Hayden Capital, an investment management firm, published its third-quarter 2022 investor letter – a copy of which can be seen here. The portfolio accelerated by 18.9% at the end of the third quarter of 2022, outperforming the 4.9% return of the S&P 500 and the 7.2% return of the MSCI World index. Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.
In its Q3 2022 investor letter, Hayden Capital mentioned SmartRent, Inc. (NASDAQ:SMRT) and explained its insights for the company. Founded in 2017, SmartRent, Inc. (NASDAQ:SMRT) is a Scottsdale, Arizona-based enterprise smart home automation company with a $454.2 billion market capitalization. SmartRent, Inc. (NASDAQ:SMRT) delivered a -76.34% return since the beginning of the year, while its 12-month returns are down by -77.42%. The stock closed at $2.29 per share on December 12, 2022.
Here is what Hayden Capital has to say about SmartRent, Inc. (NASDAQ:SMRT) in its Q3 2022 investor letter:
“Earlier this year, we initiated a position in SmartRent. SmartRent is the leading “smart home operating system” software provider for multifamily owners and operators in the United States. Its primary products include smart access keyless entry, smart thermostats / climate control, and water leak detection. Other offerings include self- guided tours for prospective renters to view available units, resident & staff management software (Sightplan), and parking management for operators to easily manage resident and guest parking.
Key to note, is that the company doesn’t make any of the hardware itself (except for the central control unit – SmartHub / FusionHub), instead opting to partner with hardware manufacturers such as Assa Abloy (OTCPK:ASAZF), Honeywell (HON), Google (GOOG, GOOGL) , LG, Amazon (AMZN), etc. At its core, this is a high-margin software company, that also installs 3rd party hardware in order to generate software revenues.
The company was originally founded by Lucas Haldeman, who was the former Chief Technology Officer at Colony American Homes, one of the largest single family rental owners in the United States. After struggling to find a comparable technology solution to allow more efficient property management, Lucas founded Smartrent in 2017 to address these needs.
Over the last five years, we’ve seen the product resonate greatly in the industry, with the largest real estate owners and public REITs signing on as early adopters. In just a few years, the technology has been deployed across ~504K units nationwide, with another ~811K units committed by customers to be deployed in the next 2 years. These existing customers also own an additional ~5.4M units within their portfolios (out of an estimated potential addressable market of ~21M units in the US).
These owners are seeing ~20 – 50% ROIs on their capex spend, through a combination of increasing rents (as tenants are willing to pay more to live in a tech-enabled unit) and operational efficiencies. Because of this strong return profile, many of these customers have already publicly announced that they intend to roll out the solution for the majority of their portfolio over the next few years33.
In another sign of the customer’s appreciation for the product, SmartRent has never lost a customer in its history (i.e. 0% churn), while having grown its Annual Recurring Revenue (ARR) by ~10x in the last two years…” (Click here to see the full text)
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Our calculations show that SmartRent, Inc. (NASDAQ:SMRT) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. SmartRent, Inc. (NASDAQ:SMRT) was in 12 hedge fund portfolios at the end of the second quarter of 2022, compared to 9 funds in the previous quarter. SmartRent, Inc. (NASDAQ:SMRT) delivered a -16.12% return in the past 3 months.
In November 2022, we also shared another hedge fund’s views on SmartRent, Inc. (NASDAQ:SMRT) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.
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Disclosure: None. This article is originally published at Insider Monkey.
