Vulcan Value Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. All five of the fund’s strategies trailed their respective benchmarks during the quarter. According to the fund, they ‘place no weight on short-term results, good or bad, and neither should you’. Vulcan Value Partners have made and will continue to make decisions that negatively impact short-term performance when it thinks it can improve its long-term returns and lower risk. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Baron Durable Advantage Fund mentioned Meta Platforms, Inc. (NASDAQ:FB) and explained its insights for the company. Founded in 2004, Meta Platforms, Inc. (NASDAQ:FB) is a Menlo Park, California-based multinational technology conglomerate with a $520.2 billion market capitalization. Meta Platforms, Inc. (NASDAQ:FB) delivered a -42.85% return since the beginning of the year, while its 12-month returns are down by -38.70% The stock closed at $192.24 per share on May 18, 2022.
Here is what Baron Durable Advantage Fund has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:
“Meta Platforms Inc., the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta, we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”
Photo by Joshua Hoehne on Unsplash
Our calculations show that Meta Platforms, Inc. (NASDAQ:FB) ranks 3rd on our list of the 30 Most Popular Stocks Among Hedge Funds. Meta Platforms, Inc. (NASDAQ:FB) was in 224 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 248 funds in the previous quarter. Meta Platforms, Inc. (NASDAQ:FB) delivered a -11.12% return in the past 3 months.
In May 2022, we also shared another hedge fund’s views on Meta Platforms, Inc. (NASDAQ:FB) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
