Rowan Street Capital, an investment management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. 2024 was an excellent year for Rowan Street, with the fund achieving a net gain of +56.6% outperforming the S&P 500’s +25.0% total return. Rowan Street’s recent achievements highlight the strength of its refined investment strategy and the core values that drive all of its efforts. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Rowan Street Capital highlighted stocks like Spotify Technology S.A. (NYSE:SPOT) in the fourth quarter 2024 investor letter. Headquartered in Luxembourg City, Luxembourg, Spotify Technology S.A. (NYSE:SPOT) offers audio streaming subscription services. The one-month return of Spotify Technology S.A. (NYSE:SPOT) was 11.82%, and its shares gained 138.20% of their value over the last 52 weeks. On January 24, 2024, Spotify Technology S.A. (NYSE:SPOT) stock closed at $510.43 per share with a market capitalization of $103.147 billion.
Rowan Street Capital stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q4 2024 investor letter:
“Spotify Technology S.A. (NYSE:SPOT): Investment Initiated: May 2018
Internal Rate of Return (IRR): 14%
IRR for Spotify, while solid, has been influenced by the timing and size of our investments. Over the past six years, th company has achieved exceptional growth in users, revenues, and gross profits-as highlighted in the chart below. However, our IRR does not fully reflect this growth due to the cash flows involved in building our position.
We began buying Spotify shares in 2018 at an initial cost basis of $135 per share but continued to add to the position over the years, ultimately raising our average cost basis to $216 per share. Had we maintained our initial cost basis, the IRR on this investment would have been closer to 22%, which better aligns with Spotify’s fundamental growth in key metrics such as Monthly Active Users (MAU), revenues, and gross profits…” (Click here to read the full text)
A person wearing headphones listening to an audio streaming service.
Spotify Technology S.A. (NYSE:SPOT) is in 25th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 98 hedge fund portfolios held Spotify Technology S.A. (NYSE:SPOT) at the end of the third quarter which was 88 in the previous quarter. While we acknowledge the potential of Spotify Technology S.A. (NYSE:SPOT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Spotify Technology S.A. (NYSE:SPOT) and shared the list of hottest mega-cap stocks of 2025. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.