Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund returned 4.17% net compared to a 5.23% return for the Russell 2500 Index. Furthermore, the fund underperformed its secondary benchmark, the Russell 2500 Value Index, which returned 4.37% during the same period. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Meridian Contrarian Fund highlighted stocks like SMART Global Holdings, Inc. (NASDAQ:SGH) in the second quarter 2023 investor letter. Headquartered in Milpitas, California, SMART Global Holdings, Inc. (NASDAQ:SGH) provides specialty memory solutions. On October 4, 2023, SMART Global Holdings, Inc. (NASDAQ:SGH) stock closed at $23.88 per share. One-month return of SMART Global Holdings, Inc. (NASDAQ:SGH) was -1.73%, and its shares gained 64.69% of their value over the last 52 weeks. SMART Global Holdings, Inc. (NASDAQ:SGH) has a market capitalization of $1.196 billion.
Meridian Contrarian Fund made the following comment about SMART Global Holdings, Inc. (NASDAQ:SGH) in its Q2 2023 investor letter:
“SMART Global Holdings, Inc. (NASDAQ:SGH) is a diversified technology company that designs and manufactures solutions in the computing, memory, and LED industries. We first invested in the company in 2020 on the heels of an earnings decline due to volatility in the memory business, order delays in the high-performance computing business, and temporarily dilutive investments in new products. Individually, none of these developments are particularly unusual, but it is uncommon for all three to turn negative simultaneously. Our initial investment thesis was that the company’s new management team would smooth out such volatility while driving growth through effective capital allocation and organic investment. We also believed strong secular trends were in place for the memory business, given the increased importance of memory for computing speeds and climbing demand for device memory overall, and the high-performance computing industry due to the rising integration of artificial intelligence (AI) and machine learning. During the quarter, SMART Global’s stock rallied as the company delivered an impressive earnings report, led by AI-related strength in its high-performance computing business. Although AI has only recently hit the mainstream, SMART Global has been involved in the space since its acquisition of Penguin Computing in 2018. Additionally, the company sold a volatile Brazil division, a transaction that could temporarily lower earnings, but we believe will improve earnings consistency over time and therefore boost the stock’s valuation multiple. The stock trades at a reasonable valuation, which we believe will improve as the company demonstrates growth and more investors learn of this under-the-radar AI investment. We continued to hold a large position in SMART Global.”
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SMART Global Holdings, Inc. (NASDAQ:SGH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held SMART Global Holdings, Inc. (NASDAQ:SGH) at the end of second quarter which was 17 in the previous quarter.
We discussed SMART Global Holdings, Inc. (NASDAQ:SGH) in another article and shared ClearBridge Small Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 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.
