Farrer Wealth Advisors, an investment management firm, published its “Farrer Wealth Managed Solution” first quarter 2022 investor letter – a copy of which can be downloaded here. This quarter was tough on the managed solution, and while the fund always expected its portfolio would suffer 30%+ drawdowns at some stage, they never thought it would be in the first nine months of launching. The benchmark bottomed on 8th March, and since then has returned 8.90% whereas our Managed Solution has returned 15.67% (the below in USD; 8th March to 1st April 2022). Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Farrer Wealth Advisors 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 e-commerce company with a $1.4 trillion market capitalization. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -13.27% return since the beginning of the year, while its 12-month returns are down by -16.60%. The stock closed at $2,891.93 per share on April 28, 2022.
Here is what Farrer Wealth Advisors has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon: We had a medium-sized position in Amazon which we exited after the company released its earnings. We thought earnings on aggregate were just fine and were especially impressed to see AWS (Amazon Web Services) start to reaccelerate its growth, up nearly 40% yoy. However, looking beneath the hood a little bit, we noticed a significant slowdown in the 1P and 3P ecommerce businesses that enjoyed a nice covid-bump in previous quarters. The international business also saw negative yoy growth as the covid bump deflated and competition heat up in markets such as Southeast Asia, Latin America, and India. None of these issues individually were a huge cause for concern, but they did force us to lower our internal projections. Given this, we felt the internal rate of return (“IRR”) baked into the price post-earnings was not particularly attractive given other opportunities available, and so, we exited the position. None of this is to say that Amazon is in any trouble, and we believe current investors will do just fine over time. We remain big fans of the companies and think Prime and AWS may be some of the best businesses ever created, so we reserve the right to buy back the position at cheaper valuations (or at a higher potential IRR).”
Our calculations show that Amazon.com, Inc. (NASDAQ:AMZN) ranks 1st on our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 279 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 242 funds in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered a 0.43% return in the past 3 months.
In April 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 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.