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We recently published a list of Top 10 actions to buy according to Akre Capital Management. In this article, we are going to take a look at Where Costar Group, Inc. (Nasdaq: CSGP) applies to other actions to buy according to Akre Capital Management.
Akre Capital Management Follows a disciplined investment philosophy focused on the identification of exceptional companies managed by honest and capable leaders who judiciously reinvest the available cash flows. This approach, called “three -legged stools”, emphasizes three key factors: extraordinary companies, solid management teams and effective reinvestment strategies. The main objective of the company is to compose the capital of investors at rates above average while maintaining a lower risk level compared to industry standards. Directed by the founder Chuck Akre until 2020, the company has always joined this philosophy, providing solid results over the years.
The basis of Akre Capital’s investment strategy is based on the principle that long -term yields are closely correlated with the return on the capital of an owner, assuming stable assessments and no distribution. Historically, the average yield of American shares was approximately 9% to 10%, aligning the growth of the accounting value per share. Akre Capital seeks to surpass this reference by selecting companies with higher return profiles, believing that these “composition machines” are the best way to achieve an accumulation of sustainable wealth. The company emphasizes patience and discipline, resistant to short -term market fluctuations in favor of long -term growth.
Unlike many asset managers, Akre Capital is not based on setting specific sales objectives during the acquisition of shares. Instead, he assesses potential investments in order to hold them indefinitely, only selling when one of the fundamental aspects of the “three -legged stools” is compromised. This long -term approach distinguishes the company from the frequent focus of Wall Street on the surprises of quarterly profits. Rather than reacting to fluctuations in minor profits, Akre Capital remains attached to companies with solid economic fundamentals, considering that temporary prices decrease as opportunities to acquire high -quality companies from attractive assessments.
Another key differentiator of the capital of Akre is its ability to capitalize on market ineffectiveness. The company takes advantage of Wall Street’s obsession for short-term profits reports, often using quarterly “shortcomings” as opportunities to invest in undervalued companies with high long-term potential. By emphasizing growth over the periods of five and ten years, Akre Capital prioritizes economic value by action rather than on the movements of short -term equity prices. This unshakable commitment to its investment philosophy allowed the company to constantly achieve its objective of composition of capital while attenuating risks.
Charles T. “Chuck” Akre, Jr. is an experienced asset manager with more than five decades of experience supervising private funds, investment funds and accounts managed separately. He founded Akre Capital Management in 1989 after spending 21 years in Johnston, Lemon & Co., a company member of the NYSE, where he acquired research, asset management and branch operations. During his stay there, he developed an in-depth understanding of the titles and investment strategies, which laid the foundations for the approach of his own business.
From 1993 to 2000, Akre Capital Management worked under the aegis of Friedman, Billings, Ramsey & Co. in Washington, DC, providing Chuck additional resources to refine and extend its investment philosophy. However, in 2000, he chose to bring the private enterprise, emphasizing independence and a long -term investment approach. He moved Akre Capital to Middleburg, Virginia, a rural framework that reflected his preference for a targeted and patient investment process, free from distractions of the short -term mentality of Wall Street.
At Akre Capital, the leadership of Chuck Akre has shaped the long -term success of the company, guaranteeing constant growth in capital for investors. Over the years, he has acquired a reputation for his disciplined and perceptive approach to the management of assets. Today, Akre continues to contribute its expertise as president of Akre Capital Management. He works alongside John Neff, the portfolio manager of the Akre Focus fund, ensuring that the company’s investment principles remain intact. With decades of experience and a commitment to aggravate capital at higher rates, the influence of Chuck Akre in the world of investment remains important.
From its last deposit for the fourth quarter of 2024, Akre Capital Management manages approximately $ 11.56 billion in 13F titles. The company maintains a very concentrated portfolio, with its first ten titles representing 94.82% of the total assets. This targeted investment approach reflects Akre Capital’s commitment to select a small group of high quality companies with high growth potential and disciplined management.
The shares discussed below were chosen from the T4 2024 deposits of Akre Capital Management. They are compiled in the ascending order of the participation of the designing fund in December 31, 2024. To help readers with more context, we included the feeling of hedge funds concerning each action using the data of 1009 Hedge Funds followed by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks in which the hedge funds stacked? The reason is simple: our research has shown that we can surpass the market by imitating the main choices of stock of the best hedge funds. The strategy of our quarterly newsletter selects 14 shares with small capitalization and large capitalization each quarter and has rendered 373.4% since May 2014, beating its reference with 218 percentage points (See more details here).
Is Costar Group, Inc. (CSGP) the best actions to buy according to Akre Capital Management?
An elegant residential building takes place against the modern horizon.
Number of hedge holders with the fourth quarter: 56
Akre Capital Management Papation of shares: 666.78 million dollars
Costar Group, Inc. (NASDAQ: CSGP) is one of the main information, analysis and marketing service providers for the commercial real estate industry in North America and Europe. With a market capitalization of 31.55 billion dollars and high gross beneficiary margins of almost 80%, the company retains a solid financial situation, holding more liquidity than debt. Costar considerably extends its workforce in its Richmond operations center, where it plans to complete a new world seat of a million square feet by May 2026.
The growth of the company is driven by the success of Homes.com, now one of the most visited real estate platforms in the United States, with an average of 110 million monthly visitors unique in the fourth quarter 2024. To support this expansion, Costar Group, Inc. (NASDAQ: CSGP) provides for construction house plans. In addition, after its acquisition of visual lease, the company will use 100 analysts to develop rent indices for customers. As part of its broader strategy, Costar also invests in artificial intelligence, video production and news and writing focused on real estate. Although it anticipates certain labor adjustments in 2025 due to the EI-oriented efficiency, the company remains focused on optimization of performance and generation of income.
Despite its expansion, the recent report on the profits of Costar Group, Inc. (Nasdaq: CSGP) failed, with a profit per share adjusted to the fourth quarter to $ 0.15, below the analyst’s estimate of $ 0.22. However, quarter income has exceeded forecasts, reaching $ 709 million, an increase of 11% from one year to the next. For the full year 2024, revenues totaled $ 2.74 billion, although net profit increased to $ 139 million, compared to $ 375 million. For the future, Costar projects 2025 incomes between $ 2.98 billion and $ 3.01 billion, slightly lower than analysts’ expectations. In a strategic decision, the company has also made an unsolicited offer to acquire Domain Holdings Australia for $ 4.20 per share, subject to regulatory approvals. Analysts responded with caution, with Needham, Citi and Citizens JMP reducing all their price objectives for Costar Group, Inc. (Nasdaq: CSGP) while maintaining favorable notes, reflecting both confidence in the company’s key segments and its concerns concerning its 2025 prospects.
Polen Focus’s growth strategy indicated the following concerning Costar Group, Inc. (Nasdaq: CSGP) in its Q4 2024 Investor letter::
“We have initiated a position in Costar Group, Inc. (NASDAQ: CSGP) After a significant withdrawal after 3T24. Costar Group is one of the main suppliers of commercial real estate information, analyzes and online markets, allowing customers of complete data and technology solutions to make informed commercial decisions. The vast majority of the company’s income and profits come from its Costar suite of Monopoly type (the essential information source for the American commercial real estate market) and Apartments.com, an advantageous player in the Duopolistic American Apartments Rental. There are very high obstacles to the effects of entry and network in these companies, and the two are two -digit producers with more than 40% of beneficiary margins and very high levels of recurring income. We believe that the price at which we have acquired the Costar reflects the value of these two main companies, leaving a significant potential of many other growth engines in previous development stages. In particular, Homes.com – The Costar residential real estate market – is an intense source of investment that considerably depresses the overall beneficiary margins of the company in the short term. However, the main success indicators already emerge, and we expect Homes.com significantly contributing to future growth and high margins. If, for any reason, they do not succeed, we would expect the investment to be reduced and that basic profitability shines again. Costar has an assessment rich in cash, high recurring income and the ability to compose income and income for many years to come. »»
Overall, CSGP rank 9th On our list of the main actions to buy according to Akre Capital Management. While we recognize the potential of CSGP as an investment, our conviction lies in the conviction that certain AI actions are more promising to provide higher yields and do it within a shorter period. If you are looking for a more promising stock of AI than CSGP but which is negotiated within 5 times its income, consult our report on the Stock ai the cheapest.
