Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In the quarter the fund returned 14.43% (net) compared to 14.16% for the Russell 1000 Growth Index and 11.69% for the S&P 500 Index. For the full year, the fund returned 38.99% (net) compared to 42.68% and 26.29% returns for the indexes. The firm had the second-highest return in the Portfolio’s 35-year history in 2023. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Polen Focus Growth Strategy featured stocks such as Netflix, Inc. (NASDAQ:NFLX) in the fourth quarter 2023 investor letter. Headquartered in Los Gatos, California, Netflix, Inc. (NASDAQ:NFLX) is a streaming platform. On January 18, 2024, Netflix, Inc. (NASDAQ:NFLX) stock closed at $485.31 per share. One-month return of Netflix, Inc. (NASDAQ:NFLX) was -0.30%, and its shares gained 41.70% of their value over the last 52 weeks. Netflix, Inc. (NASDAQ:NFLX) has a market capitalization of $212.41 billion.
Polen Focus Growth Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its fourth quarter 2023 investor letter:
“In the fourth quarter, the top relative and absolute contributors to the Portfolio’s performance were Netflix, Inc. (NASDAQ:NFLX), ServiceNow, and Salesforce.
During Netflix’s pandemic grow-over issues in 2022, the market seemed to believe there was little revenue or free cash flow growth left to be had for this business. The pandemic had pulled forward user growth, and the company then disclosed that there were over 100 million households that were using Netflix but not paying for it by borrowing a paid user’s account. After we assessed this information, better understood how the company could monetize shared passwords, and realized the win-win for Netflix and consumers from introducing an ad-supported subscription tier, we meaningfully added to our position in Netflix in the summer of 2022. We saw a clear path to much better monetization of an already robust and differentiated platform with a continued commitment to improved content spend efficiency and free cash flow growth.
Fast forward to today, Netflix has made meaningful progress on monetizing shared passwords and laying the foundation for consumer choice, although the ramp in advertising tier subscribers remains in the beginning stages. The low-hanging fruit may already have been picked on password sharing efforts, but our research shows there should be long tails of revenue and free cash flow growth. In our opinion, Netflix remains the most advantaged and profitable streaming service with opportunities to continue adding subscribers and raising prices as it demonstrates more value to consumers over time. Over the longer term, we also expect significant advertising revenue. That said, the market finally seems to have appreciated some of this. As a result, we trimmed our position from approximately 8% of the Portfolio to approximately 5% in the fourth quarter.”
Pixabay/Public Domain
Netflix, Inc. (NASDAQ:NFLX) is in 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 102 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of third quarter which was 114 in the previous quarter.
We discussed Netflix, Inc. (NASDAQ:NFLX) in another article and shared Ensemble Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 16 Countries That Produce the Best Architects in the World
- 11 Stocks with the Biggest Buybacks
- 11 Best Global Dividend Stocks To Buy Now
Disclosure: None. This article is originally published at Insider Monkey.
