Minot Light Capital, an investment management firm, recently released its fourth-quarter 2024 investor letter. A copy of the same can be downloaded here. This is the first partner update of Minot Light Capital after the fund’s launch on October 1, 2024. The partnership gained 6.9% gross/5.2% net in the quarter versus 2.4% for the S&P 500 total return index and 0.3% for the Russell 2000. The firm is pleased to see positive relative performance of the fund in both up and down markets over the market’s turbulent quarter. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Minot Light Capital highlighted stocks like MYT Netherlands Parent B.V. (NYSE:MYTE), in the fourth quarter 2024 investor letter. MYT Netherlands Parent B.V., through its subsidiary, Mytheresa Group GmbH, offers a luxury e-commerce platform for fashion consumers. The one-month return of MYT Netherlands Parent B.V. (NYSE:MYTE) was 31.30%, and its shares gained 210.03% of their value over the last 52 weeks. On January 23, 2024, MYT Netherlands Parent B.V. (NYSE:MYTE) stock closed at $9.27 per share with a market capitalization of $790.416 million.
Minot Light Capital stated the following regarding MYT Netherlands Parent B.V. (NYSE:MYTE) in its Q4 2024 investor letter:
“MYT Netherlands Parent B.V. (NYSE:MYTE) is currently our partnership’s largest holding and is poised to become a leading curated digital platform for high-end luxury fashion. The company has executed in a consistent and thoughtful manner throughout a meaningful consumer and luxury downturn over the past few years, which has led to a more rational competitive environment. However, the stock has become our largest position due to a game-changing acquisition of YOOX NET-A-PORTER (YNAP) from Richemont (SWX: CFR). For a variety of reasons, Richemont was highly motivated to divest YNAP, and MyTheresa was the only logical and willing acquirer due to the substantial synergies it could bring to the transaction. When the deal was announced, we had a small position in MYTE and it’s market cap was about $340mm (85mm S/O at $4.00/share) with about $15mm of net debt on it’s balance sheet. In exchange for taking on YNAP, Richemont put a cash position of 550mm Euros and no debt on YNAP’s balance sheet, provided a 100mm Euro revolving credit facility to YNAP/MyTheresa, and took a 33% equity stake in the pro-forma combined company.
Hence, in exchange for the issuance of about 42mm shares to Richemont ($172mm of value at the time of deal announcement), MYTE was able to acquire the highly synergistic Net-a-Porter and Mr. Porter luxury marketplaces that had a combined 1.2bln Euros of GMV (vs MYTE’s GMV of about 900mm Euros), the 900mm Euro GMV Yoox and Outnet discount marketplaces, and 550mm Euros of cash. The Net-a-Porter and Mr. Porter brands are currently profitable and should become even more so post-synergies when combined with MyTheresa. The outlet brands (Yoox & Outnet) are currently burning cash, which is the main reason Richemont provided MYTE with 550mm Euros on the transaction. We believe management will determine relatively quickly whether it can turn around the outlet business. If not, we think MyTheresa will shut down that entire business and can likely do so well before burning the 550mm Euro cash position…” (Click here to read the full text)
A smartly dressed woman browsing a selection of designer clothing in an upscale retail store.
MYT Netherlands Parent B.V. (NYSE:MYTE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held MYT Netherlands Parent B.V. (NYSE:MYTE) at the end of the third quarter which was 5 in the previous quarter. In the fiscal first quarter of 2025, MYT Netherlands Parent B.V.’s (NYSE:MYTE) net sales increased 7.6% year-over-year to EUR201.7 million. While we acknowledge the potential of MYT Netherlands Parent B.V. (NYSE:MYTE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.