What Makes Sea Limited (SE) a Growing Company?

SaltLight Capital, an investment management company, has released its “SaltLight SNN Worldwide Flexible FR Fund” Q1 2025 investor letter. A copy of the letter can be downloaded here. The Fund generated a return of +2.70% in the first quarter of 2025. Although short-term market fluctuations often attract attention, the firm focuses on the long-term vision for 2030. While volatility can be uncomfortable, it also offers opportunities to invest in excellent businesses at attractive prices. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, SaltLight Capital highlighted stocks such as Sea Limited (NYSE:SE). Sea Limited (NYSE:SE) engages in the digital entertainment, e-commerce, and digital financial service businesses. The one-month return of Sea Limited (NYSE:SE) was 23.27%, and its shares gained 142.75% of their value over the last 52 weeks. On May 27, 2025, Sea Limited (NYSE:SE) stock closed at $165.24 per share with a market capitalization of $97.83 billion.

SaltLight Capital stated the following regarding Sea Limited (NYSE:SE) in its Q1 2025 investor letter:

“Two years ago, in our 3Q23 letter, we made the case that we thought our e-commerce investments would start to show higher margins. At the time, we hypothesised that advertising would be the tool to do that. Back then, we wrote: “In many cases, a business with a sufficiently large customer base can have a low margin core product and then monetise it with high-margin advertising. Digital advertising generates high incremental margins (as high as the ~80% level). The low margin product can almost become the customer acquisition cost, and the ‘real’ business becomes advertising. This strategy has proven effective across a broad spectrum of industries, from e-commerce at Amazon, MercadoLibre, and Shopee”

Sea Limited (NYSE:SE) continues to demonstrate excellent top-line revenue growth and expanding margins. Their e-commerce business is now EBITDA profitable across all regions. Sea has gone from losing $1.20 EBITDA per order to making $0.09 per order.

Now, a 9c profit per order doesn’t sound like much, but in 2018, Shopee processed 200 million orders per quarter, and last quarter, they reached 3.1 billion orders. They’re arguably the dominant player in the region, with a relatively benign competitive environment.”

Sea Limited (NYSE:SE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 84 hedge fund portfolios held Sea Limited (NYSE:SE) at the end of the first quarter compared to 86 in the previous quarter. Sea Limited’s (NYSE:SE) total revenue increased 30% year-on-year to $4.8 billion in the first quarter of 2025. While we acknowledge the potential of Sea Limited (NYSE:SE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Sea Limited (NYSE:SE) and shared the list of best performing large cap stocks so far in 2025. In addition, please check out our hedge fund investor letters Q1 2025 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.