Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the strategy returned 8.2% net of fees compared to the S&P 500’s 2.4% return. According to a three-factor performance attribution model, allocation and selection effects contributed positively to the portfolio’s outperformance which was partially offset by interaction effects. For similar reasons, the fourth quarter of 2024 resembled the fourth quarter of 2023. 2023 benefitted from soft landing optimism, as did 2024 which was triggered by Donald Trump’s election as the next president and a belief that fewer regulation and growth-oriented policies would be implemented. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
Patient Capital Management highlighted stocks like Peloton Interactive, Inc. (NASDAQ:PTON) in its Q4 2024 investor letter. Headquartered in New York, New York, Peloton Interactive, Inc. (NASDAQ:PTON) is an interactive fitness platform. The one-month return of Peloton Interactive, Inc. (NASDAQ:PTON) was -2.82%, and its shares gained 54.92% of their value over the last 52 weeks. On January 15, 2025, Peloton Interactive, Inc. (NASDAQ:PTON) stock closed at $8.97 per share with a market capitalization of $3.422 billion.
Patient Capital Management stated the following regarding Peloton Interactive, Inc. (NASDAQ:PTON) in its Q4 2024 investor letter:
“Peloton Interactive, Inc. (NASDAQ:PTON) took off in the fourth quarter, climbing 85.8% and up 202.1% from the lows in August. Peloton is the posterchild of a pandemic beneficiary taking advantage of lockdowns to sell people exercise equipment they could use at home. The normalization process from this heightened level of demand has pressured the stock for the last few years. However, in 2024 the company made a material pivot from a growth focus to a margin and cash flow focus. With this renewed focus on managing profitability the company successfully moved EBITDA into positive territory, improved their inventory position, and successfully refinanced their debt. The company also announced a new CEO in October, the third one in as many years, bringing a new set of eyes to reinvigorate the company. We continue to believe the value of the business lives in the high-margin, sticky subscription piece of the business.”
A trendy fitness studio with clients hopping around for a high-intensity interval training session.
Peloton Interactive, Inc. (NASDAQ:PTON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Peloton Interactive, Inc. (NASDAQ:PTON) at the end of the third quarter which was 38 in the previous quarter. In the fiscal first quarter of 2025, Peloton Interactive, Inc. (NASDAQ:PTON) generated $586 million in total revenue. While we acknowledge the potential of Peloton Interactive, Inc. (NASDAQ:PTON) 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 another article, we discussed Peloton Interactive, Inc. (NASDAQ:PTON) and shared the list of best sporting goods stocks to invest. In addition, please check out our hedge fund investor letters Q4 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.