RiverPark Funds, an investment management company, released its “RiverPark Large Growth Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The second quarter was extremely difficult for the fund which returned -34%. Year to date, the fund returned -47%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
RiverPark Funds discussed stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter investor letter. Headquartered in Redmond, Washington, Amazon.com, Inc. (NASDAQ:AMZN) is a multinational company that provides products and subscriptions. On September 20, 2022, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $122.19 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -8.68%, and its shares lost 27.70% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.245 trillion.
Here is what RiverPark Funds specifically said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a company that has been “reinventing normal” since its formation in 1994. In his 2015 shareholder letter, Jeff Bezos wrote that a dreamy business has at least four characteristics: “customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time – with the potential to endure for decades.” Jeff’s advice was that “When you find one of these, don’t just swipe right, get married.” Unlike most mere mortal businesses that are lucky to have one such business, at the time, Amazon had three. Today, Amazon has five dreamy businesses under its one roof: AWS, Marketplace, Prime, Advertising and Logistics. Notably, each of these businesses were planted as tiny seeds and have grown mainly organically, quickly into meaningfully large businesses.7 And, given management’s belief that it is still “Day 1” of the internet, their focus on relentless innovation, and the tiny seeds they have recently planted, more dreamy businesses may soon follow.
In each of its current businesses, Amazon is the (or is one of the top two or three) dominant force in the world. For example, Amazon leads online retail with 41% market share, while the next ‘largest’ 11 companies each have single digit market share. AWS has 33% share in the cloud infrastructure market, exceeding the market share of its two largest competitors, Microsoft and Google, combined. 8 In Prime (launched in 2005), AMZN has well over 200 million subscribers,9 and with $31 billion of advertising revenue last year, AMZN is already the third largest advertising company (behind Google/YouTube and the Facebook family of apps). And finally, in its newest potential “dreamy” business logistics (encompassing both Fulfillment by Amazon and its recently launched “Buy with Amazon”), AMZN has the largest fulfillment and distribution capacity among U.S. retailers. Amazon has ~375 million square feet of total distribution capacity, dwarfing Walmart’s ~145 million square feet. Amazon is projected to surpass UPS in U.S. package volume in 2022, and in five years have a logistics network large enough that it won’t need to rely on UPS or the U.S. Postal Service.
In response to the pandemic, Amazon’s management team made the decision to interrupt its march towards higher margins and higher returns on capital to respond aggressively to its consumer’s demand explosion across its retail and its AWS infrastructure. This has resulted in lower operating margins within the income statement and much higher capital expenditures, reducing near-term free cash flow, but we believe, widening and deepening Amazon’s moats across all of its businesses. The fruits of these investments (increasing margins, expanding free cash flow and increasing ROIC) will ripen over the next few years, which will be one of the catalysts, we believe, that will drive the company’s stock materially higher…” (Click here to read the full text)
Amazon.com, Inc. (NASDAQ:AMZN) is in 2nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 252 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the second quarter which was 271 in the previous quarter.
We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared stocks that Jim Cramer is monitoring for market recovery. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
The American economy is crumbling, and Fed Chair Jerome Powell can’t do a darn thing to stop it.
In fact, in his zeal to fight inflation, he’s hell bent on making things a lot worse.
He’s jacking up interest rates faster than ever before in history …
He’s busting a giant, speculative bubble in the housing market …
He’s gutting the portfolios of millions of stock investors …
And he’s driving the world into a financial collapse that could make the Great Debt Crisis seem mild by comparison.
I’m Martin Weiss, founder of Weiss Ratings. I started my research and ratings company 51 years ago and I can tell you flatly, this is the worst threat to your money I’ve ever seen.
“A massive and surprising new transition could determine the next group of millionaires,” says Chaikin, who predicted the 2020 market crash. “While leaving 99% of the public worse off than before.”
“If you own regular stocks, you’re in for a big surprise,” he adds.
“I grew up in a world where you could do extremely well by investing in ordinary companies,” Chaikin says. “It’s how I spent the majority of my 50-year career on Wall Street.
