Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -2.62% compared to a -3.64% return for the Russell 2000 Value Index. In the first half of 2024, the fund returned 0.65% versus -0.85% for the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like Deckers Outdoor Corporation (NYSE:DECK) in the second quarter 2024 investor letter. Deckers Outdoor Corporation (NYSE:DECK) designs manufactures, and markets footwear, apparel, and accessories. Deckers Outdoor Corporation’s (NYSE:DECK) one-month return was 6.15%, and its shares gained 69.63% of their value over the last 52 weeks. On August 13, 2024, Deckers Outdoor Corporation (NYSE:DECK) stock closed at $944.32 per share with a market capitalization of $23.996 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Deckers Outdoor Corporation (NYSE:DECK) in its Q2 2024 investor letter:
“Deckers Outdoor Corporation (NYSE:DECK) is a footwear and apparel company that owns the UGG, Hoka, Teva, Sanuk, and Koolaburra brands. We think management has done a terrific job growing and extending the UGG franchise. Now they are replicating that success with Hoka running shoes, which surpassed $1 billion in sales in 2023. At over thirty times forward earnings (as of June 30, 2024), we have weighed Deckers’ valuation against the quality of its management team, strong brands, and net cash balance sheet and have trimmed our position. We first bought a small position in Deckers in 2015 and 2016 when the company was struggling with supply chain issues. Its stock price has increased more than ten times since then because of excellent operating performance, and we have trimmed all the way up. Given the company’s exceptional financial performance and growth, the stock trades on the higher side of our “range of reasonableness” and we have continued to trim accordingly.”
A customer browsing a retail store, finding the perfect footwear for their casual outfits.
Deckers Outdoor Corporation (NYSE:DECK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Deckers Outdoor Corporation (NYSE:DECK) at the end of the first quarter which was 38 in the previous quarter. In the first quarter of fiscal year 2025, Deckers Outdoor Corporation (NYSE:DECK) generated $825 million in revenues up 22% from the previous year. While we acknowledge the potential of Deckers Outdoor Corporation (NYSE:DECK) 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 Deckers Outdoor Corporation (NYSE:DECK) and shared FPA Queens Road Small Cap Value Fund’s views on the company in the previous quarter. 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.
