Ensemble Capital Management, an investment management company, released its third quarter 2023 investor letter. A copy of the same can be downloaded here. During the quarter, the strategy declined by 5.68% compared to the S&P 500’s 3.27% decline. The underperformance of the fund was driven by large declines in two holdings that have recently elected activist shareholders to their boards. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Ensemble Capital Management highlighted stocks like Netflix, Inc. (NASDAQ:NFLX) in the third quarter 2023 investor letter. Headquartered in Los Gatos, California, Netflix, Inc. (NASDAQ:NFLX) is a streaming platform. On October 31, 2023, Netflix, Inc. (NASDAQ:NFLX) stock closed at $411.69 per share. One-month return of Netflix, Inc. (NASDAQ:NFLX) was 9.23%, and its shares gained 50.80% of their value over the last 52 weeks. Netflix, Inc. (NASDAQ:NFLX) has a market capitalization of $180.188 billion.
Ensemble Capital Management made the following comment about Netflix, Inc. (NASDAQ:NFLX) in its Q3 2023 investor letter:
“Netflix, Inc. (NASDAQ:NFLX) (-14.28%): During an investor conference for Wall Street analysts, Netflix’s CFO noted that profit margin growth in the years ahead would likely be less than it has been in recent years. But rather than this being due to some sort of problem with profitability, he said it was because there was more than enough growth opportunity ahead for them to invest at high enough levels that would lead to lower growth in profit margins. Noting that there would be an eventual point at which margins would peak and growth potential would be exhausted, he said “I just don’t think we’re anywhere near that yet.” These comments simultaneously validate long term bullish investors’ views of significant profit margin and revenue growth still to come, as well as short term bearish investors’ concerns that profit margin estimate for 2024 may have been a bit too high.”
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Netflix, Inc. (NASDAQ:NFLX) is in 12th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 114 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of second quarter which was 108 in the previous quarter.
We previously discussed Netflix, Inc. (NASDAQ:NFLX) in another article and shared the list of best ESG stocks to buy. In addition, please check out our hedge fund investor letters Q3 2023 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.
