Headwaters Capital Management, an investment management company, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund increased by +18.1% (+17.1% net) in the fourth quarter compared to a +12.8% return for the Russell Mid Cap Index. For the full year, the fund returned +34.8% (+33.0% net) compared to a +17.2% return for the index. The extraordinary strength of the fourth quarter 2023 market returns was fueled by investor optimism that inflation is moderating and the Fed’s clear signal that rate cuts are expected to start in 2024. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Headwaters Capital Management featured stocks such as Inter Parfums, Inc. (NASDAQ:IPAR) in the fourth quarter 2023 investor letter. Headquartered in New York, New York, Inter Parfums, Inc. (NASDAQ:IPAR) engages in the manufacturing and distribution of a range of fragrances and fragrance-related products. On January 18, 2024, Inter Parfums, Inc. (NASDAQ:IPAR) stock closed at $135.63 per share. One-month return of Inter Parfums, Inc. (NASDAQ:IPAR) was -5.19%, and its shares gained 20.01% of their value over the last 52 weeks. Inter Parfums, Inc. (NASDAQ:IPAR) has a market capitalization of $4.338 billion.
Headwaters Capital Management stated the following regarding Inter Parfums, Inc. (NASDAQ:IPAR) in its fourth quarter 2023 investor letter:
Buys: Inter Parfums, Inc. (NASDAQ:IPAR): Inter Parfums is a leading fragrance house that partners with prestige brands to develop, manufacture, market and distribute perfumes globally under licensing agreements. IPAR was founded in 1982 by Jean Madar and Phillipe Benacin, who collectively own 44% of the company. Both founders are still actively involved in the company with Mr. Madar serving as the CEO of IPAR’s US operations while Mr. Benacin is CEO of the European business, Inter Parfums SA (publicly traded European subsidiary that is 72% owned by IPAR). IPAR focuses on licensing agreements with prestige brands that already have a devoted brand following in categories outside of fragrances. IPAR typically targets brands with fragrances that have either been under-managed or are relatively nascent but have large growth potential via a dedicated fragrance strategy. IPAR’s top fragrance brands include Montblanc, Jimmy Choo, Coach, and Guess. Over the last 2 years, IPAR has added fragrance licenses with Ferragamo, DKNY, Lacoste and Roberto Cavalli, all of which should meaningfully contribute to revenue growth for the company going forward.
The fragrance market is a niche category that requires scale and expertise that is better outsourced to a third party than managed internally by leading brands. The cost to design, market and distribute a fragrance line is too expensive relative to the potential revenue from the product. While top fragrance brands can generate revenue of $1-2 billion, most successful fragrance brands generate revenue in the $10-200mm range. Despite the small size, category extension into fragrances can still be a lucrative business for brands and serves to enhance the value of the brand if managed correctly. As a result, prestige brands often enter into licensing agreements with dedicated fragrance houses such as IPAR to manage their fragrance category. IPAR leverages their internal expertise that is required to design, manufacture, market and distribute a single fragrance over many brands…” (Click here to read the full text)
A luxuriously decorated bedroom with textiles, mirrors and fragrance diffusers.
Inter Parfums, Inc. (NASDAQ:IPAR) is not our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Inter Parfums, Inc. (NASDAQ:IPAR) at the end of third quarter which was 23 in the previous quarter.
We discussed Inter Parfums, Inc. (NASDAQ:IPAR) in another article and shared the list of best growth stocks to buy according to billionaire Ray Dalio’s Bridgewater Associates. In addition, please check out our hedge fund investor letters Q4 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.
