4. On Holding AG (NYSE:ONON)
Luxor Capital Group’s Equity stake: $26.11 Million
Year-to-date gain: 70%
Number of Hedge Fund Holders: 29
On Holding AG (NYSE:ONON) is a company that develops and distributes sports products worldwide. On Holding AG (NYSE:ONON) offers athletic footwear apparel and accessories online and in stores through independent retailers and distributors.
Leone has been buying and selling shares in On Holding AG (NYSE:ONON) since Q3 2021 and held stakes worth $26 million in Q3 2023.
Baron Funds, an investment management firm, expressed confidence in On Holding AG (NYSE:ONON) in its Q3 2023 investor letter. Here is what the firm stated about On Holding AG (NYSE:ONON):
“In the third quarter, we purchased shares of On Holding AG (NYSE:ONON), a developer and distributor of athletic footwear, apparel, and accessories. On is one of the fastest-growing scaled athletic sports companies in the world. Management’s vision is to build a premium global sportswear brand based on innovation, design, and sustainability. Its products are sold through approximately 10,000 premium retail stores, which account for 65% of revenue. The balance of sales occur through its direct-to-consumer channel, encompassing its own branded and operated stores, as well as its website.
On was founded in Switzerland, but it has expanded quickly across the globe. Its products have exhibited sales momentum in the U.S., Europe, and Asia. The company is rapidly growing its base of roughly 10 flagship retail stores, and it plans to end this year with 47 stores across 18 cities in China. Roughly half of its revenue is generated in North America, 45% in Europe, and 5% in Asia Pacific. On is addressing a large market opportunity: the $355 billion global sportswear industry. This market has seen its growth driven by continued trends toward athleisure. Consumers continue to pivot their spending towards more comfortable and casual attire as they lead healthier, more active lifestyles.
We believe On should be able to grow its revenues faster than 20% for many years, while also expanding its margins. We expect its growth to be driven by expanding brand awareness leading to market share gains in its core running shoe category, particularly as On expands its geographic footprint. We expect the company to continue to reinvest into its business at high rates of return. We believe On has a large opportunity to take market share in newer shoe categories, such as tennis (Roger Federer is an investor and advisor), training, and outdoor. The company also has a significant opportunity to grow its offerings in the apparel category.”
