Sosin Partners continues to clock gains.
The concentrated and volatile hedge fund has more than doubled its performance in just the past three months, making it one of the best-performing hedge funds in 2024. And the one stock powering the returns has significantly outperformed even Nvidia for more than a year.
The firm headed by Clifford Sosin posted a further 4 percent-plus gain in August, boosting its return to 55.71 percent for 2024, according to a hedge fund database. As recently as the end of May, Sosin was up 29 percent this year.
Sosin founded Sosin Partners and CAS Investment Partners, which manages the fund, in 2012. CAS reported $951 million in regulatory assets as of year-end 2023, which includes leverage. A hedge fund database reports the fund is currently managing $507 million.
Sosin has posted a 23.5 percent annualized return since its inception. But it has not been a smooth ride. The hedge fund had gains of 64.5 percent in 2019 and 96.5 percent in 2020, but less than 4 percent in 2021. It then dropped 77 percent in 2022, only to rebound by nearly 80 percent in 2023.
The firm just holds five stocks. And one has played an outsize role.
Online used-car company Carvana now accounts for two-thirds of assets thanks to price appreciation (Sosin has barely adjusted its stake in nearly two years). The stock has more than tripled this year alone, closing Wednesday at $161.63. Since year-end 2022, the stock has swelled more than 34 times.
Earlier this week, Evercore ISI lifted its price target to $157 per share from $142. And in July, BTIG initiated coverage of Carvana’s stock with a Buy rating and a $155 price target.
Three of Sosin’s four other stocks are down for the year.
One of them does play a significant but smaller role than Carvana. Hilton Grand Vacations accounted for a little more than 20 percent of assets at the end of the second quarter. Its stock was down more than 11 percent in August and about 4 percent for the year.
The three other stocks combined accounted for 14 percent of assets.
Capital One Financial, which accounted for 7.4 percent of assets at the end of June, declined about 3 percent last month but was up 12 percent for the year through August.
Cardlytics, which partners with financial institutions to help marketers identify potential customers, made up a little more than 4 percent of assets at the end of June. The stock has plummeted nearly 60 percent this year through August.
And World Acceptance Corp., a small-loan consumer finance company, accounted for 2.4 percent of assets at the end of June. Its shares are down about 10 percent for the year. Sosin cut its stake by 25 percent in the second quarter and has pared it by nearly two-thirds over the past three quarters.