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 Farfetch Limited (NYSE: FTCH) and discussed its stance on the firm. Farfetch Limited is a London, United Kingdom-based online luxury fashion retail company with a $7.1 billion market capitalization. FTCH delivered a -42.39% return since the beginning of the year, while its 12-month returns are down by -71.04%. The stock closed at $19.26 per share on February 4, 2022.
Here is what RiverPark Large Growth Fund has to say about Farfetch Limited in its Q4 2021 investor letter:
“Farfetch: FTCH shares struggled in 2H21 as consumer behavior remains hard to forecast, supply chain disruptions continue to be elevated, and Apple’s App Tracking Transparency changes make customer outreach difficult and more expensive. Despite these headwinds, which we believe to be transitory, Farfetch still reported 28% gross merchandise volume growth, 33% revenue growth, and 43% gross profit growth.
In March, we had established a small position in this leading online luxury fashion retail platform. The company is benefitting from the secular trends of growing ecommerce, the global market for personal luxury goods, and emerging market growth, particularly in China. Luxury fashion has much lower online penetration than general ecommerce, and Farfetch is differentiated because it has developed longstanding relationships with image conscious luxury product companies. Because of this focus, Farfetch has both higher average order values and higher take rates relative to peers, driving higher gross margins. We believe the company can grow revenue and EBITDA more than 20% and 50% per year, respectively, for the foreseeable future. With its extremely low capital needs—capital expenditures were less than 2% of revenue last year—we expect the company’s free cash flow to grow even faster.”
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Our calculations show that Farfetch Limited (NYSE: FTCH) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. FTCH was in 51 hedge fund portfolios at the end of the third quarter of 2021, compared to 63 funds in the previous quarter. Farfetch Limited (NYSE: FTCH) delivered a -48.43%% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on FTCH in another article. 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.
