Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.48% compared to a 10.15% return for the Russell 2000 Value Index. Year-to-date, the fund returned 8.1% compared to a 9.22% return for the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like Deckers Outdoor Corporation (NYSE:DECK) in the third quarter 2024 investor letter. Deckers Outdoor Corporation (NYSE:DECK) is a footwear, apparel, and accessories company for everyday casual lifestyle and high-performance activities. The one-month return of Deckers Outdoor Corporation (NYSE:DECK) was 9.26%, and its shares gained 67.67% of their value over the last 52 weeks. On November 8, 2024, Deckers Outdoor Corporation (NYSE:DECK) stock closed at $175.61 per share with a market capitalization of $26.679 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Deckers Outdoor Corporation (NYSE:DECK) in its Q3 2024 investor letter:
“Deckers Outdoor Corporation (NYSE:DECK) is a footwear and apparel company that owns the UGG, Hoka, Teva, Sanuk, and Koolaburra brands. Management has done a terrific job growing and extending the UGG franchise. Now they are repeating their success with Hoka running shoes. At roughly thirty times forward earnings (as of Sep. 31, 2024), we have weighed Deckers’ valuation against the quality of its management team, strong brands, and net cash balance sheet and have trimmed the position.
We first bought a small position in Deckers in 2015 and 2016 when the company was struggling with supply chain issues. The stock is up more than ten times since then on excellent operating performance and we have trimmed all the way up. This year, the market cap exceeded $20 billion and we trimmed even more substantially. Given the company’s exceptional financial performance and growth, we think the stock still trades in the ”range of reasonableness” and continue to hold a small position.”
A customer browsing a retail store, finding the perfect footwear for their casual outfits.
Deckers Outdoor Corporation (NYSE:DECK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Deckers Outdoor Corporation (NYSE:DECK) at the end of the second quarter which was 42 in the previous quarter. In the second quarter of fiscal year 2025, Deckers Outdoor Corporation (NYSE:DECK) generated $$1.311 billion in revenues, up 20% from the previous year. While we acknowledge the potential of Deckers Outdoor Corporation (NYSE:DECK) 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 Deckers Outdoor Corporation (NYSE:DECK) and shared the list of best RV and camping stocks to buy. 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.