U.S. Markets closed

Spotify (SPOT) Will Be Worth 5x More in 2030 Says Guardian Fund

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Guardian Fund, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 52.21% was recorded by the fund for the year end 2020, outperforming its S&P 500 benchmark that delivered an 18.40%. return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Guardian Fund, in their Q4 2020 Investor Letter said that they acquired a position in Spotify Technology S.A. (NYSE: SPOT) because they believe that the company has a long runway of growth ahead. Spotify Technology S.A. is a digital music, podcast and video streaming company that currently has a $60 billion market cap. For the past 3 months, SPOT delivered a 22.98% return and settled at $317.25 per share at the closing of February 3rd.

Here is what Guardian Fund has to say about Spotify Technology S.A. in their investor letter:

"At the current share price, Spotify basically only represents a fraction of the value they will be able to unlock in the growing market of audio entertainment. The key for Spotify is to change a variable cost base into a fixed cost base just like Netflix has. As the market share of the big labels, measured by the daily hours of engagement of the big labels, is declining, Spotify will be able to adjust its business model and create enormous operational leverage meaning that profitability will grow faster than expenses.

The music catalogue is not the business model. The value lies in the machine learning that drives discovery and engagement, the original content from people like Michelle Obama, Kim Kardashian, and Joe Rogan, the data analytics and distribution for artists, the direct and social relations artists can have with fans through music and videos. We believe that Spotify will be worth at least five times more in 2030."

Last December 2020, we published an article telling that Spotify Technology S.A. (NYSE: SPOT) was in 44 hedge fund portfolios. Its all time high statistics is 67. SPOT delivered a huge 104.63% return in the past 12 months.

Our calculations show that Spotify Technology S.A. (NYSE: SPOT) does not belong in our list of the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

https://youtu.be/OgBhPDmWMtI

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.

Disclosure: None. This article is originally published at Insider Monkey.