Is ETSY a Smart Long-Term Buy?

ClearBridge Investments, an investment management firm, published its “All Cap Growth Strategy” fourth quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge All Cap Growth Strategy underperformed its Russell 3000 Growth Index benchmark in the fourth quarter. On an absolute basis, the Strategy generated gains across seven of the eight sectors in which it was invested (out of 11 sectors total). The primary contributors to performance were the IT and health care sectors while the sole detractor was the communication services sector Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

ClearBridge All Cap Growth Strategy, in its Q4 2021 investor letter, mentioned Etsy, Inc. (NASDAQ:ETSY) and discussed its stance on the firm. Founded in 2005, Etsy, Inc. (NASDAQ:ETSY) is a Brooklyn, New York-based e-commerce company with a $17.4 billion market capitalization, and is currently spearheaded by its CEO, Josh Silverman. Etsy, Inc. (NASDAQ:ETSY) delivered a -41.97% return since the beginning of the year, while its 12-month returns are down by -38.98%. The stock closed at $127.05 per share on April 01, 2022.

Here is what ClearBridge All Cap Growth Strategy has to say about Etsy, Inc. (NASDAQ:ETSY) in its Q4 2021 investor letter:

“We took advantage of market volatility in the fourth quarter, using pullbacks to initiate eight new positions and add to recently established ones while closing another eight positions Seeding the Strategy with disruptive growth companies and broadening out the portfolio’s industry weightings have been central to our repositioning efforts in 2021. To this end, we added two new disruptors in the quarter: Etsy and CrowdStrike Holdings.

Etsy operates a number of online marketplaces with its flagship brand,, an e-commerce destination for craft and artisan goods. We see the company’s scaled, two-sided network and focus on unique and special goods as competitive advantages. We believe Etsy has a long runway for growth ahead as it captures a greater share of the very large and growing global retail market. We view Etsy as a differentiated, early stage way to participate in the secular growth of e-commerce. We are also attracted to the company’s capital light business model and strong and improving profitability profile. Furthermore, our position increases our exposure to the consumer discretionary sector, where we have historically had less exposure.”

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Our calculations show that Etsy, Inc. (NASDAQ:ETSY) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Etsy, Inc. (NASDAQ:ETSY) was in 47 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 47 funds in the previous quarter. Etsy, Inc. (NASDAQ:ETSY) delivered a -41.97% return in the past 3 months.

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