Giverny Capital, an asset management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, Giverny Capital Asset Management’s model portfolio declined by 8.21%, net of fees, vs. a decline of 4.60% for the Standard & Poor’s 500 Index. For the trailing twelve-month period, the GCAM model generated a return of 9.63% vs. 15.65% for the Index, also net of fees. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Giverny Capital Asset Management mentioned Five Below, Inc. (NASDAQ:FIVE) and explained its insights for the company. Founded in 2002, Five Below, Inc. (NASDAQ:FIVE) is a Philadelphia, Pennsylvania-based discount store company with a $9.3 billion market capitalization. Five Below, Inc. (NASDAQ:FIVE) delivered a -19.25% return since the beginning of the year, while its 12-month returns are down by -16.99%. The stock closed at $167.07 per share on April 28, 2022.
Here is what Giverny Capital Asset Management has to say about Five Below, Inc. (NASDAQ:FIVE) in its Q1 2022 investor letter:
“Five Below is a variety store aimed at young people – teens and tweens. The merchandise is an eclectic mix of toys, school accessories, candy, low-priced electronics, room décor, and apparel. Stores are colorful and fun, with a strong focus on value. Five Below more than doubled earnings in 2021, coming out of the pandemic, and management believes earnings should grow by about 20% annually for years to come. The company has 1,200 stores around the country; management believes that number can grow to 3,500 by 2030. Encouragingly, the stores do well everywhere — suburban shopping centers, small towns, big cities.
Investors admire Five Below, putting a rich valuation on the stock. The omicron wave of coronavirus hurt store traffic in January and February, and some inflationary cost pressures are pinching margins. This bad news was not received well. But Five Below arguably has the strongest growth profile in brick-and-mortar retail and the stock is more reasonably priced after the recent correction. We’re very confident in this business and expect to own it for a long time. We bought more shares during the quarter.”
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Our calculations show that Five Below, Inc. (NASDAQ:FIVE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Five Below, Inc. (NASDAQ:FIVE) was in 35 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 40 funds in the previous quarter. Five Below, Inc. (NASDAQ:FIVE) delivered a 5.18% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Five Below, Inc. (NASDAQ:FIVE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
