Wasatch Global Investors, an asset management company, released its “Wasatch Micro-Cap Value Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. On Wednesday, September 18, the Federal Reserve reduced its key interest rate by half a percentage point, marking its first cut since 2020. Following this announcement, stocks reached all-time highs as the Fed indicated there would be more cuts planned for this year and the next. The strategy posted gains, outperforming the benchmark Russell Microcap® Index, which increased 8.29% during the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Wasatch Micro-Cap Value Strategy highlighted stocks like Champion Homes, Inc. (NYSE:SKY), in the third quarter 2024 investor letter. Skyline Champion Corporation renamed to Champion Homes, Inc. (NYSE:SKY) in August 2024. Champion Homes, Inc. (NYSE:SKY) engages in the manufacturing and sales of mobile homes and other manufactured housing. The one-month return of Champion Homes, Inc. (NYSE:SKY) was -16.67%, and its shares gained 28.16% of their value over the last 52 weeks. On January 3, 2025, Champion Homes, Inc. (NYSE:SKY) stock closed at $90.43 per share with a market capitalization of $5.191 billion.
Wasatch Micro-Cap Value Strategy stated the following regarding Champion Homes, Inc. (NYSE:SKY) in its Q3 2024 investor letter:
“The top contributor to strategy performance was Champion Homes, Inc. (NYSE:SKY). The company is one of the biggest homebuilders in North America, specializing in modular homes for the single-family, multi-family and hospitality segments as well as accessory dwelling units and park-model recreational vehicles. Champion’s focus on modular homes, which are less expensive than traditional houses, makes the company’s business a little more defensive than other homebuilders, and that defensive element was in favor during the period. Additionally, the stock is a beneficiary of lower interest rates. With the Federal Reserve finally lowering its benchmark rate in September, investors welcomed lower mortgage rates and an uptick in home-buying activity. While macroeconomic factors helped boost the stock this quarter, operating results have also been favorable. Regarding Champion’s latest quarterly results, we were particularly pleased to see gross margins remain stable, which signals the company’s ability to maintain pricing power in a more challenging housing market.”
A close up of the exterior of a factory-built home.
Champion Homes, Inc. (NYSE:SKY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Champion Homes, Inc. (NYSE:SKY) at the end of the third quarter which was 28 in the previous quarter. While we acknowledge the potential of Champion Homes, Inc. (NYSE:SKY) 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 Champion Homes, Inc. (NYSE:SKY) and shared Columbia Acorn Fund’s views on the company. Champion Homes, Inc. (NYSE:SKY) was the greatest detractor from Wasatch Micro-Cap Value Strategy’s performance during the second quarter of 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.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.