Investment advisory firm Ithaka Group released the “Ithaka US Growth Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The market continued to rise, which began in late October 2023, and gained across multiple asset classes. However, the portfolio underperformed in this up-market, increasing 0.4% (gross of fees) compared to the R1000G, which increased by 3.2%. Stock selection drove the portfolio to underperform in the quarter, with a negligible tailwind from sector allocation. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Ithaka US Growth Strategy highlighted stocks like E.l.f. Beauty, Inc. (NYSE:ELF), in the third quarter 2024 investor letter. E.l.f. Beauty, Inc. (NYSE:ELF) is a beauty company that offers cosmetic and skin care products. The one-month return of E.l.f. Beauty, Inc. (NYSE:ELF) was 3.41%, and its shares gained 15.53% of their value over the last 52 weeks. On October 30, 2024, E.l.f. Beauty, Inc. (NYSE:ELF) stock closed at $109.22 per share with a market capitalization of $6.387 billion.
Ithaka US Growth Strategy stated the following regarding E.l.f. Beauty, Inc. (NYSE:ELF) in its Q3 2024 investor letter:
“E.l.f. Beauty, Inc. (NYSE:ELF) is a multi-product-line beauty company that offers inclusive, accessible, clean, vegan and cruelty-free cosmetics and skin care products that target savvy Gen Z and Millennial customers. The company’s moat stems from offering a product that is high quality at affordable prices, employing an industry leading 13-week production cycle, and utilizing a disruptive marketing engine, which is heavily focused on viral growth through digital/social media. ELF’s underperformance in the quarter was due to its F1Q25 earnings announcement that featured an expected beat on the top and bottom lines, coupled with an unexpectedly tepid forward guidance. The guidance “miss” combined with the stock’s demanding valuation multiple provided short-term investors with a rationale to sell the stock.”
A close up of the lip and eye products from the company on a model in a fashion and beauty shoot.
E.l.f. Beauty, Inc. (NYSE:ELF) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held E.l.f. Beauty, Inc. (NYSE:ELF) at the end of the second quarter which was 33 in the previous quarter. E.l.f. Beauty, Inc.’s (NYSE:ELF) revenue grew 50% year-over-year in the fiscal first quarter of 2025, driven by strong sales across all channels. While we acknowledge the potential of E.l.f. Beauty, Inc. (NYSE:ELF) 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 E.l.f. Beauty, Inc. (NYSE:ELF) and shared Jim Cramer’s latest stock picks. E.l.f. Beauty, Inc. (NYSE:ELF) detracted from the performance of ClearBridge Growth Strategy during Q3 2024. In addition, please check out our hedge fund investor letters Q3 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.