Value Investing Legend Howard Marks Is Buying This Stock Down 30%. Should You Buy?

Renowned value investor Howard Marks recently acquired shares in Sea Limited (NYSE:SE) at a 30% discount to its previous price. This Southeast Asian tech firm operates Shopee, a leading online shopping platform, alongside fintech arm Monee and gaming subsidiary Garena. The stock's recent decline may have caught Marks' attention, prompting his investment.

Sea's Shopee platform is expanding rapidly, particularly in Brazil, and the company reported a 48% year-over-year revenue increase, surpassing analyst expectations. Shopee's ad business, in particular, grew more than 70%, contributing to a projected $1 billion in adjusted profit for the full year. Monee's revenue surged 59%, with its loan portfolio growing 62% and bad loans remaining minimal at 1% of total outstanding.

Garena's bookings rose 15%, and profit margin expanded by 17%. While earnings per share fell short of analyst forecasts, the company's growth initiatives and robust cash reserves provide a solid foundation. However, competition from platforms like TikTok Shop, and Amazon, as well as currency fluctuations, pose potential challenges.

Despite these risks, Marks remains confident in Sea's long-term prospects, particularly its ability to monetize user growth and maintain profitability across its diverse business segments.