Optimist Fund, an investment management company, released its third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund appreciated approximately 28% in the third quarter, fueled by strong fundamental performance across its holdings. Over the first five years, the fund generated an annualized return of 11.5%, net of fees. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Optimist Fund highlighted stocks like First Advantage Corporation (NASDAQ:FA), in the third quarter 2024 investor letter. First Advantage Corporation (NASDAQ:FA) is a global provider of employment background screening, identity, and verification solutions. The one-month return of First Advantage Corporation (NASDAQ:FA) was 11.66%, and its shares gained 18.80% of their value over the last 52 weeks. On December 13, 2024, First Advantage Corporation (NASDAQ:FA) stock closed at $19.34 per share with a market capitalization of $3.339 billion.
Optimist Fund stated the following regarding First Advantage Corporation (NASDAQ:FA) in its Q3 2024 investor letter:
“Lastly, in terms of notable portfolio changes in the quarter, we made a new investment in First Advantage Corporation (NASDAQ:FA), a leading provider of background checks. What makes First Advantage particularly interesting right now is the pending acquisition of their largest competitor that roughly doubles the size of the business. Based on our math, we think First Advantage is trading at an attractive valuation of 14x 2025 earnings per share for a business that should grow earnings over 20% annually for the foreseeable future. Should the position become a top 10 holding we will dive deeper into the investment thesis.”
A close-up of the fingers of a technician scanning an ID, verifying the Enrollment Verification process.
First Advantage Corporation (NASDAQ:FA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held First Advantage Corporation (NASDAQ:FA) at the end of the third quarter which was 16 in the previous quarter. First Advantage Corporation’s (NASDAQ:FA) third-quarter revenues were $199.1 million, almost in line with Q3 2023, and $14.6 million, or 8% higher than in the second quarter. While we acknowledge the potential of First Advantage Corporation (NASDAQ:FA) 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 First Advantage Corporation (NASDAQ:FA) and shared Diamond Hill Small Cap Fund’s views on the company. 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.