Greenhaven Road Capital, an investment management company, released its third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the Fund returned 3% net, bringing YTD net returns to 30%. The firm believes its portfolio is getting a little stronger with each passing day despite the challenges. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Greenhaven Road Capital highlighted stocks like Cellebrite DI Ltd. (NASDAQ:CLBT) in the third quarter 2023 investor letter. Headquartered in Petah Tikva, Israel, Cellebrite DI Ltd. (NASDAQ:CLBT) is a software company that develops solutions for legally sanctioned investigations. On October 31, 2023, Cellebrite DI Ltd. (NASDAQ:CLBT) stock closed at $6.68 per share. One-month return of Cellebrite DI Ltd. (NASDAQ:CLBT) was -10.46%, and its shares gained 40.93% of their value over the last 52 weeks. Cellebrite DI Ltd. (NASDAQ:CLBT) has a market capitalization of $1.318 billion.
Greenhaven Road Capital made the following comment about Cellebrite DI Ltd. (NASDAQ:CLBT) in its Q3 2023 investor letter:
“Cellebrite DI Ltd. (NASDAQ:CLBT)– Cellebrite provides tools to law enforcement to extract data (evidence) from cell phones, analyze the data, and manage the data. Solving many crimes without their tools is inconceivable. They are mission critical. One of the best indicators of business quality is pricing power. The ability to raise price only comes with attributes such as high switching costs and a limited competitive landscape. Cellebrite benefits from both, but has not aggressively flexed their pricing power to date. After being acquired by private equity, the company’s competitor, Grayshift, has reportedly been raising prices by more than 30% on select products. Cellebrite is taking more of a velvet glove approach, offering newer products with more functionality at higher prices, e.g., their “Premium” offering, which offers additional features and is, in fact, “premium” but is also 40-50% more expensive. The combination of raising prices, introducing new products, and cross-selling analytics products should fuel growth for the next several years. Extracting data from devices and making sense of it is not going to get easier nor is it going to become less mission-critical. Law enforcement needs tools to fight crime, and Cellebrite is the leading “arms dealer” to collect and review data from mobile phones.
Over the course of the quarter, Cellebrite hired an Executive Chairman from the private equity firm Vista Equity Partners. It will be interesting to see if he can apply any of the “Vista playbook” to Cellebrite operations, and if he can help put some of the $230M+ in cash that Cellebrite has on its books to work via acquisitions. At just over 3x 2024 revenue and profitable, Cellebrite is priced at a significant discount to peers, as if growth will evaporate. I suspect that, over time, growth occurs and multiple expands, or a firm like Vista Equity Partners acquires them.”
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Cellebrite DI Ltd. (NASDAQ:CLBT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Cellebrite DI Ltd. (NASDAQ:CLBT) at the end of second quarter which was 16 in the previous quarter.
We previously discussed Cellebrite DI Ltd. (NASDAQ:CLBT) in another article and shared the list of tech stocks to sell now according to Cathie Wood. In addition, please check out our hedge fund investor letters Q3 2023 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.
