Miller Value Partners, an investment management firm, published its “Opportunity Equity” first quarter 2022 investor letter – a copy of which can be downloaded here. Amidst the challenges, Miller Opportunity Equity’s net fees declined 3.57% in the quarter, outperforming its benchmark, the S&P 500’s -4.60% return. The Strategy’s long-term performance remains strong. Since inception annualized returns of 7.87% outpaced the S&P 500’s 7.23% by ~64 basis points annually. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Miller Value Partners Opportunity Equity mentioned Farfetch Limited (NYSE:FTCH) and explained its insights for the company. Founded in 2007, Farfetch Limited (NYSE:FTCH) is a London, United Kingdom-based luxury fashion industry with a $3.3 billion market capitalization. Farfetch Limited (NYSE:FTCH) delivered a -73.44% return since the beginning of the year, while its 12-month returns are down by -78.81%. The stock closed at $8.88 per share on May 13, 2022.
Here is what Miller Value Partners Opportunity Equity has to say about Farfetch Limited (NYSE:FTCH) in its Q1 2022 investor letter:
“Farfetch (NYSE:FTCH), which we’ve added to, exemplifies the opportunity. We see strong competitive advantages, significant growth prospects, attractive business models and no additional capital needs. Importantly, we can make very compelling valuation cases on these companies (and ALL our companies!).
We strongly believe these companies will be worth much more five years from now. Farfetch is a great example. We initially purchased it in late-2019 after the stock had fallen from $30 to $8-10 on concerns about heighted promotional activity and an acquisition (New Guards Group) the market didn’t like (but turned out well!).
Farfetch operates a global luxury marketplace, but we are most excited about the prospects for Farfetch Platform Services (FPS). FPS aims to be the digital technology backbone of the global luxury industry (think a verticalized Amazon Web Services (AWS) for luxury).
Since our initial purchase, Farfetch has made substantial progress. Harrods was the first sizeable company to officially launch on FPS in 2020. That same year, Farfetch announced a strategic deal for their China business with Alibaba and Richemont whereby those companies invested in Farfetch. Just this month, Farfetch announced a deal with Neiman Marcus Group for FPS. An FPS deal with Richemont, which the company has been negotiating for months, could come as soon as May…” (Click here to see the full text)
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Our calculations show that Farfetch Limited (NYSE:FTCH) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Farfetch Limited (NYSE:FTCH) was in 47 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 51 funds in the previous quarter. Farfetch Limited (NYSE:FTCH) delivered a -54.41% return in the past 3 months.
In February 2022, we also shared another hedge fund’s views on Farfetch Limited (NYSE:FTCH) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
