Appalaches Capital, an investment management firm, released its third-quarter 2024, investor letter. A copy of the letter can be downloaded here. Appalaches Core LO ended the quarter with a 3.0% gain after all fees and expenses compared to the S&P 500’s return of 5.9%, the equal-weighted S&P 500’s return of 9.6%, and the SOFR Index return of 1.4%. The fund has achieved a net return of 7.1%, year-to-date. During the quarter, the firm made several changes to the portfolio, with about two-thirds now allocated to risk assets, aligning better with a normalized allocation, and planning to invest idle cash as opportunities arise in companies with strong competitive positions. The firm aims to buy shares at a discount to their intrinsic value, but this has been more challenging over the past year. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Appalaches Capital highlighted stocks like Coupang, Inc. (NYSE:CPNG), in the third quarter 2024 investor letter. Coupang, Inc. (NYSE:CPNG) owns and operates retail business through an e-commerce platform. The one-month return of Coupang, Inc. (NYSE:CPNG) was -2.51%, and its shares gained 63.12% of their value over the last 52 weeks. On November 29, 2024, Coupang, Inc. (NYSE:CPNG) stock closed at $25.36 per share with a market capitalization of $45.257 billion.
Appalaches Capital stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q3 2024 investor letter:
“A new core holding of the portfolio that may appear confusing is Coupang, Inc. (NYSE:CPNG). Coupang mainly provides a first-party marketplace in South Korea and Taiwan that is similar to Amazon here in the U.S. Coupang additionally has other digital services such as Coupang Play (streaming), Coupang Eats (food delivery), and Coupang Pay (payments). Coupang has a dominant position in South Korean e-commerce, with nearly half of the population represented as an active customer on the platform. At first glance, the company appears marginally profitable and very expensive against current earnings, so it certainly appears to be an outlier against the rest of the portfolio.
A couple of months ago, I shared an article addressing this very subject. As a value investor, I aim to buy shares in businesses trading at a discount to their intrinsic value. This intrinsic value is simply the present value of future cash flows, which can be materially different from the cash flows of the business today. Clearly, I believe this is the case with Coupang…” (Click here to read the full text)
A woman holding a laptop, wearing a graphic t-shirt, casually checking her e-commerce order.
Coupang, Inc. (NYSE:CPNG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Coupang, Inc. (NYSE:CPNG) at the end of the third quarter which was 62 in the previous quarter. While we acknowledge the potential of Coupang, Inc. (NYSE:CPNG) 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 Coupang, Inc. (NYSE:CPNG) and shared the list of stocks comprise 99% of Billionaire Abrams’ portfolio. Coupang, Inc. (NYSE:CPNG) contributed to the performance of Baron Global Advantage Fund during Q3 2024. 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.