Here’s Why Next Century Growth Investors Small Cap Strategy Invested in Dutch Bros (BROS)

Next Century Growth Investors, LLC, an investment Management Company, released its “Small Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The equities market in 2024 saw mixed results in the second quarter. Small-cap indices generally posted negative results, whereas large-cap indices posted favorable results. The strategy returned (3.32)% net of fees in the quarter, compared to a (2.91)% return for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

NCG Small Cap Strategy highlighted stocks like Dutch Bros Inc. (NYSE:BROS), in the second quarter 2024 investor letter. Dutch Bros Inc. (NYSE:BROS) operates and franchises drive-thru shops. The one-month return of Dutch Bros Inc. (NYSE:BROS) was -20.16%, and its shares gained 2.43% of their value over the last 52 weeks. On August 29, 2024, Dutch Bros Inc. (NYSE:BROS) stock closed at $30.33 per share with a market capitalization of $4.677 billion.

NCG Small Cap Strategy stated the following regarding Dutch Bros Inc. (NYSE:BROS) in its Q2 2024 investor letter:

“Dutch Bros Inc. (NYSE:BROS) is an Oregon-based operational and franchising drive-through shop focused on hand crafted beverages. They have found success in a small footprint format in rural and suburban areas. The current geographic focus has primarily been on the west coast, but we feel this is a concept that could be successful nationwide with an eventual store base in excess of 4000 units.”

5 Highest Quality Coffee Chains in the US

A closeup of a customer tasting a freshly-made cold brew coffee product from the company’s shop.

Dutch Bros Inc. (NYSE:BROS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Dutch Bros Inc. (NYSE:BROS) at the end of the second quarter which was 33 in the previous quarter. In the second quarter, Dutch Bros Inc. (NYSE:BROS) generated $325 million in sales and $65 million in adjusted EBITDA, up 30% and 34%, respectively, over Q2 2023. While we acknowledge the potential of Dutch Bros Inc. (NYSE:BROS) 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 Dutch Bros Inc. (NYSE:BROS) and shared the list of best coffee stocks to buy. In addition, please check out our hedge fund investor letters Q2 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.