Home Hedge Funds Here’s Why The Trade Desk (TTD) Declined in Q4

Here’s Why The Trade Desk (TTD) Declined in Q4

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Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. The fund increased 17.6% (Institutional Shares) in the fourth quarter compared to a 14.2% gain for the Russell 1000 Growth Index and an 11.7% increase for the S&P 500 Index. For the full year, the fund appreciated 57.6% compared to 42.7% and 26.3% returns for the indexes, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Baron Fifth Avenue Growth Fund featured stocks such as The Trade Desk, Inc. (NASDAQ:TTD) in its Q4 2023 investor letter. Headquartered in Ventura, California, The Trade Desk, Inc. (NASDAQ:TTD) provides a technology platform for advertising buyers. On February 22, 2024, The Trade Desk, Inc. (NASDAQ:TTD) stock closed at $83.50 per share. One-month return of The Trade Desk, Inc. (NASDAQ:TTD) was 20.80%, and its shares gained 48.44% of their value over the last 52 weeks. The Trade Desk, Inc. (NASDAQ:TTD) has a market capitalization of $40.826 billion.

Baron Fifth Avenue Growth Fund stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its fourth quarter 2023 investor letter:

“The Trade Desk, Inc. (NASDAQ:TTD) is the leading internet advertising demand-side platform, enabling agencies and companies to efficiently buy and track digital advertising across desktop, mobile, online video, and connected TV (CTV) channels. Shares were down 8.0% in the fourth quarter, though they still finished the year up 59.1%, after the company guided fourth quarter revenue growth of 18% year-over-year. This was as a result of heightened macro uncertainty impacting advertising budgets early in the fourth quarter particularly in the auto, consumer electronics, and media and entertainment industries, and despite the company noting an improvement in November. While guidance significantly outpaces competitors, suggesting that the Trade Desk is gaining market share, it was below consensus expectations and drove the share price action. We do not view this slowdown as structural and believe the company remains well positioned for 2024 and beyond, with strong tailwinds in CTV as more households continue to cut the cord and as more streaming services adopt and grow their CTV advertising businesses, while a growing proportion of advertisers adopt programmatic advertising. In addition, we believe that the company would benefit from growth in retail media, which enables connecting offline retail sales data with online digital advertising data, the adoption of the company’s new platform, growth in audio, and more. Longer term, we remain positive on the company given its technology, scale, and estimated 10% share in the $100 billion programmatic advertising market, a small and growing subset of the $700 billion global advertising market.

The demand side advertising platform, The Trade Desk, which also saw stock price volatility as a result of near-term slowdown in advertising spend by customers in several industries (see above), which we also don’t view as structural.”

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The Trade Desk, Inc. (NASDAQ:TTD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, The Trade Desk, Inc. (NASDAQ:TTD) was held by 41 hedge fund portfolios, up from 39 in the previous quarter, according to our database.

We discussed The Trade Desk, Inc. (NASDAQ:TTD) in another article and shared the list of best stocks for long-term growth. In addition, please check out our hedge fund investor letters Q4 2023 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.

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