Silver Ring Value Partners, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. At the end of June 2022, the portfolio was very attractively priced, with the Price to Base Case value ratio at 56%. The portfolio had 13 investments plus hedges, cash at 0%, and option-adjusted net exposure at 4%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Silver Ring Value Partners mentioned Snap Inc. (NYSE:SNAP) and explained its insights for the company. Founded in 2011, Snap Inc. (NYSE:SNAP) is a Santa Monica, California-based social media company with an $18.9 billion market capitalization. Snap Inc. (NYSE:SNAP) delivered a -75.50% return since the beginning of the year, while its 12-month returns are down by -84.35%. The stock closed at $11.52 per share on September 14, 2022.
Here is what Silver Ring Value Partners has to say about Snap Inc. (NYSE:SNAP) in its Q2 2022 investor letter:
“I bought SNAP put options in the fall of 2021, when the stock was above $70 and its market cap around $100B. With revenues of ~ $4B in 2021, this put the company at a whopping 25x sales. I
refer to a multiple of sales only because the company wasn’t yet making a profit, despite its astronomical valuation.I strongly believed that market participants were over-extrapolating a few years’ worth of high sales growth too far into the distant future. This growth was likely temporarily boosted as advertisers
experimented during COVID, attempting to reach customers in new ways. In other words, it was benefiting from unsustainable forces.Having followed the media space for two decades, one thing that I have observed is that change happens slowly. Advertisers rarely abandon an old medium in a wholesale fashion or embrace a new one in such a way. Instead, they shift their budgets incrementally, experimenting and measuring Return on Investment (ROI) along the way…” (Click here to see the full text)
Our calculations show that Snap Inc. (NYSE:SNAP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Snap Inc. (NYSE:SNAP) was in 44 hedge fund portfolios at the end of the second quarter of 2022, compared to 54 funds in the previous quarter. Snap Inc. (NYSE:SNAP) delivered a -12.73% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on Snap Inc. (NYSE:SNAP) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
