A prominent billionaire with a successful track record in investing has recently made a significant move in the stock market, injecting over $300 million into a high-growth stock that has been on a rapid rise over the past year. Karthik Sarma, the former figure behind Tiger Global who now heads SRS Investment Management, has made headlines by divesting the hedge fund’s substantial stake in Nvidia (NVDA) and shifting focus towards Tapestry (TPR).
Tapestry, a luxury goods company renowned for its premium handbags and accessories under brands like Coach and Kate Spade, has experienced a remarkable surge of over 100% in its stock value within the last 12 months. This growth can be attributed to Tapestry’s expertise in crafting and retailing high-end fashion items, tapping into the escalating demand for luxury lifestyle products in the market.
Sarma’s decision to pour $334 million into Tapestry signals confidence in the company’s financial performance, particularly its robust cash flows and strategic share repurchase initiatives. This substantial investment now represents approximately 4.5% of SRS Investment Management’s portfolio, positioning Tapestry as the fourth-largest allocation within the hedge fund’s holdings.
Notably, Tapestry joins the ranks of other key investments at SRS, including Pdd Holdings Inc., Planet Fitness Inc., and Meta Platforms Inc., reflecting a strategic focus on diverse sectors such as e-commerce, fitness, AI, technology, and luxury retail. This diversified approach underscores Sarma’s keen eye for opportunities across multiple industries, aiming to maximize returns and mitigate risk for investors.
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