Here’s Why Arch Capital Remains Optimistic in Dropbox (DBX)

Arch Capital Management, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. As with most portfolios with no short exposure, the Arch Capital Fund has dipped into the red in 2022. The fund has a mix of both types of companies in our portfolio, given our agnosticism towards so-called “growth” or “value” stocks. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Arch Capital mentioned Dropbox, Inc. (NASDAQ:DBX) and explained its insights for the company. Founded in 2007, Dropbox, Inc. (NASDAQ:DBX) is a San Francisco, California-based file hosting service provider with an $8.3 billion market capitalization. Dropbox, Inc. (NASDAQ:DBX) delivered a -7.82% return since the beginning of the year, while its 12-month returns are down by -26.77%. The stock closed at $22.62 per share on August 24, 2022.

Here is what Arch Capital has to say about Dropbox, Inc. (NASDAQ:DBX) in its Q2 2022 investor letter:

“n March, we decided to buy Dropbox with some of our cash position. We had sold the stock in 2021 due solely to valuation concerns, but with the stock cratering in early 2022, we decided to revisit the company. It turns out, the business was still as strong as ever. If you want more detail on why we like Dropbox, you can read our report from back in Q1 here.”

Photo by Austin Distel on Unsplash

Our calculations show that Dropbox, Inc. (NASDAQ:DBX) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Dropbox, Inc. (NASDAQ:DBX) was in 32 hedge fund portfolios at the end of the second quarter of 2022, compared to 44 funds in the previous quarter. Dropbox, Inc. (NASDAQ:DBX) delivered a 13.55% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Dropbox, Inc. (NASDAQ:DBX) 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.