Rowan Street Capital: “The Trade Desk (TTD) Had a Blowout Q2!”

Rowan Street Capital, an investment management company, released its August update recently. A copy of the same can be downloaded here. Since the end of the second quarter, the fund has been 30% up. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Rowan Street Capital discussed stocks like The Trade Desk, Inc. (NASDAQ:TTD) in the August update letter. Headquartered in Ventura, California, The Trade Desk, Inc. (NASDAQ:TTD) is a technology company. On October 10, 2022, The Trade Desk, Inc. (NASDAQ:TTD) stock closed at $54.83 per share. One-month return of The Trade Desk, Inc. (NASDAQ:TTD) was -14.13% and its shares lost 24.63% of their value over the last 52 weeks. The Trade Desk, Inc. (NASDAQ:TTD) has a market capitalization of $26.771 billion.

Here is what Rowan Street Capital specifically said about The Trade Desk, Inc. (NASDAQ:TTD) in its August month investor letter:

“Just as a little background, we took a small 2-3% position in The Trade Desk, Inc. (NASDAQ:TTD) back in March 2020 when the market collapsed. What’s interesting is that this position has grown to 15% of the fund since then organically. Winners win and they deserve to be a larger part of our portfolio because they have earned that right. One of the lessons that we had learned over the years experimenting with position sizing is that our positions should not be forced to anything larger than 10-15% of portfolio at cost. Our portfolio naturally wants to be in winners and it will concentrate itself more and more in winners if we let it. After all, it’s easier to sleep at night when your largest position got that way by going up (earned that right) vs. an underperformer you keep adding to trying to prove to the market you are right.

Now on to the business results, Trade Desk had a blowout Q2! They grew revenues 35% Y/Y as they outpaced competitors and gained market share, despite the macroeconomic uncertainty. That 35% top line growth is especially impressive, given that they are comparing against prior year record growth rate of over 100% in Q2 of 2021. They also generated $139 million in adjusted EBITDA (37% of revenue). TTD is actually one of the few high growth tech companies that consistently generates strong adjusted EBITDA and free cash flow and has the financial flexibility to reinvest so they can innovate for their customers.

We continue to be very impressed with the high level of execution by the TTD’s management team. Trade Desk exudes all the traits of the compounding machine that we look for and we are happy to be long term shareholders in this company.”

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The Trade Desk, Inc. (NASDAQ:TTD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held The Trade Desk, Inc. (NASDAQ:TTD)  at the end of the second quarter which was 34 in the previous quarter.

We discussed The Trade Desk, Inc. (NASDAQ:TTD) in another article and shared Saga Partners’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.

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