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%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
RiverPark Large Growth Fund, in its Q4 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 $12.3 billion market capitalization. ZG delivered a -23.27% return since the beginning of the year, while its 12-month returns are down by -70.85%. The stock closed at $47.74 per share on February 4, 2022.
Here is what RiverPark Large Growth Fund has to say about Zillow Group, Inc. in its Q4 2021 investor letter:
“Zillow: ZG shares declined, as the company announced its decision to exit its Offers business (home buying and selling). Although the stock reacted poorly to this news, we view the exit of this capital intensive and potentially volatile home buying business positively. While there was certainly option value in the home buying segment, we have always believed that the company’s high-margin IMT (Internet, Media and Technology) Segment had terrific long-term growth drivers and, given its high margins and relatively low capital needs, was extremely valuable. The IMT segment alone should generate more than $600 billion of EBITDA this year on just under $2 billion of revenue and generate several hundred million dollars of free cash flow annually. Going forward, we believe the company’s IMT segment will continue its high-margin, doubledigit growth (last year IMT revenue and EBITDA grew 33% and 83%, respectively) and will retain its position as the leading digital media site for all things residential real estate. Despite it being a substantially lower margin and more capital-intensive business model, the home buying business has overshadowed the media segment in recent years and in the minds of many investors and analysts. With what will be a clean and cash-rich balance sheet following the exit of its current homes inventory, we believe that a media-focused Zillow is substantially undervalued at its current price.”
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Our calculations show that Zillow Group, Inc. (NASDAQ: ZG) failed to obtain a mark on 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 -27.85% return in the past 3 months.
You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
