RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned -3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, while the Morningstar Large Growth Category returned -0.07%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
RiverPark Large Growth Fund, in its Q3 2021 investor letter, mentioned Zillow Group, Inc. (NASDAQ: ZG) and discussed its stance on the firm. Zillow Group, Inc. is a Seattle, Washington-based online real estate marketplace company with a $13.8 billion market capitalization. ZG delivered a -60.45% return since the beginning of the year, while its 12-month returns are down by -51.62%. The stock closed at $53.77 per share on December 02, 2021.
Here is what RiverPark Large Growth Fund has to say about Zillow Group, Inc. in its Q3 2021 investor letter:
“ZG was our final top detractor for the quarter, as the real estate market has shown signs of seasonal cooling and inventory shortages, which have limited transactions after the peak spring buying season. Existing home sales rose 23% on a seasonally adjusted annual rate (SAAR) for June, a deceleration from May’s 44% rise, and year-over-year growth should continue to decline due to difficult comparisons to the robust growth of the U.S. housing market
in 2H20. However, for-sale inventory has increased over the past two months, which could lead to higher existing home sales.With its number one ranking in real estate brand awareness, and more than 200 million monthly unique users and 10 billion visits last year to its mobile apps and websites, Zillow is the leader in online real estate. The company has historically focused on the $20 billion real estate advertising market through its IMT segment but is now also targeting the more than $2 trillion home transaction and related services market in its Homes and Mortgages segments. Just as the internet disrupted industries such as travel bookings, job search, home movie viewing, and car purchasing, Zillow is disrupting residential real estate by radically simplifying real estate transactions, including inspections, appraisals, title, insurance, mortgages, and buying and selling. Zillow co-founder and CEO Rich Barton has deep experience in disrupting industries, having founded Expedia and co-founding Glassdoor (Rich is also on the board of Netflix).
Zillow’s growing, high margin, high cash flow media business (its IMT segment generated $556 billion of EBITDA on $1.5 billion of revenue last year) is funding the explosive growth of its internet-disrupting Homes and Mortgages segments, which have grown from zero in 2017 to $1.9 billion revenue last year. The two businesses work synergistically to provide Zillow with scale and data advantages, as well as low customer acquisition costs. We believe the company’s IMT segment will continue its high-margin, double-digit growth (last year IMT revenue and EBITDA grew 33% and 83%, respectively) and its Homes and Mortgages segment growth will accelerate post-COVID, with margins turning from negative to positive as the business scales.”
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Based on our calculations, Zillow Group, Inc. (NASDAQ: ZG) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ZG was in 67 hedge fund portfolios at the end of the third quarter of 2021, compared to 76 funds in the previous quarter. Zillow Group, Inc. (NASDAQ: ZG) delivered a -45.48% return in the past 3 months.
Disclosure: None. This article is originally published at Insider Monkey.
