Ensemble Capital, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be seen here. While this recent quarter represents the fund’s largest degree of underperformance, so too did its 2020 results. In 2020 the Fund was up 30.89% vs the S&P 500 up 18.39% for 12.51% outperformance. It is clear to us that the pandemic has caused much larger and more rapid relative swings in asset pricing as investors struggle to grapple with the implications of an economic event of an unprecedented nature. In this context, you can see that the fund’s first-quarter underperformance of 11.03% is clearly a bad outcome, and yet is not inconsistent with other periods of weak performance that have occurred in the context of its long-term track record of outperformance. 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, Ensemble Capital mentioned Ferrari N.V. (NYSE:RACE) and explained its insights for the company. Founded in 1947, Ferrari N.V. (NYSE:RACE) is a Maranello, Italy-based automobile company with a $40.7 billion market capitalization. Ferrari N.V. (NYSE:RACE) delivered a -14.37% return since the beginning of the year, while its 12-month returns are up by 4.02%. The stock closed at $221.64 per share on April 20, 2022.
Here is what Ensemble Capital has to say about Ferrari N.V. (NYSE:RACE) in its Q1 2022 investor letter:
“Ferrari (7.3% weight in the Fund): As WE DESCRIBED a year ago in this letter, Ferrari’s chief marketing officer’s hardest job is not getting people to buy a Ferrari, but to tell some of them no. The company is in the business of selling rare, luxury products and so by design they greatly limited the number of vehicles they sell. This extreme constraint has led to a wait list of well over a year with a customer base so devoted to the company that even in the midst of the Financial Crisis of 2008-09, the number of vehicles they sold only declined by 4%. Their customers are so price insensitive, that the company often sells out of their limited edition super cars that sell for millions of dollars before they even announce the price. For a Ferrari collector the high prices are a feature, not a bug, as it is the price that makes Ferrari ownership so exclusive.”
Our calculations show that Ferrari N.V. (NYSE:RACE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Ferrari N.V. (NYSE:RACE) was in 34 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 27 funds in the previous quarter. Ferrari N.V. (NYSE:RACE) delivered a -6.32% return in the past 3 months.
In January 2022, we also shared another hedge fund’s views on Ferrari N.V. (NYSE:RACE) 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.