White Falcon Capital Management LLC, an investment management firm, published its fourth quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly net increase of 2.52% has been recorded by the fund for the fourth quarter of 2022, below the S&P 500 (CAD) Index’s 5.25% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
In its Q3 2022 investor letter, White Falcon Capital Management mentioned Farfetch Limited (NYSE:FTCH) and explained its insights for the company. Founded in 2007, Farfetch Limited (NYSE:FTCH) is a London, United Kingdom-based online luxury fashion retail platform with a $2.3 billion market capitalization. Farfetch Limited (NYSE:FTCH) delivered a 32.98% return since the beginning of the year, while its 12-month returns are down by -70.91%. The stock closed at $6.29 per share on January 20, 2023.
Here is what White Falcon Capital Management has to say about Farfetch Limited (NYSE:FTCH) in its Q3 2022 investor letter:
“The other half of the portfolio that had negative unrealized and realized losses and the common characteristics they had was that they were either technology stocks or small caps or both! The biggest mistakes in this basket have been Farfetch and CopperLeaf Technologies.
Farfetch is the largest scaled e-commerce platform for luxury goods. In addition to being a marketplace, it has a platform solutions business (think Shopify for luxury) as well as a own brands division. Our revenue and margin estimates for Farfetch turned out to be too high when, during an investor day, management lowered their guidance for the business. The business should be able to do 20-30% EBITDA margins in a mature state but that is not looking likely due to lower realized market power and an inflated cost structure.”
Our calculations show that Farfetch Limited (NYSE:FTCH) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Farfetch Limited (NYSE:FTCH) was in 50 hedge fund portfolios at the end of the second quarter of 2022, compared to 39 funds in the previous quarter. Farfetch Limited (NYSE:FTCH) delivered a -15.46% return in the past 3 months.
In January 2023, we published an article that includes Farfetch Limited (NYSE:FTCH) in 5 Penny Stocks That Will Make You A Millionaire. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q4 2022 page.
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Disclosure: None. This article is originally published at Insider Monkey.
