Here’s Why TimesSquare Capital U.S. Small Cap Growth Strategy Decided to Sell AtriCure (ATRC)

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the fund returned -1.59% (gross) and -1.83% (net), compared to a -2.92% return for the Russell 2000 Growth Index. The equity markets performed well in the second quarter, as long as one held only a handful of the biggest, fastest-growing U.S. stocks. Despite profitability turning positive this quarter following negative or neutral results in previous quarters, momentum remained the most important component in the worldwide market. In addition, please check the fund’s top five holdings to know its best picks in 2024.

TimesSquare Capital Management U.S. Small Cap Growth Strategy highlighted stocks like AtriCure, Inc. (NASDAQ:ATRC), in the second quarter 2024 investor letter. AtriCure, Inc. (NASDAQ:ATRC) develops devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers. The one-month return of AtriCure, Inc. (NASDAQ:ATRC) was 18.84%, and its shares lost 35.34% of their value over the last 52 weeks. On September 17, 2024, AtriCure, Inc. (NASDAQ:ATRC) stock closed at $28.07 per share with a market capitalization of $1.367 billion.

TimesSquare Capital Management U.S. Small Cap Growth Strategy stated the following regarding AtriCure, Inc. (NASDAQ:ATRC) in its Q2 2024 investor letter:

“Our preferences among Health Care stocks are those companies providing novel therapies for unmet needs that deserve premium pricing, or specialized service providers. AtriCure, Inc. (NASDAQ:ATRC) develops and manufactures devices for surgical ablation of cardiac tissue. We decided to exit the position due to Medtronic’s new product that is a direct competitor to AtriCure’s AtriClip device. Its shares declined by -23% while held in the quarter.”

A medical technician holding a modern ablation device in a hospital operating theatre.

AtriCure, Inc. (NASDAQ:ATRC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held AtriCure, Inc. (NASDAQ:ATRC) at the end of the second quarter which was 24 in the previous quarter. AtriCure, Inc. (NASDAQ:ATRC) reported $116.3 million in revenues in the second quarter, up 15.2% on a reported basis and 15.4% on a constant currency compared to Q2 2023. While we acknowledge the potential of AtriCure, Inc. (NASDAQ:ATRC) 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 AtriCure, Inc. (NASDAQ:ATRC) and shared TimesSquare Capital U.S. Small Cap Growth Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.