Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, the strategy gained but underperformed the benchmark, the Russell 2000 Growth Index which rose 7.58%. The broader Russell 2000 Index increased 5.18% during the same period. Holdings in health care and consumer staples—and lack of exposure in materials, utilities, and communication services- contributed to the relative performance of the strategy, while holdings in information technology, consumer discretionary, and industrials detracted. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Wasatch Small Cap Growth Strategy highlighted stocks like Five9, Inc. (NASDAQ:FIVN), in the first quarter 2024 investor letter. Five9, Inc. (NASDAQ:FIVN) provides intelligent cloud software for contact centers, with a market capitalization of $3.242 billion. The one-month return of Five9, Inc. (NASDAQ:FIVN) was -17.59%, and its shares lost 42.00% of their value over the last 52 weeks. On June 10, 2024, Five9, Inc. (NASDAQ:FIVN) stock closed at $43.89 per share.
Wasatch Small Cap Growth Strategy stated the following regarding Five9, Inc. (NASDAQ:FIVN) in its first quarter 2024 investor letter:
“Another significant detractor was Five9, Inc. (NASDAQ:FIVN), which offers cloud-based software to help contact centers more efficiently interact with customers and prospects. We own the company for its competitive advantages in a “remote” world where contact centers are strategically more important as the key points of customer engagement. Even with its growth rate slowing somewhat, Five9 has continued to generate strong operating results. We think the stock was down primarily on investor concerns that AI may pose a threat to the company. In fact, Five9 is already using AI to handle some interactions and the results have been positive. As part of our ongoing research, we’re analyzing both sides of the AI debate and how our companies could be affected by AI over the long term.”
An IT engineer working on a laptop as planograms for a cloud-based virtual contact center platform appear on the monitor.
Five9, Inc. (NASDAQ:FIVN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Five9, Inc. (NASDAQ:FIVN) at the end of the first quarter which was 52 in the previous quarter. Five9, Inc. (NASDAQ:FIVN) reported $247 million in revenues, a 13% year-over-year increase driven by subscription revenue. While we acknowledge the potential of Five9, Inc. (NASDAQ:FIVN) 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.
In another article, we discussed Five9, Inc. (NASDAQ:FIVN) and shared RiverPark Large Growth Fund’s views on the company. Five9, Inc. (NASDAQ:FIVN) detracted from Conestoga Capital Advisors’ performance in Q1 2024. In addition, please check out our hedge fund investor letters Q1 2024 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.
