5 Value Arbitrage Stocks Sabrepoint Capital is Buying

4. SEMrush Holdings, Inc. (NYSE:SEMR)

Sabrepoint Capital bought 88,954 shares of SEMrush Holdings, Inc. (NYSE:SEMR) during the September quarter, adding onto the large position in the company it opened a quarter earlier. The fund had an 8.24% ownership stake in SEMR as of September 30, owning 889,698 shares. 19 hedge funds were long SEMR at the end of Q1 following the software provider’s IPO, but that figure crashed to just 7 a quarter later and stood at 10 at the end of September.

SEMrush Holdings, Inc. (NYSE:SEMR) grew revenue by 35.6% year-over-year in 2020, hitting $124.9 million, while growing its customers by just under 25% to 67,000. Perhaps most impressive is the company’s ability to have grown to its current heights through raising just $37 million, highlighting the efficiency of both the company’s offerings (with gross margin coming in at 76% during 2020) and its management team.

ClearBridge Investments, an investment management firm, published its “Small Cap Growth Strategy” first quarter 2021 investor letter and mentioned SEMrush Holdings, Inc. (NYSE:SEMR). Here‘s what the fund said:

“We established seven new positions during the quarter, (including SEMrush) largely financed through trims in existing holdings whose market values have risen. Four of the additions play roles in the accelerating digital transformation of the sales, marketing and customer development processes. SEMrush, in the IT sector, is a software provider that help clients optimize their marketing spend across digital search and social media platforms.”