Distillate Capital: “Amazon (AMZN) Continues to Look Expensive”

Distillate Capital Partners LLC, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. Through the sharp sell-off in the first half of 2022, Distillate’s U.S. FSV strategy held up better than the overall market with a decline of 15.80% net of fees vs. a 19.96% decline for the S&P 500 Index. For the same period, Distillate’s Intl. FSV strategy performed roughly in line with the iShares MSCI ACWI ex-US ETF, posting a total return of -18.07% net of fees versus -18.00% for the benchmark. Meanwhile, Distillate’s U.S. SQV’s 2022 first half total return after fees of -17.22% was better than the total return for the iShares Russell 2000 ETF of -23.48% and the iShares Russell 2000 Value ETF’s total return of -17.43%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Distillate Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) and explained its insights for the company. Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle, Washington-based multinational technology company with a $1.1 trillion market capitalization. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -32.22% return since the beginning of the year, while its 12-month returns are down by -31.17%. The stock closed at $113.00 per share on September 30, 2022.

Here is what Distillate Capital has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:

“In contrast to Alphabet, Figure 14 shows the same indexed enterprise value and rolling next-twelve-month consensus estimate for free cash flow for Amazon, and highlights how Amazon’s performance has largely followed downward revisions in its estimated profitability. Consequently, Amazon continues to look expensive with a 1.7% NTM free cash flow to enterprise value yield, despite a 35% price decline in the first half of the year.”

Our calculations show that Amazon.com, Inc. (NASDAQ:AMZN) ranks 2nd on our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 252 hedge fund portfolios at the end of the second quarter of 2022, compared to 271 funds in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered a 3.14% return in the past 3 months.

In September 2022, we also shared another hedge fund’s views on Amazon.com, Inc. (NASDAQ:AMZN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.