TimesSquare Capital Management, an equity investment management company, released its “U.S. Mid Cap Growth Strategy” second-quarter investor letter. A copy of the same can be downloaded here. The equity markets performed well in the second quarter, as long as one held only a small number of the biggest, fastest-growing U.S. stocks. Given the Magnificent Seven’s superior performance, differences in growth and value among large caps were downplayed. There wasn’t much style diversity between mid-caps, small caps, or outside the U.S. In the second quarter, the strategy returned -2.94% (gross) and -3.14% (net) while the Russell Midcap Growth Index returned -3.21%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
TimesSquare Capital U.S. Mid Cap Growth Strategy highlighted stocks like Five Below, Inc. (NASDAQ:FIVE), in the second quarter 2024 investor letter. Five Below, Inc. (NASDAQ:FIVE) is a US-based specialty value retailer. The one-month return of Five Below, Inc. (NASDAQ:FIVE) was 18.92%, and its shares lost 44.29% of their value over the last 52 weeks. On September 11, 2024, Five Below, Inc. (NASDAQ:FIVE) stock closed at $89.58 per share with a market capitalization of $4.927 billion.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding Five Below, Inc. (NASDAQ:FIVE) in its Q2 2024 investor letter:
“Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. During the quarter we sold out of Five Below, Inc. (NASDAQ:FIVE), the discount retailer focused on teens and pre-teens with most goods priced less than $5. Five Below’s revenues, earnings, and guidance all fell short of expectations, which already had been tempered by prior quarterly weakness. We had expected some indications that Five Below’s business had passed through the worst of the macroeconomic influences, but it became apparent that was still to come. Without that clarity, we exited the position, which was down -37% during the time we owned it this quarter.”
A family happily shopping for everyday items in a specialty retail store.
Five Below, Inc. (NASDAQ:FIVE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Five Below, Inc. (NASDAQ:FIVE) at the end of the second quarter which was 39 in the previous quarter. Five Below, Inc.’s (NASDAQ:FIVE) sales increased by 9.4% year-over-year to $830 million in the second quarter of 2024 while comparable sales were down by 5.7%. While we acknowledge the potential of Five Below, Inc. (NASDAQ:FIVE) 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 Five Below, Inc. (NASDAQ:FIVE) and shared Columbia Acorn Fund’s views on the company. 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.
