Polen Capital on Autohome (ATHM): “We Still View the Company as Materially Undervalued”

Polen Capital, an investment management firm, published its “Polen Global Emerging Markets Growth Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. During the second quarter of 2022, the Polen Global Emerging Markets Growth Composite Portfolio (the “Portfolio”) returned -8.94% gross and -9.27% net of fees, respectively, versus the -11.44% return for the MSCI Emerging Markets Index (the “Index”).  Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Polen Global Emerging Markets Growth Fund mentioned Autohome Inc. (NYSE:ATHM) and explained its insights for the company. Founded in 2004, Autohome Inc. (NYSE:ATHM) is a China-based holding company with a $3.9 billion market capitalization. Autohome Inc. (NYSE:ATHM) delivered a 7.26% return since the beginning of the year, while its 12-month returns are down by -31.28%. The stock closed at $31.62 per share on October 05, 2022.

Here is what Polen Global Emerging Markets Growth Fund has to say about Autohome Inc. (NYSE:ATHM) in its Q2 2022 investor letter:

“Autohome is China’s leading online car classified company and one company that, in our view, was unfairly punished in reaction to China’s regulatory crackdown last year. Autohome saw a steep
decline in its share price in 2021 as most tech-related companies sold off, irrespective of the actual direct impact of regulatory changes or how cash-generative their businesses were.

While earnings of Autohome did soften during the year as the global chip shortage weighed on new car sales, we expect the company to return to the earnings growth levels it has historically delivered. The company’s 70% share price decline in 2021 left it trading on levels we considered very attractive, and we took the opportunity to increase our position earlier in the year. Despite the bounce during the quarter, we still view the company as materially undervalued.”

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Our calculations show that Autohome Inc. (NYSE:ATHM) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Autohome Inc. (NYSE:ATHM) was in 17 hedge fund portfolios at the end of the second quarter of 2022, compared to 14 funds in the previous quarter. Autohome Inc. (NYSE:ATHM) delivered a -13.89% return in the past 3 months.

In September 2021, we also shared another hedge fund’s views on Autohome Inc. (NYSE:ATHM) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

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Disclosure: None. This article is originally published at Insider Monkey.