We recently published a list Top 10 shares to buy according to Akre Capital Management. In this article we will see where Costar Group, Inc. (Nasdaq: CSGP) stands against other top stocks to buy according to Akre Capital Management.
AKR Cappality Management Follows a disciplined investment philosophy aimed at identifying exceptional companies managed by honest and capable leaders who wisely reinvest the free cash flow. This approach, referred to as the ‘three -part stool’, emphasizes three important factors: extraordinary companies, strong management teams and effective reinvestment strategies. The primary objective of the company is to worsen investor capital at above -average rates while retaining a lower risk level compared to industrial standards. Led by founder Chuck Akre until 2020, the company has consistently kept to this philosophy and has produced strong results over the years.
The basis of Akre Capital’s investment strategy is based on the principle that long -term efficiency correlates closely with the return on the capital of an owner, based on stable valuations and no benefits. Historically, the average return on US shares was around 9% to 10%, in accordance with book value growth per share. Akre Capital wants to perform this benchmark better by selecting companies with superior return profiles, in the conviction that these “compound machines” are the best way to achieve accumulation of sustainable wealth. The company focuses on patience and discipline, opposes short -term marketing fluctuations in favor of long -term growth.
Unlike many asset managers, Akre Capital does not relate to setting specific sales goals when acquiring shares. Instead, the potential investments evaluates with the intention of holding them indefinitely, only sells when one of the corners of the “three -part stools” is affected. This long -term approach distinguishes the company of Wall Street’s frequent short -term focus on quarterly profit surprises. Instead of responding to small profit fluctuations, AKRE Capital continues to work for companies with solid economic Fundamentals, viewing temporary price decreases as possibilities to acquire high -quality companies in attractive ratings.
Another important distinguishing factor of Akre Capital is the ability to capitalize on market -effections. The company benefits from Wall Street’s obsession with the short -term profit reports, often with the help of quarterly “misses” as possibilities to invest in undervalued companies with a strong long -term potential. With a focus on growth over periods of five and ten years, AKRE Capital prioritizes the economic value per share rather than short -term movements on stock price. This steadfast dedication to its investment philosophy has enabled the company to consistently achieve its goal to worsen capital and reduce the risk.
Charles T. “Chuck” Akre, Jr. is an experienced asset manager with more than five decades of experience with the supervision of private funds, investment funds and separately managed accounts. He founded Akre Capital Management in 1989 after 21 years of spending at Johnston, Lemon & Co., a NYSE member company, where he received expertise in research, asset management and branch activities. During his time there he developed a deep understanding of effects and investment strategies, which laid the foundation for tackling his own company.
From 1993 to 2000, Akre Capital Management operated under the umbrella of Friedman, Billings, Ramsey & Co. In Washington, DC, and offers Chuck extra resources to refine and expand his investment philosophy. In 2000, however, he chose to take the company private again, with the emphasis on independence and a long -term investment approach. He moved Akre Capital to Middleburg, Virginia, a national setting that reflected his preference for a targeted and patient investment process, free from the distractions of the short -term mentality of Wall Street.
At Akre Capital, Chuck Akre’s leadership has formed the success of the company in the long term and ensures consistent capital growth for investors. Over the years he has built up a reputation for his disciplined and insightful approach to asset management. Today Akre continues to contribute to his expertise as chairman of Akre Capital Management. He works together with John Neff, the portfolio manager of the AKRE Focus Fund, ensuring that the investment principles of the company remain intact. With decades of experience and a dedication to compiling capital at superior rates, the influence of Chuck Akre in the investment world remains considerable.
From the most recent application for the fourth quarter of 2024, Akre Capital Management manages around $ 11.56 billion in 13F effects. The company maintains a highly concentrated portfolio, with its top ten holdings accounting for 94.82% of the total assets. This targeted investment approach reflects the dedication of Akre Capital to select a small group of high -quality companies with a strong growth potential and disciplined management.
The shares discussed below were chosen from the Q4 2024 13F archives of Akre Capital Management. They are composed in the rising order of the importance of the Hedgefonds in them on December 31, 2024. To help readers with more context, we have included the hedge funds sentiment with regard to each shares using data from 1009 hedge funds followed by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the shares that stack hedge funds? The reason is simple: our research has shown that we can surpass the market by imitating the best share choices of the best hedge funds. The strategy of our quarterly newsletter selects 14 CAP and Large-CAP shares every quarter and has returned 373.4% since May 2014 and has reported its benchmark with 218 percentage points (See more details here).
Is Costar Group, Inc. (CSGP) The top stock to buy according to Akre Capital Management?
An elegant residential building against the modern skyline.
Number of holders of hedge funds from Q4: 56
Akre Capital Management’s Equity Stake: $ 666.78 million
Costar Group, Inc. (Nasdaq: CSGP) is a leading supplier of information, analyzes and marketing services for the commercial real estate sector in North America and Europe. With a market capitalization of $ 31.55 billion and strong gross profit margins of almost 80%, the company maintains a solid financial position, where it has more cash than debts. Costar considerably expands its workforce in its Richmond Operations Center, where it is planning to complete a new worldwide headquarters of one million square feet by 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 US, with an average of 110 million unique monthly visitors in Q4 2024. To support this expansion, Costar Group, Inc. (Nasdaq: CSGP) Plans to hire 500 new sales professionals and 100 market analysts. Moreover, after the acquisition of Visual Lease 100, the company will yield analysts to develop rental indexes for customers. As part of its broader strategy, Costar also invests in artificial intelligence, video production and real estate -oriented news and writing. Although it expected some personnel adjustments in 2025 due to AI-driven efficiency, the company remains aimed at optimizing performance and generating income.
Despite the expansion, the recent WINST report from Costar Group, Inc. (Nasdaq: CSGP) not for expectations, with adapted Q4 profit per share at $ 0.15, under the estimate of the analysts of $ 0.22. However, the turnover for the quarter surpassed the predictions, up to $ 709 million, an increase of 11% on an annual basis. For the full year 2024, sales was $ 2.74 billion, although the net result fell to $ 139 million from $ 375 million. Looking ahead, projects Costar 2025 turnover between $ 2.98 billion and $ 3.01 billion, slightly below the expectations of the analysts. In a strategic step, the company has also made an unsolicited offer to acquire Domain Holdings Australia for $ 4.20 per share, subject to approvals of the regulatory authorities. Analysts have responded carefully, with Needham, Citi and Citizens JMP who their price goals for Costar Group, Inc. (Nasdaq: CSGP) have lowered with retention of favorable ratings, which reflects both trust in the most important segments of the company and the concern about its 2025 -outlook.
Poland Focus Growth Strategy stated the following with regard to Costar Group, Inc. (Nasdaq: CSGP) in its Q4 2024 investor:
“We have initiated a position in Costar Group, Inc. (Nasdaq: CSGP) After a significant withdrawal after 3Q24 income. Costar Group is a leading supplier of information about commercial real estate, analyzes and online market places, which means that customers are authorized with extensive data and technological solutions to make informed business decisions. The vast majority of the company’s turnover and profit comes from the Monopoly-like Costar suite (the go-to-information source for the American commercial real estate market) and Apartments.com, a privileged player in the duopolistic American apartment rental market. There are very high obstacles for access and network effects in these companies, and both are double growers with more than 40% profit margins and very high levels of recurring income. We believe that the price we have acquired Costar, reflects the value of these two core companies, leaving significantly upward potential of many other growth grips in earlier developmental stages of development. In particular, Homes.com – the residential real estate market of Costar – is a source of heavy investments that considerably depress the total profit margins of the company in the short term. However, the leading success indicators are already on the rise and we expect Homes.com to contribute meaningfully to future growth and with high margins. If they did not succeed for some reason, we would expect that the investment will be reduced and that the nuclear profit will shine again. Costar has a cash-rich balance, high recurring income and the possibility of increasing income and income for many more years. “
Generally CSGP is in 9th place On our list of top stocks to buy according to Akre Capital Management. Although we recognize the potential for CSGP as an investment, our conviction is convinced that some AI shares have a greater promise for delivering a higher efficiency within a shorter time frame. If you are looking for an AI share that is promising than CSGP, but that acts with less than 5 times the income, view our report on the Cheapest AI stock.
Read next: 20 best AI shares to buy now And 30 best shares to buy now according to billionaires.
Publication: none. This article was originally published on Insider Monkey.
