Baron Funds, an investment management company, released its “Baron Discovery Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Institutional Shares) declined 7.78% underperforming the 2.92% return for the Russell 2000 Growth Index. The lion’s share of negative attribution and 6.52% of negative performance of the fund during the quarter were attributed to the ten worst-performing equities. The firm believes downward movements are more technically tied to macroeconomic issues and the trading environment and could quickly revert. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Discovery Fund highlighted stocks like Floor & Decor Holdings, Inc. (NYSE:FND), in the second quarter 2024 investor letter. Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard surface flooring and related accessories. The one-month return of Floor & Decor Holdings, Inc. (NYSE:FND) was 10.88%, and its shares gained 11.02% of their value over the last 52 weeks. On August 22, 2024, Floor & Decor Holdings, Inc. (NYSE:FND) stock closed at $106.50 per share with a market capitalization of $11.413 billion.
Baron Discovery Fund stated the following regarding Floor & Decor Holdings, Inc. (NYSE:FND) in its Q2 2024 investor letter:
“Floor & Decor Holdings, Inc. (NYSE:FND) is a specialty retailer of hard-surface flooring and accessories in the U.S. While the company continues to open new stores and consolidate the hard surface flooring market through its large format stores with everyday low prices, the decline in housing turnover has put pressure on shorter-term sales trends. We maintain our long-term conviction. We view Floor & Decor as a differentiated, high-growth retailer offering a broader assortment of low-cost products than competitors. The company holds an 8% market share in the highly fragmented $21 billion U.S. hard-surface flooring market where we believe it will continue to gain share. We think the replacement of carpet with hard-surface flooring, which we see as a secular shift in the flooring industry, will aid growth. We believe Floor & Decor can continue to grow its store count in the 15% to 20% range annually.”
An overhead view of a website displaying the multiple options of flooring products available for purchase.
Floor & Decor Holdings, Inc. (NYSE:FND) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Floor & Decor Holdings, Inc. (NYSE:FND) at the end of the second quarter which was 26 in the previous quarter. In the second quarter, Floor & Decor Holdings, Inc.’s (NYSE:FND) total sales declined by 0.2% to $1.133,100,000 and comparable store sales decreased by 9% compared to Q2 2023. While we acknowledge the potential of Floor & Decor Holdings, Inc. (NYSE:FND) 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 Floor & Decor Holdings, Inc. (NYSE:FND) and shared the list of best home improvement stocks to buy. In addition, please check out our hedge fund investor letters Q2 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.
