Wasatch Global Investors, an asset management company, released its “Wasatch Micro-Cap Growth-U.S. Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter, U.S.-based micro-cap companies benefited from optimism surrounding decreasing interest rates and a smooth economic transition, which led to greater investor appetite for risk. The strategy appreciated and outperformed the benchmark Russell Microcap® Growth Index in the quarter, which returned 8.57%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Wasatch Micro-Cap Growth-U.S. Strategy highlighted stocks like Kornit Digital Ltd. (NASDAQ:KRNT), in the third quarter 2024 investor letter. Kornit Digital Ltd. (NASDAQ:KRNT) designs and markets digital printing solutions for the fashion, apparel, and home decor segments. The one-month return of Kornit Digital Ltd. (NASDAQ:KRNT) was -3.30%, and its shares gained 84.35% of their value over the last 52 weeks. On January 2, 2025, Kornit Digital Ltd. (NASDAQ:KRNT) stock closed at $30.75 per share with a market capitalization of $1.462 billion.
Wasatch Micro-Cap Growth-U.S. Strategy stated the following regarding Kornit Digital Ltd. (NASDAQ:KRNT) in its Q3 2024 investor letter:
“Kornit Digital Ltd. (NASDAQ:KRNT) was the strategy’s third-largest contributor. The company, which develops, designs and markets digital printing solutions for the global printed textile industry, had been negatively impacted this year by rising interest rates and an uncertain economic environment, which caused some companies to cut back on expenditures and delay purchase of Kornit’s printers. But with the recent shift in expectations toward declining interest rates, Kornit has seen early signs of an acceleration in purchasing among its clients, which lifted its share price. The company’s shares were also boosted by its announcement of a new pricing model that enables its customers to purchase screen printing based on a set minimum purchase volume instead of paying for an entire screen printer upfront. We believe this easier, less capital-intensive option to help Kornit’s clients meet their printing needs will contribute to the company’s profitability going forward.”
An industrial printing machine churning out specialized orders for a major client.
Kornit Digital Ltd. (NASDAQ:KRNT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Kornit Digital Ltd. (NASDAQ:KRNT) at the end of the third quarter which was 14 in the previous quarter. Kornit Digital Ltd. (NASDAQ:KRNT) reported revenues of $50.7 million in the third quarter and adjusted EBITDA margin of 2.9%. While we acknowledge the potential of Kornit Digital Ltd. (NASDAQ:KRNT) 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 Kornit Digital Ltd. (NASDAQ:KRNT) and shared Meridian Contrarian Fund’s views on the company. 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.