RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned 2.5% for the first quarter, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 6.2%, the Russell 1000 Growth Total Return Index (“RLG”) returned 0.9%. In contrast, the Russell 1000 Value Total Return Index returned 11.2%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
RiverPark Large Growth Fund, in their Q1 2021 investor letter, mentioned Farfetch Limited (NYSE: FTCH) and shared their insights on the company. Farfetch Limited is a British-Portuguese online luxury fashion retail platform that currently has a $16.2 billion market capitalization. Since the beginning of the year, FTCH delivered a -28.18% return, while its 12-month gains are decently up by 265.15%. As of April 20, 2021, the stock closed at $45.50 per share.
Here is what RiverPark Large Growth Fund has to say about Farfetch Limited in their Q1 2021 investor letter:
“We established a small position in e-commerce company Farfetch, which is benefitting from the secular trends of growing ecommerce, the global market for personal luxury goods, and emerging market growth, particularly in China. The company is an e-commerce platform like Amazon, Mercado Libre, or Alibaba, and is the leading online luxury fashion retail platform.
Luxury fashion has much lower online penetration than general ecommerce, and Farfetch is differentiated because of its longstanding relationships with the generally family-controlled, brand-protective luxury product companies. Because of its luxury focus, Farfetch has both higher average order values and higher take rates relative to peers, driving higher gross margins.In its recently ended fiscal 2020, Farfetch grew revenue 64% and gross profit 68%, the company should be EBITDA positive this year, and we believe the company can grow revenue more than 20% per year and EBITDA more than 50% per year for the foreseeable future. With its extremely low capital needs—capital expenditures were less than 2% of revenue last year—we expect the company’s free cash flow to grow even faster.”
Our calculations show that Farfetch Limited (NYSE: FTCH) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Farfetch Limited was in 47 hedge fund portfolios, compared to 40 funds in the third quarter. FTCH delivered a -25.20% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
