Here’s Why Ziff Davis (ZD) Outperformed in Q4

·3 min read

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 4.69% (net) compared to a 4.72% return for the Russell 2500 Growth Index. Positive factors during the quarter helped the fund’s performance. An emphasis on quality was beneficial for the fund in the upmarket. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Meridian Growth Fund highlighted stocks like Ziff Davis, Inc. (NASDAQ:ZD) in the Q4 2022 investor letter. Headquartered in New York, New York, Ziff Davis, Inc. (NASDAQ:ZD) is internet information and services provider. On March 16, 2023, Ziff Davis, Inc. (NASDAQ:ZD) stock closed at $74.51 per share. One-month return of Ziff Davis, Inc. (NASDAQ:ZD) was -10.00%, and its shares lost 25.77% of their value over the last 52 weeks. Ziff Davis, Inc. (NASDAQ:ZD) has a market capitalization of $3.521 billion.

Meridian Growth Fund made the following comment about Ziff Davis, Inc. (NASDAQ:ZD) in its Q4 2022 investor letter:

Ziff Davis, Inc. (NASDAQ:ZD), is a leading internet and software services company, operating through two segments: business cloud services and digital media. The combined company has grown revenues for 25 consecutive years with high margins and attractive returns on invested capital. The cloud services business provides niche products to small and mid-sized businesses and enjoys a high percentage of recurring revenues, low churn, and high margins. Ziff Davis’ digital media business generates revenue through subscriptions to websites it owns, including tech, entertainment, and culture site Mashable, and through advertising on those sites. Ziff Davis’ advertising business model is unique in that it is almost entirely performance-based, as opposed to other sites that rely heavily on banner advertisements. Furthermore, while companies that rely on tracking users’ online behaviors to target advertising must navigate stronger privacy rules and regulations, Ziff Davis does not use tracking technology, so it has no exposure to the related operational and financial challenges presented by the tougher rules. In addition, part of our initial attraction to Ziff Davis was its successful track record of acquiring undermanaged companies and them to significantly increase profitability. In what has become an ideal market for acquirers, Ziff Davis has more than $600 million in cash and the patience to wait for acquisition opportunities that meet its recently increased threshold for potential returns. During the period, we slightly trimmed our position as the share price appreciated.”

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Ziff Davis, Inc. (NASDAQ:ZD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Ziff Davis, Inc. (NASDAQ:ZD) at the end of the fourth quarter which was 19 in the previous quarter.

We discussed Ziff Davis, Inc. (NASDAQ:ZD) in another article and shared the list of best advertising stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2022 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.