Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” August 2023 investor letter. A copy of the same can be downloaded here. August was a relatively busy month for the Fund and persisted the portfolio’s strong fundamental performance and operating leverage. The Fund returned -0.7% net of fees and expenses for the month compared to 1.1% for its benchmark, MSCI All Country World Index Net Total Returns (AUD). In addition, please check the fund’s top five holdings to know its best picks in 2023.
Lakehouse Global Growth Fund highlighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the August 2023 investor letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products and subscriptions. On December 4, 2023, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $144.84 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 1.49%, and its shares gained 64.12% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.497 trillion.
Lakehouse Global Growth Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its August 2023 investor letter:
“The Fund’s largest position, Amazon.com, Inc. (NASDAQ:AMZN), delivered an impressive quarterly result that came in well ahead of analysts expectations. Net sales increased 11% year-on-year to $134.4 billion and operating profits increased 133% year-on-year to $7.7 billion (vs the high end of guidance at $5.5 billion). Despite fears of a slowdown, growth within their core e-commerce business proved resilient and it was particularly encouraging to see progress on the cost front drive meaningful operating leverage. Management has been laser focused on driving efficiencies across the retail operation for the last 18 months and it’s now clear that these efforts are paying off with the company reporting its highest operating margin in two years. One notable initiative has been the regionalisation of their US fulfilment network from one national network to a series of eight separate regions serving smaller geographic areas, which has already delivered a 20% reduction in the number of touches per package and a 19% reduction in miles travelled.
When it comes to the company’s second largest segment, Amazon Web Services (AWS), revenue grew 12%, which is by no means earth shattering, but it was comforting as growth is now stabilising after six quarters of deceleration led by macro-driven customer optimizations. As we have mentioned before, we have always believed the recent AWS optimisation headwinds are more cyclical in nature, as opposed to anything fundamental, and a stabilisation in growth rates combined with a more upbeat outlook are strong evidence that this is likely the case. Bigger picture, we continue to believe that the market underestimates the length of the runway ahead in the core retail business (note that e-commerce sales in the US still only make up 15% of total retail sales) and that there is still significant margin expansion ahead as scale and efficiency benefits continue to come through.”
Amazon.com, Inc. (NASDAQ:AMZN) is in second position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 286 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of third quarter which was 278 in the previous quarter.
We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared the list of best most active stocks to buy. In addition, please check out our hedge fund investor letters Q3 2023 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.
