Miller Value Partners, an investment management firm, published its “Miller Opportunity Equity” fourth quarter 2021 investor letter – a copy of which can be seen here. A quarterly net decline of 4.29% has been recorded by the fund for the fourth quarter of 2021, compared to the S&P 500 Index’s 28.71% gain 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.
Miller Value Partners Opportunity Equity, in its Q4 2021 investor letter, mentioned Peloton Interactive, Inc. (NASDAQ: PTON) and discussed its stance on the firm. Peloton Interactive, Inc. is a New York, New York-based exercise equipment company with a $12.5 billion market capitalization. PTON delivered a 6.68% return since the beginning of the year, while its 12-month returns are down by -74.18%. The stock closed at $29.75 per share on February 8, 2022.
Here is what Miller Value Partners Opportunity Equity has to say about Peloton Interactive, Inc. in its Q4 2021 investor letter:
“Money losing growth stocks posted the biggest losses late in the year. Jim Cramer termed this behavior getting “pelotoned,” as Peloton is the poster child for what we experienced. At recent prices ($31.33 as of close 1/14/22), Peloton is more than 80% off its highs. It’s reversed nearly all its pandemic gains, trading at levels close to the IPO price ($29).
We previously owned Peloton, so we know the company well. We bought Peloton after the IPO based on our belief it was a misunderstood consumer brand pegged as a faddish hardware company.
It benefited enormously from the pandemic as demand surged and customer acquisition costs plummeted. We expected these dynamics to reverse as the environment normalized from stay-at-home. We sold in late 2020 because we thought it was fully valued around $100. Growing risks created a poor risk/reward.
At current prices, it’s interesting once again and we’ve resumed work on it. Market sentiment towards money losers remains quite negative. Peloton’s prospects, like others, ultimately depend on its ability to drive free cash flow over the long term. We reference Peloton because it’s an extreme example of behavior we’ve seen more broadly.”
Courtesy of Peloton
Our calculations show that Peloton Interactive, Inc. (NASDAQ: PTON) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PTON was in 62 hedge fund portfolios at the end of the third quarter of 2021, compared to 67 funds in the previous quarter. Peloton Interactive, Inc. (NASDAQ: PTON) delivered a -23.90% return in the past 3 months.
Earlier this month, we published an article that include PTON in the 10 Stocks to Sell According to Motley Fool. 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.
