Polen Capital, an investment management company, released its “Polen U.S. SMID Company Growth Strategy” second-quarter 2024 investor letter. A copy of the same can be downloaded here. The portfolio returned -8.42% gross and -8.71% net of fees in the second quarter compared to a -4.22% return for the Russell 2500 Growth Index. In the second quarter, there was a shift from lower-quality, high-priced stocks to a more cautious approach due to concerns about high inflation. This led to a widening performance gap between small and mid-sized and large company stocks, as investors turned to lower-volatility sectors. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen U.S. SMID Company 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 -32.25%, and its shares lost 65.27% of their value over the last 52 weeks. On July 29, 2024, Five Below, Inc. (NASDAQ:FIVE) stock closed at $71.92 per share with a market capitalization of $3.961 billion.
Polen U.S. SMID Company Growth Strategy stated the following regarding Five Below, Inc. (NASDAQ:FIVE) in its Q2 2024 investor letter:
“Five Below, Inc. (NASDAQ:FIVE), which we’ve owned for just over two years, is a discount retailer that blends the concepts of a toy store and a dollar store. We view Five Below’s results to be robust over the period that we’ve been invested, and the company has been an attractive destination for cost-conscious consumers in a highly inflationary environment. More recently, however, the business has been pressured by weaker consumer spending and higher. shrink (losses from theft or damage), which have weighed on the stock. Despite these near-term headwinds, we continue to believe Five Below is well-positioned as a long-term compounder.”
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, 39 hedge fund portfolios held Five Below, Inc. (NASDAQ:FIVE) at the end of the first quarter which was 33 in the previous quarter. Five Below, Inc.’s (NASDAQ:FIVE) sales climbed by 11.8% to $811.9 million in the first quarter of 2024 from $726.2 million in Q1 2023. Q1 results were below expectations as the second half of the quarter saw a notable downturn in sales. 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 Jim Cramer’s latest portfolio: top calls before August. Artisan Mid Cap Fund ended its investment campaign in Five Below, Inc. (NASDAQ:FIVE) during Q2 2024. 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.
