Choice Equities Capital Management, a hedge fund manager, recently released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund lost -5.8% on a net basis bringing year-to-date gain to +7.5% compared to the Russell 2000’s -3.3% loss for the quarter and +1.7% gain for YTD. Since its inception in 2017, the fund has generated annualized gains of +13.5% versus +7.1% and +14.6% returns for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Choice Equities Fund highlighted stocks like Magnite, Inc. (NASDAQ:MGNI), in the second quarter 2024 investor letter. Magnite, Inc. (NASDAQ:MGNI) operates an independent omnichannel sell-side advertising platform. The one-month return of Magnite, Inc. (NASDAQ:MGNI) was 6.75%, and its shares lost 1.69% of their value over the last 52 weeks. On July 31, 2024, Magnite, Inc. (NASDAQ:MGNI) stock closed at $14.54 per share with a market capitalization of $2.036 billion.
Choice Equities Fund stated the following regarding Magnite, Inc. (NASDAQ:MGNI) in its Q2 2024 investor letter:
“Magnite, Inc. (NASDAQ:MGNI) – Portfolio holding Magnite is worth a deeper dive given the impressive list of customer wins the company has been announcing of late. Streaming players like Roku, Telus, Media Ocean and, most importantly, Netflix have all chosen Magnite to serve as their sole SSP (Supply Side Platform) to sell their ad inventory programmatically. The recent wins (which add to existing relationships with the likes of AMC Networks, DISH Media, Disney Advertising, FOX Corporation, FuboTV, LG Ads Solutions, VIZIO, and Warner Bros. Discovery) highlight the strength of Magnite’s offering within the Connected TV (CTV) value chain as the largest independent – and unbiased – supply side ad exchange in the world. Though the wins have come in bunches lately, establishing this advantaged competitive position was not something that happened overnight, as CEO Michael Barrett has employed savvy, strategic acquisitions of CTV supply side peers Telaria (2020), SpotX (2021) and SpringServe (2021) to bolster this position. (More on our original views of Michael Barrett and his early moves at The Rubicon Project (which is now known as Magnite) can be found in the Appendix and here in our 4Q 2018 letter when we originally profiled our investment in The Rubicon Project.)
The timing of the wins, all announced just this year, also highlights the pace of adoption of the ad-paid model in streaming TV. With the average American household subscribing to four streaming services per month, too many people have too many streaming subscriptions. As consumers grow tired of subscribing to four (or more) platforms and paying four sets of monthly subscription fees to four different service providers, many are increasingly opting out of the subscription model and opting in to a streaming model subsidized by paid ads. As a result, ads are coming to streaming and look likely to emerge as the dominant means of monetization for television of the future, much in the way ads have been the primary driver of economics in linear television for decades. Only in the case of CTV, particularly where user data can be leveraged to match more specific ads to various users’ likely interests, ads can be targeted and their impacts better measured than in the linear channels of old suggesting one day down the road the CTV ad market could meaningfully exceed what was once a mammoth sized linear TV ad market…” (Click here to read the full text)
A marketing manager examining a publisher’s digital inventory on a laptop.
Magnite, Inc. (NASDAQ:MGNI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Magnite, Inc. (NASDAQ:MGNI) at the end of the first quarter which was 21 in the previous quarter. In the first quarter Magnite, Inc. (NASDAQ:MGNI) reported $149 million in total revenue, up 15% from Q1 2023. While we acknowledge the potential of Magnite, Inc. (NASDAQ:MGNI) 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 Magnite, Inc. (NASDAQ:MGNI) and shared the list of best marketing stocks to buy. 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.
