Bonsai Partners, an investment management company, released its Q2 2024 Investor letter. A copy of the letter can be downloaded here. For the six months ended June 30, 2024, the fund declined -3.3% net of fees and expenses. The S&P 500 Total Return Index appreciated 15.3% during this period. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Bonsai Partners highlighted stocks like Ubiquiti Inc. (NYSE:UI), in the second quarter 2024 investor letter. Ubiquiti Inc. (NYSE:UI) is a networking technology developer for service providers, enterprises, and consumers. The one-month return of Ubiquiti Inc. (NYSE:UI) was 5.55%, and its shares gained 52.20% of their value over the last 52 weeks. On September 20, 2024, Ubiquiti Inc. (NYSE:UI) stock closed at $217.28 per share with a market capitalization of $13.139 billion.
Bonsai Partners stated the following regarding Ubiquiti Inc. (NYSE:UI) in its Q2 2024 investor letter:
“Ubiquiti Inc. (NYSE:UI) (see our write-up below) also built its business model on top of operational float. Like Costco, Ubiquiti’s products are outliers in terms of the attributes its customers care most about, and as a result, Ubiquiti’s customers and partners defray many of the company’s operating costs, resulting in industry-leading returns on capital.
“Operational float” is valuable because it does not look like “time-based float” yet offers similar benefits. Because this concept is not yet widely recognized, investors retain more value when they identify it. We intend to exploit this idea as long as it remains outside consensus thinking.
You’ve likely noticed by now that we’re fascinated by things that don’t behave as expected. Following our curiosity has been an excellent filter for where we spend our time because we either learn something new or get lucky and stumble upon a new investment idea.
As far as businesses go, Ubiquiti presented itself as a complex web of contradictions. However, as we peeled back the onion, we learned that its contradictions were the source of its competitive advantage. Allow me to share a few of these puzzle pieces:..” (Click here to read the full text)
Ubiquiti Inc. (NYSE:UI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Ubiquiti Inc. (NYSE:UI) at the end of the second quarter which was 14 in the previous quarter. While we acknowledge the potential of Ubiquiti Inc. (NYSE:UI) 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 addition, please check out our hedge fund investor letters Q2 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.
