Vltava Fund, an investment management company, recently released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The letter contemplated whether the stock market is a casino. The author emphasized that the stock market is not a casino, and investors must not treat it as such to achieve better returns. The trend shows that a growing number of people have recently started to view stock market trading as gambling. However, the firm believes that stocks are the best long-term investment. In the first quarter, markets were both interesting and volatile due to several factors. The fund has been in existence for 21 years and has never engaged in stock trading solely due to political changes. The fund believes that it is vital to focus on selecting companies with long-term value growth and strong shareholder-focused management, when the political changes affect the economy and corporate profitability. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, Vltava Fund emphasized stocks such as Williams-Sonoma, Inc. (NYSE:WSM). Williams-Sonoma, Inc. (NYSE:WSM) is an omni-channel specialty retailer of various products for home. The one-month return of Williams-Sonoma, Inc. (NYSE:WSM) was -23.51%, and its shares lost 8.07% of their value over the last 52 weeks. On April 4, 2025, Williams-Sonoma, Inc. (NYSE:WSM) stock closed at $141.68 per share with a market capitalization of $17.499 billion.
Vltava Fund stated the following regarding Williams-Sonoma, Inc. (NYSE:WSM) in its Q1 2025 investor letter:
“We sold the rest of the Williams-Sonoma, Inc. (NYSE:WSM) stock. This was a very profitable investment for us. How do we evaluate its feedback? We did not hold the stock for very long, only about 3-1/2 years. During that time, the stock price moved from less than $50 to more than $200. In the beginning, we could buy the shares at single digit earnings multiples. The stock price was well below our estimate of the company’s value. The business itself is of very high quality, with high returns on capital, no debt, and an exemplary asset allocation. As such, we see the purchase itself as a good move and entirely in line with our investment philosophy. When we sold the shares, they were trading at about 25 times earnings. This was significantly higher than our current estimate of the company’s value. Any company, however good and promising it may appear, is a good investment at a low price but a poor investment at a high price. We are always reminded of this and therefore we sold the WSM shares. So far, we see this also as a good move and entirely consistent with our investment philosophy. At the same time, however, we are aware that the large total return on this investment was only partly the result of our transactions and analysis. Luck also played a large part. We expected that WSM would do well in its business. This was confirmed, and the shares also had been objectively very cheap when we bought them. However, all of this falls far short of justifying the rapid quadrupling of the share price. We therefore do not succumb to the temptation to attribute more to our own skills than is prudent. It remains important for us to stick to our investment philosophy and investment process in our stock selection and individual transactions. On average and over the longer term, they should continue to bring us solid returns, although in individual cases or over shorter periods they may deliver returns both much better than they deserve and much poorer than they deserve.”
An interior of a modern home with a wide selection of cookware, tools and cutlery on display.
Williams-Sonoma, Inc. (NYSE:WSM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Williams-Sonoma, Inc. (NYSE:WSM) at the end of the fourth quarter which was 35 in the previous quarter. While we acknowledge the potential of Williams-Sonoma, Inc. (NYSE:WSM) 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.
We covered Williams-Sonoma, Inc. (NYSE:WSM) in another article, where we shared the list of best furniture stocks to buy. Vltava Fund sold majority of its stake in Williams-Sonoma, Inc. (NYSE:WSM) last quarter, realizing a large profit. In addition, please check out our hedge fund investor letters Q1 2025 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.