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 Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter. Headquartered in Ottawa, Canada, Shopify Inc. (NYSE:SHOP) provides a cloud-based commerce platform and services. The one-month return of Shopify Inc. (NYSE:SHOP) was -0.46%, and its shares gained 32.04% of their value over the last 52 weeks. On January 24, 2024, Shopify Inc. (NYSE:SHOP) stock closed at $107.68 per share with a market capitalization of $138.797 billion.
Rowan Street Capital stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter:
“Shopify Inc. (NYSE:SHOP): Investment Initiated: February 2022
Internal Rate of Return (IRR): 23%
Our IRR for Shopify aligns closely with the growth in revenues and gross profits the company has delivered over the past three years since we first purchased it in February 2022 (as shown in the table below). However, the path to achieving this return has been far from smooth-as is often the case with investments.
In fact, for the first 2.5 years of holding Shopify, our position generated little to no return. Nearly all of the gains have come within the past six months. This illustrates a fundamental principle of long-term investing: the longer your holding period, the more closely your returns will reflect the underlying fundamentals of the business…” (Click here to read the full text)
Shopify Inc. (NYSE:SHOP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Shopify Inc. (NYSE:SHOP) at the end of the third quarter which was 56 in the previous quarter. Shopify Inc.’s (NYSE:SHOP) third quarter revenue was $2.2 billion, up 26% year-over-year. While we acknowledge the potential of Shopify Inc. (NYSE:SHOP) 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 Shopify Inc. (NYSE:SHOP) and shared the list of best SaaS stocks to invest in. In addition, please check out our hedge fund investor letters Q3 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.