Moon Capital Management, an investment management company, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. For the year 2022, the S&P 500 declined almost 20%, which was the largest annual decline since the 2008 Great Recession. The fund declined by approximately 7% for the same period. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Moon Capital highlighted stocks like LGI Homes, Inc. (NASDAQ:LGIH) in the Q4 2022 investor letter. Headquartered in The Woodlands, Texas, LGI Homes, Inc. (NASDAQ:LGIH) is a home builder. On January 16, 2023, LGI Homes, Inc. (NASDAQ:LGIH) stock closed at $107.23 per share. One-month return of LGI Homes, Inc. (NASDAQ:LGIH) was 9.56%, and its shares lost 22.87% of their value over the last 52 weeks. LGI Homes, Inc. (NASDAQ:LGIH) has a market capitalization of $2.497 billion.
Moon Capital made the following comment about LGI Homes, Inc. (NASDAQ:LGIH) in its Q4 2022 investor letter:
“For portfolio management reasons, we sold our stake in LGI Homes, Inc. (NASDAQ:LGIH) during the fourth quarter (at a loss.) When we initially purchased LGI Homes in March 2022, the housing market was in the late stages of one of the most robust demand environments that we have seen in more than a decade. Although builders were very clearly overearning – and impending increases in mortgage rates would throttle growth and margins – we determined that the longer-term secular growth story would temper any short-term demand declines.
Since the housing collapse of 2008, there have been roughly 12 million new households formed in the U.S., compared to only 8 million newly built single-family homes. Irrespective of higher mortgage rates, there is still an undeniable shortage of housing inventory. On average, there are roughly 2.4 million homes for sale at any given time, a million units more than the current level of approximately 1.4 million houses.
Housing prices have increased about 50% since the beginning of 2019. This, combined with a 3.2 percentage point increase in mortgage rates, has resulted in an average 80% increase in house payment for the same home compared to four years ago…” (Click here to read the full text)
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LGI Homes, Inc. (NASDAQ:LGIH) is not on our 30 Most Popular Stocks Among Hedge Funds list. As per our database, 22 hedge fund portfolios held LGI Homes, Inc. (NASDAQ:LGIH) at the end of the third quarter, which was 17 in the previous quarter.
We discussed LGI Homes, Inc. (NASDAQ:LGIH) in another article and shared the list of largest home builders in the USA. In addition, please check out our hedge fund investor letters Q4 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.
