Is it a Good Time to Increase Your Spotify (SPOT) Stake?

Diamond Hill Capital, an investment management firm, published its “Diamond Hill International Fund” first-quarter 2022 investor letter – a copy of which can be downloaded here. During a volatile quarter, the portfolio held up better than the Morningstar Global Markets ex-US Index by a decent margin. After a strong rebound in 2021, the fund expects the global GDP growth to moderate in 2022. Try to take some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Diamond Hill International Fund mentioned Spotify Technology S.A. (NYSE:SPOT) and explained its insights for the company. Founded in 2006, Spotify Technology S.A. (NYSE:SPOT) is a Stockholm, Sweden-based entertainment services provider with an $18.5 billion market capitalization. Spotify Technology S.A. (NYSE:SPOT) delivered a -58.84% return since the beginning of the year, while its 12-month returns are down by -60.40%. The stock closed at $96.32 per share on July 14, 2022.

Here is what Diamond Hill International Fund Concentrated Fund has to say about Spotify Technology S.A. (NYSE:SPOT) in its Q1 2022 investor letter:

“Spotify’s stock sold off in Q1 despite strong fundamental results. We believe the sell-off was due to several exogenous factors, including the interest rate policy shift, public backlash over Joe Rogan content, as well as continued skepticism by some around the company’s decision to step up growth investments again, thus calling into question the business’s longer-term ability to scale. We used the period of weakness to add to our position.”

Photo by Alexander Shatov on Unsplash

Our calculations show that Spotify Technology S.A. (NYSE:SPOT) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Spotify Technology S.A. (NYSE:SPOT) was in 49 hedge fund portfolios at the end of the first quarter of 2022, compared to 53 funds in the previous quarter. Spotify Technology S.A. (NYSE:SPOT) delivered a -29.32% return in the past 3 months.

In July 2022, we also shared another hedge fund’s views on Spotify Technology S.A. (NYSE:SPOT) 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.