What Makes Sea Limited (SE) an Investment Bet?

Sustainable Growth Advisers (SGA), an investment management company, released its fourth-quarter investor letter for its “Emerging Markets Growth Strategy.” A copy of the letter can be downloaded here. The fourth quarter of 2025 marked a strong divergence from the market. Market leadership by AI beneficiaries and revival of cyclical sectors dominated the market, while quality growth strategies faced challenges. In Q4 2025, the portfolio returned 0.8% (Gross) and 0.6% (Net) compared to the MSCI EM Net TR Index return of 4.7% and the MSCI EM Growth Net TR Index return of 3.3%. In 2025, the portfolio delivered strong returns of 23.8% (Gross) and 22.8% (Net) but lagged the 33.6% and 34.3% returns for the indexes, respectively. The portfolio projects 13% revenue growth and 16% earnings growth annually for the next three years. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, SGA Emerging Markets Growth Strategy highlighted Sea Limited (NYSE:SE). Sea Limited (NYSE:SE) is a Singapore-based consumer internet company, combining e-commerce, digital payment, and entertainment. On February 26, 2026, Sea Limited (NYSE:SE) stock closed at $110.92 per share. One-month return of Sea Limited (NYSE:SE) was -6.31%, and its shares lost 14.25% over the past twelve months. Sea Limited (NYSE:SE) has a market capitalization of $64.687 billion.

SGA Emerging Markets Growth Strategy stated the following regarding Sea Limited (NYSE:SE) in its fourth quarter 2025 investor letter:

"During the quarter, we initiated a new position in Sea Limited (NYSE:SE), a Southeast Asian consumer internet company with an integrated ecosystem combining e-commerce, digital payments, and entertainment. Sea has a diversified business model, with its Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services; Garena, a digital entertainment platform for users to access mobile and PC online games; and Monee digital financial services offering credit, mobile wallets, payment processing, banking, and insurtech services. Sea operates in markets with unique geopolitical, cultural, and economic complexities, and the company is ahead in localizing its products and content, making it difficult for competitors to disrupt at scale. Sea’s e-commerce business benefits from low penetration rates and rising digital adoption, while its logistics network and localized approach create meaningful competitive advantages that are difficult for competitors to replicate. The company’s digital financial services segment is scaling rapidly, leveraging accumulated user data and e-commerce use cases to drive engagement and profitability. In gaming, Sea’s deep understanding of local audiences and self-developed franchises like Free Fire are favorable for emerging markets audiences where low-end smartphones dominate. While near-term margin volatility is expected as Sea invests in logistics, fulfillment, and new initiatives such as free shipping membership, management’s focus on building long-term competitive advantages and expanding addressable markets positions the company well for sustainable growth."

Sea Limited (NYSE:SE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 113 hedge fund portfolios held Sea Limited (NYSE:SE) at the end of the fourth quarter, up from 102 in the previous quarter. While we acknowledge the potential of Sea Limited (NYSE:SE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered SEA LIMITED (NYSE:SE) and shared Hayden Capital's views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.