Rowan Street Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund generated a +26.2% (net of fees) return in the first half of the year surpassing the +15.3% return for the S&P 500 index in the same period. The fund has generated a net return of +43.2% over the past 12 months, ending June 30. This figure outperforms the S&P 500’s +24.6% return. 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 second 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 -5.17%, and its shares gained 104.73% of their value over the last 52 weeks. On September 6, 2024, Spotify Technology S.A. (NYSE:SPOT) stock closed at $322.77 per share with a market capitalization of $64.815 billion.
Rowan Street Capital stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q2 2024 investor letter:
“Back in our 2022 year-end letter, we highlighted Spotify Technology S.A. (NYSE:SPOT), which was trading at roughly $15 billion at the time. We asked the question: “Does this valuation make any sense?” Now, just 18 months later, Spotify is valued at about $68 billion — a 4.3x increase. To put this in perspective, we initially estimated a valuation of about $70 billion by 2025, and it seems we got there a bit faster than anticipated. Spotify went public in 2018 at a price of $132 per share. We began purchasing shares that same year and continued to add to our position as the stock appreciated.
Today, Spotify trades at $337 per share, reflecting a total return of 155% since its IPO, or about 16% annually — quite a respectable performance. However, our average cost basis is $216, as we increased our position as the stock rose. As a result, the stock return from that cost basis stands at 58%. While it’s somewhat disappointing in comparison to the overall gain since the IPO, we remain confident in the position we’ve built, given the company’s strong long-term growth and profitability potential…” (Click here to read the full text)
A person wearing headphones listening to an audio streaming service.
Spotify Technology S.A. (NYSE:SPOT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. A As per our database, 88 hedge fund portfolios held Spotify Technology S.A. (NYSE:SPOT) at the end of the second quarter which was 77 in the previous quarter. Spotify Technology S.A.’s (NYSE:SPOT) total revenue for the second quarter increased by 21% year over year on a constant currency basis to €3.8 billion. 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 Baron Focused Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 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.
