Is it Time to Consider Selling Your Zillow Group (ZG) Stake?

Rowan Street Capital LLC, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be seen here. The past two quarters have been difficult for all growth investors and certainly for Rowan Street partners. COVID reopening, inflation, the threat of a rapid increase in interest rates as well as the war going on in Europe all contributed to a very rapid market rotation out of growth stocks, which were the darlings of the 2020-21 time period. These types of rotations and corrections are normal and to be expected from time to time. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Rowan Street Capital mentioned Zillow Group, Inc. (NASDAQ:ZG) and explained its insights for the company. Founded in 2014, Zillow Group, Inc. (NASDAQ:ZG) is a Seattle, Washington-based online real-estate marketplace company with a $12.0 billion market capitalization. Zillow Group, Inc. (NASDAQ:ZG)  delivered a -25.09% return since the beginning of the year, while its 12-month returns are down by -64.60%. The stock closed at $46.61 per share on April 19, 2022.

Here is what Rowan Street Capital has to say about Zillow Group, Inc. (NASDAQ:ZG) in its Q1 2022 investor letter:

“Zillow (NASDAQ:ZG): we have owned this stock since 2019 and decided to sell our entire position in November 2021 after a material change in its business model and vision for the company was announced in their Q3 ‘21 earnings report. Even though this company has a very talented management team with a strong track record of success, our original investment thesis in the company broke down. All-in-all, we ended up breaking even on this investment.”

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Our calculations show that Zillow Group, Inc. (NASDAQ:ZG) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Zillow Group, Inc. (NASDAQ:ZG) was in 61 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 67 funds in the previous quarter. Zillow Group, Inc. (NASDAQ:ZG) delivered a -12.21% return in the past 3 months.

In January 2022, we also shared another hedge fund’s views on Zillow Group, Inc. (NASDAQ:ZG) 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.