Next Century Growth Investors, LLC, an investment Management Company, released its “Small Cap Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The market continued its rally in the first quarter of 2024; it paused in January but resumed its upward trajectory in February and March. In the quarter the small-cap strategy generated gains from most sectors, except technology where two tech stocks contributed significantly to the index performance. Against this backdrop, the strategy returned 9.35% (net of fees) in the quarter, compared to a 7.58% return for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Next Century Growth Small Cap Strategy highlighted stocks like CAVA Group, Inc. (NYSE:CAVA), in the first quarter 2024 investor letter. CAVA Group, Inc. (NYSE:CAVA) owns and operates a chain of restaurants under the CAVA brand. The one-month return of CAVA Group, Inc. (NYSE:CAVA) was 7.84%, and its shares gained 141.31% of their value over the last 52 weeks. On July 1, 2024, CAVA Group, Inc. (NYSE:CAVA) stock closed at $95.27 per share with a market capitalization of $10.863 billion.
Next Century Growth Small Cap Strategy stated the following regarding CAVA Group, Inc. (NYSE:CAVA) in its first quarter 2024 investor letter:
“CAVA Group, Inc. (NYSE:CAVA) is a fast casual restaurant chain serving authentic Mediterranean cuisine, featuring customizable bowls and pitas. CAVA currently owns and operates >300 stores, and the company targets a 15% plus new store growth rate. The intermediate goal is to have 1,000 stores by 2032 with plenty of opportunity to grow beyond that level. The company already delivers solid restaurant level margins >20% and they believe 3-5% same store sales growth is achievable over time. As the business matures, they should be able to leverage G&A expense which should lead to strong earnings growth over many years.”
A close-up image of a colorful salad platter with toppings and dressings.
CAVA Group, Inc. (NYSE:CAVA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held CAVA Group, Inc. (NYSE:CAVA) at the end of the first quarter which was 19 in the previous quarter. The first quarter CAVA revenue was $256.3 million, representing a 30.3% year-over-year increase. While we acknowledge the potential of CAVA Group, Inc. (NYSE:CAVA) 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.
We discussed CAVA Group, Inc. (NYSE:CAVA) in another article and shared the list of stocks to buy and sell before third quarter according to Jim Cramer. 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.
