Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Match Group, Inc. (MTCH): Blue Hawk Investment Group’s Latest Thoughts

Blue Hawk Investment Group recently released its Q1 2019 Investor Letter (you can track it down here), in which it has posted gains of 2.88% for the quarter, lagging behind the S&P 500 which returned 13.06%. Even though the fund underpeformed its benchmark it still had positive return, for which it can mainly thank Match Group, Inc. (NASDAQ:MTCH), which happened to be the top contributor in the quarter, as written in the letter.

“Match Group (MTCH) – Match Group was the top contributor in the quarter after posting a solid Q4’18 print driven by the growth engine Tinder. Tinder added 233,000 paid subscribers (subs) in the period and 1.2 million for the year, more than quadrupling subs (4.75x to be exact) over the last 12 quarters – best in class growth however you measure it. The service is still significantly underpenetrated especially internationally – which we believe to be about 5 years behind the US in terms of user acceptance – as well as undermonetized domestically. The execution on these two fronts, user growth and monetization, drove Match Group to almost double Tinder direct revenue for the year to $800 million, while still positioning the company for years and years of growth ahead. With its growth profile, minimal required incremental investment per $ of (profitable) growth, underappreciated competitive barriers, and attractive valuation, we continue to be very high on the stock.

Note – As of today, Match’s revenue breakdown is about 50/50 between Tinder and Match’s legacy dating business. Tinder is growing close to 100% y/y while MTCH’s legacy business is flat to down a couple percent. The lack of growth in MTCH’s legacy business weighs down the growth rate of the company overall. The added complexity obfuscates the story and underlying growth. We have found some of our best multi-year investment opportunities in companies undergoing mix shifts from a legacy business to a more attractive business with better economics, of which Match is a prime example.”

Match Group, Inc. (MTCH): Blue Hawk Investment Group's Latest Thoughts

Copyright: dennizn / 123RF Stock Photo

Match Group, Inc. is an Internet company that owns and runs some of the most most popular dating web sites in the world, such as Tinder, OkCupid,, and PlentyOfFish. Year-to-date, the company stock gained 46.08% and on May 3rd it had a closing price of $61.91. Its market cap is of $17.40, and MTCH is trading at a price-to-earnings ratio of 38.48.

At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MTCH over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, AQR Capital Management was the largest shareholder of Match Group, Inc. (NASDAQ:MTCH), with a stake worth $66.2 million reported as of the end of September. Trailing AQR Capital Management was D E Shaw, which amassed a stake valued at $63.7 million. Light Street Capital, Two Sigma Advisors, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.


Disclosure: None.
This article is originally published at Insider Monkey.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.