Tencent Music Entertainment Group (TME) Shares Pulled Back After Strong Performance

Polen Capital, an investment management company, released its “Polen Global SMID Company Growth” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.41 (gross) and 7.40% (net) compared to a 9.37% return for the MSCI ACWI SMID Net Index. Negative stock selection and sector and country allocation led the portfolio to underperform in the quarter. Despite volatile market sentiments, global small and mid-cap equities posted gains in the third quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Polen Global SMID Company Growth highlighted stocks like Tencent Music Entertainment Group (NYSE:TME) in the Q3 2024 investor letter. Tencent Music Entertainment Group (NYSE:TME) operates online music entertainment platforms that provide music streaming, online karaoke, and live streaming services. The one-month return of Tencent Music Entertainment Group (NYSE:TME) was -1.25%, and its shares gained 35.12% of their value over the last 52 weeks. On November 19, 2024, Tencent Music Entertainment Group (NYSE:TME) stock closed at $11.15 per share with a market capitalization of $19.692 billion.

Polen Global SMID Company Growth stated the following regarding Tencent Music Entertainment Group (NYSE:TME) in its Q3 2024 investor letter:

“Tencent Music Entertainment Group (NYSE:TME), China’s equivalent to Spotify, pulled back after a period of solid performance. Its music business has performed well over the past 12 months in a robust pricing environment, leading to compelling revenue and earnings growth. However, in the most recent quarterly results, revenues declined year-on-year, and while profits rose 22.5% over the same period, the company guided for more conservative growth going forward. Company management expects subscriber growth to slow, and several sell-side analysts lowered price targets over the next 12 months.”

A singing performer silhouetted on a spotlighted online stage.

Tencent Music Entertainment Group (NYSE:TME) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held Tencent Music Entertainment Group (NYSE:TME) at the end of the third quarter which was 25 in the previous quarter. While we acknowledge the potential of Tencent Music Entertainment Group (NYSE:TME) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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