If you are looking for the best ideas for your portfolio you may want to consider some of Greenhaven Road Capital‘s top stock picks. Greenhaven Road Capital, an investment management firm, is bullish on Etsy Inc (NASDAQ:ETSY) stock. In its Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Etsy Inc (NASDAQ:ETSY) stock. Etsy Inc (NASDAQ:ETSY) is an e-commerce website.
On October 13, 2019, Greenhaven Road Capital had released its Q3 2019 investor letter. Etsy Inc (NASDAQ:ETSY) stock has posted a return of 224% in the trailing one year period, outperforming the S&P 500 Index which returned 15.4% in the same period. This suggests that the investment firm was right in its decision.
Greenhaven’s fund posted a return of less than 1% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.7% in the same quarter. Let’s take a look at comments made by Greenhaven Road Capital about Etsy Inc (NASDAQ:ETSY) in the Q3 2019 investor letter.
“Our “bet” on Etsy (ETSY) is also one on status quo/trend continuation. The thesis is that Etsy will remain a viable niche alternative to Amazon and will continue to improve the monetization of their two-sided marketplace. Our bet on Digital Turbine (APPS) is that they will continue growing their distribution channel for apps on smart phones, particularly for slots controlled by carriers. If successful, we will see the number of devices and revenue per device continue to improve. KKR, Etsy, and Digital Turbine are all asset-light businesses where additional growth will not require raising additional capital, and they should benefit from operating leverage such that their margins should improve as their revenues grow. Thus, even in a “status quo” scenario, the underlying economics should improve and there is not a reliance on the capital markets to get there. They are in control of their own destinies.
It is worth highlighting that while KKR, Etsy, and Digital Turbine are all “bets” on the status quo, they are different in that KKR’s end market is institutional investors, Etsy deals with small merchants and consumers, and Digital Turbine deals with cell phone carriers and large companies with apps. These different end markets also all have different dynamics and are largely independent.”
This isn’t the first time Greenhaven Road Capital talked about Etsy Inc (NASDAQ:ETSY) favorably either. The investment firm has been a long time Etsy Inc (NASDAQ:ETSY) bull. In August 2020, we shared Greenhaven Road Capital’s bullish Etsy Inc (NASDAQ:ETSY) thesis in this article.
In Q2 2020, the number of bullish hedge fund positions on Etsy Inc (NASDAQ:ETSY) stock increased by about 13% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Etsy’s growth potential. Our calculations showed that Etsy Inc (NASDAQ:ETSY) isn’t ranked among the 30 most popular stocks among hedge funds.
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Video: Top 5 Stocks Among Hedge Funds
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Disclosure: None. This article is originally published at Insider Monkey.