern-day version of old school market makers. Following its inclusion in the index, Virtu’s shares rose 10%, contributing to its 85% gain this year.
While it is nice to get benchmark inclusion and a one-day increase in our shares, we wanted to mention this for a different reason. We exclusively focus on the emerging FINTECH industry, but our definition remains different than the overall market’s perception of FINTECH. Both of these holdings are likely not considered FINTECH by other investors and are not owned in the market’s largest FINTECH ETF. These examples highlight our unique perspective on FINTECH, which diverges from conventional market views. Both Virtu and RB Global demonstrate how technology can transform traditional processes, embodying our FINTECH definition and unique investment approach.”
A financial analyst working at a desk of computer monitors reviewing data.
Virtu Financial, Inc. (NASDAQ:VIRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Virtu Financial, Inc. (NASDAQ:VIRT) at the end of the third quarter which was 22 in the previous quarter. While we acknowledge the potential of Virtu Financial, Inc. (NASDAQ:VIRT) 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 Virtu Financial, Inc. (NASDAQ:VIRT) and shared the list of stocks on Jim Cramer’s radar. 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.