Greenlight Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. An annual return of 11.9% was recorded by the fund for the whole year 2021, compared to the 28.7% of the S&P 500 index for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Greenlight Capital, in its Q4 2021 investor letter, mentioned Capri Holdings Limited (NYSE: CPRI) and discussed its stance on the firm. Capri Holdings Limited is a New York, New York-based fashion company with a $9.9 billion market capitalization. CPRI delivered a 2.14% return since the beginning of the year, while its 12-month returns are up by 51.34%. The stock closed at $66.30 per share on February 2, 2022.
Here is what Greenlight Capital has to say about Capri Holdings Limited in its Q4 2021 investor letter:
“A lot has changed at the company formerly known as Michael Kors Holdings since we exited our investment in 2016. Back then, the company operated its single namesake brand and we sold our shares after management had successfully executed a business turnaround and deployed excess cash into share repurchases. Since then, the rebranded Capri Holdings (CPRI) acquired the Versace and Jimmy Choo brands and the company has been transitioning into a full-scale luxury platform.
Since CPRI bought Versace, it transitioned the brand into to a full-fledged assortment of new products and more accessible styles. Meanwhile, CPRI has rightsized the footprint at Michael Kors as it cut nearly 30% of its wholesale business and over 10% of its North American retail locations. With these changes, Michael Kors is no longer over-distributed and is enjoying some pricing power.
We believe there is substantial upside to the shares, as the market re-rates the company as a diversified luxury brand owner. In the meantime, CPRI will generate about 10% of its current market capitalization in cash this year. CPRI has recently announced a share repurchase program which equates to 11% of the float. We started acquiring our shares in February and added to our holding in May and December, making it a medium-sized position. Our average entry price was $55.86. CPRI shares ended the year at $64.91.”
Our calculations show that Capri Holdings Limited (NYSE: CPRI) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. CPRI was in 46 hedge fund portfolios at the end of the third quarter of 2021, compared to 44 funds in the previous quarter. Capri Holdings Limited (NYSE: CPRI) delivered a 3.19% return in the past 3 months.
In January 2021, we also shared another hedge fund’s views on CPRI in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
