Hayden Capital, an investment management firm, released its second-quarter 2024 investment letter. A copy of the letter can be downloaded here. Driven by the core positions, the portfolio rose in the past few months. The firm is currently seeing signs of market stabilization following the erratic macroeconomic environment of the past few years. In the second quarter, the portfolio generated a 7.0% return compared to a 4.3% return for the S&P 500 and a 2.9% return for the MSCI World Index. The firm’s assets are invested in Asia at approximately 57%, in North America at approximately 41%, and the remainder in cash. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Hayden Capital highlighted stocks like PDD Holdings Inc. (NASDAQ:PDD), in the second quarter 2024 investor letter. PDD Holdings Inc. (NASDAQ:PDD) a multinational commerce group that operates through Pinduoduo, an e-commerce platform and Temu, an online marketplace. The one-month return of PDD Holdings Inc. (NASDAQ:PDD) was -35.54%, and its shares lost 5.71% of their value over the last 52 weeks. On September 6, 2024, PDD Holdings Inc. (NASDAQ:PDD) stock closed at $92.68 per share with a market capitalization of $129.572 billion.
Hayden Capital stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q2 2024 investor letter:
“PDD Holdings Inc. (NASDAQ:PDD): A few weeks ago, Latepost (a leading Chinese technology news outlet) confirmed Pinduoduo’s online grocery initiative is solidly profitable (LINK). According to the article, Duoduo Grocery is able to achieve ~5% net profit margins in competitive markets (where they go up against Meituan Select). In non-competitive markets, they can achieve ~10 – 15% net margins.
The company doesn’t disclose the exact scale of Duoduo Grocery, but our calculations indicate it’s likely around ~RMB 300BN this year, and still growing in the double-digits. At that level, the division is likely contributing ~US $2.5BN in annual profits.
It’s an impressive result, but admittedly, not a huge needle-mover in light of the total $17.6BN net profits the company is expected to make this year (~14% of overall profits)…” (Click here to read the full text)
A close-up of a customer using the company’s e-commerce platform whilst shopping online.
PDD Holdings Inc. (NASDAQ:PDD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 86 hedge fund portfolios held PDD Holdings Inc. (NASDAQ:PDD) at the end of the second quarter which was 76 in the previous quarter. In the second quarter, PDD Holdings Inc.’s (NASDAQ:PDD) revenue increased 86% year-over-year to RMB97.1 billion. While we acknowledge the potential of PDD Holdings Inc. (NASDAQ:PDD) 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 PDD Holdings Inc. (NASDAQ:PDD) and shared the list of most undervalued 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.
