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Here’s Why Spree Capital Sold its Inc. (CARS) Position

Spree Capital Advisers, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 3.98% was recorded by the fund for the Q1 of 2021, below the S&P 500 Index that delivered a 6.17% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Spree Capital Advisers, in their Q1 2021 investor letter, mentioned Inc. (NYSE: CARS), and shared their insights on the company. Inc. is a Chicago, Illinois-based online automotive platform company that currently has a $913.6 million market capitalization. Since the beginning of the year, CARS delivered a 17.79% return, extending its 12-month gains to 92.62%. As of May 04, 2021, the stock closed at $12.87 per share.

Here is what Spree Capital Advisers has to say about Inc. in their Q1 2021 investor letter:

"Our businesses are doing well, and thus we only made one minor adjustment to the portfolio. In the first quarter we sold (CARS) in order to redeploy funds elsewhere. Our return on CARS of 40% hit our bogey over our nearly two-year holding period but extracted a modest opportunity cost as it underperformed the rest of the portfolio. Our returns and exposure continue to be weighted towards high quality businesses with long duration runways for scalable revenue and earnings growth."


Our calculations show that Inc. (NYSE: CARS) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Inc. was in 19 hedge fund portfolios, compared to 22 funds in the third quarter. CARS delivered a 5.42% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. 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.