Jackson Square Partners, an investment management firm, released its “SMID-Cap Growth” Q3 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy returned -7.21% (net), compared to a -0.12% for its benchmark, the Russell 2500 Growth Index. The most significant performance contributor during the quarter was information technology sector, while the healthcare sector detracted from performance. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Jackson Square Partners highlighted stocks like Wix.com Ltd. (NASDAQ:WIX) in its Q3 2022 investor letter. Headquartered in Tel Aviv, Israel, Wix.com Ltd. (NASDAQ:WIX) is a cloud-based platform provider for website design. On December 21, 2022, Wix.com Ltd. (NASDAQ:WIX) stock closed at $81.19 per share. One-month return of Wix.com Ltd. (NASDAQ:WIX) was -4.32%, and its shares lost 50.15% of their value over the last 52 weeks. Wix.com Ltd. (NASDAQ:WIX) has a market capitalization of $4.773 billion.
Jackson Square Partners made the following comment about Wix.com Ltd. (NASDAQ:WIX) in its Q3 2022 investor letter:
“Perhaps most emblematic of both trends is Wix.com Ltd. (NASDAQ:WIX), a dominant player in subscription-based web site design. Wix was one of the biggest beneficiaries of COVID as physical businesses suddenly needed a virtual, on-line presence to deal with the mandated closures of physical business locations. Because Wix customers have a long and predictable lifetime value, management had been – properly in our opinion – aggressively reinvesting to grow subscriber cohorts and their top line. While COVID “pulled forward” future customer acquisitions, the revenue base is recurring off a much higher post-COVID base. Despite this, Wix stock has corrected below even its prepandemic level. This makes little sense for an annuity-like business model. We have been in active dialogue with management and the Wix board in recent months, focused on:
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From a business optimization standpoint, we have urged the company to focus on demonstrating inherent marginal economics of the business by focusing on profitability instead of maximizing top-line growth. In response, the company put out eminently achievable targets, in our opinion, of $500M in free cash flow on a revenue target of $2.5B for 2025. Based on our analysis, this equates to a 10%+ free cash flow yield on the current equity base…” (Click here to read the full text)
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Wix.com Ltd. (NASDAQ:WIX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Wix.com Ltd. (NASDAQ:WIX) at the end of the third quarter, which was 24 in the previous quarter.
We discussed Wix.com Ltd. (NASDAQ:WIX) in another article and shared Baron Funds’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 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.
