SaltLight Capital, an investment management company, released its “SaltLight SNN Worldwide Flexible FR Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The Fund generated a return of +15.61% in the third quarter of 2024. This letter discusses the firm’s broad thesis regarding the game industry’s future. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
SaltLight Capital highlighted stocks like Sea Limited (NYSE:SE), in the third quarter 2024 investor letter. 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 17.33%, and its shares gained 219.76% of their value over the last 52 weeks. On November 21, 2024, Sea Limited (NYSE:SE) stock closed at $116.33 per share with a market capitalization of $66.813 billion.
SaltLight Capital stated the following regarding Sea Limited (NYSE:SE) in its Q3 2024 investor letter:
“Sea Limited (NYSE:SE), which is focused on Southeast Asia, has the wildly successful Free Fire game franchise, first launched in 2017.
Free Fire has an astounding 648 million quarterly active users and 53 million paying players, spending an average of $42 a year8 . The company’s large user base is due to its game design being playable on lower-spec phones, which are more prevalent in emerging markets. Nevertheless, the business makes good money overall. Over the last twelve months, SEA Ltd made $1bn EBITDA with 50% margins. This is a phenomenal business that doesn’t require much capex to grow.
Our view is that the market has underappreciated the annuity-like nature of these evergreen game franchise businesses. Tencent, in particular, is valued at a multiple that doesn’t appreciate the nature of the game business…” (Click here to read the full text)
A casino floor with multiple gaming tables and slot machines illuminated by neon lights.
Sea Limited (NYSE:SE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held Sea Limited (NYSE:SE) at the end of the third quarter which was 63 in the previous quarter. Sea Limited’s (NYSE:SE) third quarter total GAAP revenue increased 31% year-on-year to $4.3 billion. 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 cheapest AI stock.
In another article, we discussed Sea Limited (NYSE:SE) and shared the list of best internet retail stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 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.