4. Carvana Co. (NYSE: CVNA)
Coleman’s Stake Value: $1,577,787,000
Percentage of Chase Coleman’s 13F Portfolio: 3.62%
Number of Hedge Fund Holders: 64
Carvana Co. (NYSE: CVNA) is an online used car retailer. The company was founded in 2012 and is ranked fourth on the list of Tiger Global’s top 10 stocks picks. Carvana shares have returned 90.89% to investors over the past year. The stock is up 26.11% since March 31.
On July 28, Wells Fargo analyst Zachary Fadem raised the price target on Carvana Co. (NYSE: CVNA) to $385 from $360 and maintained an “Overweight” rating on the shares. On June 30, the company announced that it is expanding its footprint in Kansas and will now provide residents of the Wichita area, with as-soon-as-next-day touchless home delivery.
Customers can browse more than 30,000 used automobiles for sale, apply for auto financing or utilize the car loan calculator, buy, trade-in, and schedule next-day vehicle delivery. On May 6, Carvana Co. (NYSE: CVNA) declared earnings for the first quarter of 2021. It reported earnings per share of -$0.46, beating the estimates by $0.21. The revenue for the first three months of 2021 was over $2 billion, up 104.5% YoY, beating the estimates by $300 million.
Tiger Global Management LLC holds 6.01 million shares in Carvana Co. (NYSE: CVNA), worth over $1.58 billion, representing 3.62% of their portfolio. In addition, hedge fund sentiment increased for Carvana in the first quarter of 2021. Insider Monkey’s data shows that 64 elite hedge funds held stakes in the company at the end of the first quarter, up from 63 funds a quarter earlier.
Steel City Capital, in its first quarter 2021 investor letter, mentioned Carvana Co. (NYSE: CVNA). Here is what the fund said:
“Carvana’s (CVNA) 4Q’20 results weren’t particularly great. EBITDA was negative ($70) million, a stark turnaround on a sequential basis from a first-ever EBITDA profit of $21 million in 3Q’20. The culprit was a steep drop off in retail unit GPU ($1,265 vs. $1,857) and wholesale unit GPU ($358 vs. $1,113) as some of the COVID-driven aberrations in the used car market began to abate.
The company’s presentation of EBITDA (calculated “bottom up”) is dubious, as it commingles non-operating items including mark-to-market changes in its retained securitization portfolio. With the exception of 1Q’20, when ABS markets were going haywire, this line item provided a tailwind throughout 2020, including a gain of $5 million in 4Q’20. Also on the non-operating self-help front, management released a reserve for vehicle service contract cancellations in 4Q’20, adding another $7 million to EBITDA, and boosting “Other” GPU by $96.
Putting it all together, I put operating EBITDA closer to negative ($82) million vs. the $70 million printed by the company. This is a larger loss than 4Q’19 (calculated on a similar operating basis) despite the company selling 43% more retail units y/y!…” (Click here to see the full text)
