One of this year’s hottest hedge funds turned in another big monthly gain. In September, Sosin Partners tacked on an additional 14 percentage points to performance and is now up 69.7 percent for the year, making it one of 2024’s top hedge funds.
Cliff Sosin founded Sosin Partners and CAS Investment Partners, which manages the fund, in 2012. The very concentrated hedge fund holds just five stocks, including online used car company Carvana, which accounted for roughly two-thirds of capital as of the end of the second quarter. The stock likely represents a bigger fraction of the fund now.
Shares of Carvana surged more than 15 percent last month and are up more than three and a half times this year, closing Friday at $192.25. The stock blew through recent price targets.
In September, Evercore ISI lifted its target to $157 per share from $142. In July, BTIG initiated coverage of Carvana’s stock with a buy rating and a $155 target price. Since year-end 2022, the stock has increased more than 40 times.
Today the consensus recommendation for the stock among Wall Street’s sell-side analysts is a hold, with an average target price of $165.40. The highest target currently is $230, according to The Wall Street Journal.
Sosin’s four other stocks have shrunk in importance over the past couple of years. One still plays a sizable role, but not as significant as Carvana’s. Hilton Grand Vacations — Sosin’s second-largest long — was down more than 6 percent last month and more than 11 percent for the year. The stock accounted for just over 20 percent of assets at the end of the second quarter.
The remaining three stocks made up just 14 percent of assets combined. They were not big contributors to performance last month, although one is doing well this year.
Shares of Capital One Financial, which accounted for 7.4 percent of assets at the end of June, gained nearly 2 percent last month and is up nearly 19 percent for the year through Friday. In the past two and a half years, the stock has more than tripled.
In contrast, Cardlytics fell more than 19 percent in September and is down more than 60 percent for the year. The company partners with financial institutions to help marketers identify potential customers. It contributed a little more than 4 percent of assets at the end of June.
And World Acceptance Corp., a small-loan consumer finance company, was essentially flat last month. It accounted for only 2.4 percent of assets at the end of June. Sosin cut its stake by 25 percent in the second quarter and has pared it by nearly two-thirds over the past three quarters.