Value Investor Clifford Sosin’s Hedge Fund Has 100% of Its Assets in These 4 Stocks

Clifford Sosin isn’t a household name like Warren Buffett. Nonetheless, he has an impressive track record, achieving this through two decades of working in the investment business, including the past 12 years of operating his hedge fund, CAS Investment Partners. 

Sosin launched CAS in 2012, focusing his bets on a few value-oriented stocks. Today, according to the hedge fund’s latest 13F holdings report, it has invested $1.72 billion in just four stocks. 

Sosin’s concentrated portfolio isn’t for the faint of heart but the results are undeniable. From inception through September 2024, CAS has an annualized return of 23.5%, according to Institutional Investor. That’s nearly double the S&P 500’s annual return of 12.64% over the same period. 

Owning a concentrated portfolio lets an investor know their holdings, ensuring they understand all the risks involved. It’s not recommended for the average retail investor, where diversification remains a successful strategy, but for a professional like Sosin, it’s a workable plan. 

As of Dec. 31, CAS had 100% of its assets in these four stocks. Here’s why.   

Key Points About This Article:

• Value investor Clifford Sosin’s hedge fund, CAS Investment Partners, has delivered market-beating returns since its inception in 2012.
• While it owns three other stocks, Carvana (NASDAQ:CVNA) is the bet that drives his firm’s excellent returns.
• The hedge fund added to Hilton Grand Vacations (NYSE:HGV) in Q4 2024.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

It All Begins With Carvana

The hedge fund finished Q4 2024 with 75.53% of its portfolio invested in Carvana (NASDAQ:CVNA), the online used car retailer. While it’s been through its ups and downs, Sosin’s ridden the Carvana wave up over the past year, benefiting from a 117% gain. 

Watch this five-year-old YouTube video to learn more about Sosin’s investment philosophy. It’s very enlightening. However, much of the stock-specific discussion might not be relevant to today’s market.  

However, there are a few tidbits to be found. 

For example, within the first seconds, he informs viewers that the hedge fund will not buy more of a stock if its weight in the portfolio exceeds 25%. When Sosin appeared in the video in May 2019, CAS had 40% of its assets in Carvana, so its concentration has almost doubled over the past five-plus years. 

At the end of June 2019, CAS owned 2.54 million shares of Carvana, accounting for 40.7% of its $390.3 million in assets. Sosin was right on the money. However, it finished 2024 with 6.38 million shares, which suggests it hasn’t followed its own rule. 

It added 670,000 shares in 2020, 10,000 in 2021, and 3.52 million in 2022, and removed a small amount in 2023 and 2024. 

So, why the change of heart? Its stock bottomed in late 2022, around $4. But that’s not when the hedge fund doubled its stake. That came in the first three quarters of 2022: 850,000 in Q1 2022, 2.57 million in Q2 2022, and 100,000 in Q3 2022. 

Carvana stock finished 2021 at $231.79, and its shares closed Q2 2022 around $22. If Sosin was still bullish about its future, he had to buy—and he did by the boatload.

The hedge fund likely paid between $30 and $50 for one-third of its holdings and between $232 and $22 for the other two-thirds. My guess is around $50- $60. WhaleWisdom puts the average price paid at $77.35. 

Since hitting a five-year high of $292.84 in mid-February, its shares have fallen by 41%. Given the current weight and share price, it’s unlikely we’ll see any buying in the next quarter or two. 

The tariffs are expected to cause a surge in used car buying, so it’s doubtful Sosin will sell in 2025. 

What do they say? You ride your winners until they’re not. 

The Other 3 Holdings

At the end of December, Hilton Grand Vacations (NYSE:HGV) was CAS’s second-largest holding, representing 14.73% of the hedge fund’s portfolio. 

In the fourth quarter, it added 129,333 shares to its holdings, bringing its share count to 6.49 million in the vacation ownership business, sometimes called “timeshares.” S&P Global Market Intelligence says the hedge fund owns 6.59% of the company, making it the fifth-largest shareholder. Alternative asset manager Apollo Global Management (NYSE:APO) is the largest shareholder, at 27.6%. 

You might want to look at HGV’s business more closely with these two investors. 

The remaining two stocks are Capital One Financial (NYSE:COF), a credit card issuer and bank. COF accounts for 8.37% of the hedge fund’s portfolio. The fund first bought shares in Q4 2022. Paying an average of $114.44 per share, Capital One is expected to complete its $35.3 billion all-stock deal to buy Discover Financial (NYSE:DFS) in May. Given that CAS is adding shares, Sosin is more than okay with the merger. 

Its fourth holding is Cardlytics (NASDAQ:CDLX), a marketing intelligence provider. The hedge fund first bought shares in 2019. While it owns 12.53% of the company, its bet is well underwater, accounting for just 1.38% of its portfolio. 

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