Wasatch Global Investors, an asset management company, released its “Wasatch Long/Short Alpha Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. US small caps experienced modest gains in Q4, driven by presidential election and anticipated economic growth and less regulation. However, markets fell in December as the Federal Reserve hinted that it could have to maintain interest rates higher in 2025 than investors had first anticipated. In this case, the fund fell -8.28% and trailed the benchmark Russell 2500™ Index, which returned 0.62%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Wasatch Long/Short Alpha Fund emphasized stocks such as HealthEquity, Inc. (NASDAQ:HQY). HealthEquity, Inc. (NASDAQ:HQY) provides financial technology solutions for healthcare and spending decisions. The one-month return of HealthEquity, Inc. (NASDAQ:HQY) was -10.64%, and its shares gained 124.96% of their value over the last 52 weeks. On March 18, 2025, HealthEquity, Inc. (NASDAQ:HQY) stock closed at $101.67 per share with a market capitalization of $8.811 billion.
Wasatch Long/Short Alpha Fund stated the following regarding HealthEquity, Inc. (NASDAQ:HQY) in its Q4 2024 investor letter:
“HealthEquity, Inc. (NASDAQ:HQY) was another top contributor. HealthEquity is the largest U.S. non-bank custodian for health savings accounts (HSAs). Along with their primary business of offering HSAs, the company facilitates employer-sponsored lifestyle and commuter benefits. The stock was up this quarter as interest rates rose and the Federal Reserve indicated it may keep interest rates higher for longer than investors may expect. HealthEquity benefits from higher rates because it earns more from some of the money it holds on deposit for customers. While this drove the stock in the fourth quarter, we don’t own the stock based on a view of interest rates. Instead, we think HealthEquity is poised for long-term growth as more employers offer HSAs to their employees.”
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HealthEquity, Inc. (NASDAQ:HQY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held HealthEquity, Inc. (NASDAQ:HQY) at the end of the fourth quarter compared to 23 in the third quarter. In the third quarter of fiscal 2025, HealthEquity, Inc.’s (NASDAQ:HQY) revenue increase 21% year-over-year. While we acknowledge the potential of HealthEquity, Inc. (NASDAQ:HQY) 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 HealthEquity, Inc. (NASDAQ:HQY) and shared the list of Baron Health Care Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 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.