Is Five Below (FIVE) A Smart Long-Term Investment?

ClearBridge Investments, an investment management firm, published its “Mid Cap Growth Strategy” fourth quarter 2021 investor letter – a copy of which can be downloaded here. During the fourth quarter, the ClearBridge Mid Cap Growth Strategy outperformed its Russell Midcap Growth benchmark. On an absolute basis, the Strategy had gains across eight of the 10 sectors in which it was invested during the quarter (out of 11 sectors total), with the IT sector the leading contributor, while the consumer discretionary sector was the primary detractor. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

ClearBridge Investments Mid Cap Growth Strategy, in its Q4 2021 investor letter, mentioned Five Below, Inc. (NASDAQ:FIVE) and discussed its stance on the firm. Founded in 2002, Five Below, Inc. (NASDAQ:FIVE) is a Philadelphia, Pennsylvania-based discount store company with a $9.2 billion market capitalization, and is currently spearheaded by its CEO, Joel D Anderson. Five Below, Inc. (NASDAQ:FIVE) delivered a -19.89% return since the beginning of the year, while its 12-month returns are down by -14.86%. The stock closed at $165.74 per share on April 05, 2022.

Here is what ClearBridge Investments Mid Cap Growth Strategy has to say about Five Below, Inc. (NASDAQ:FIVE) in its Q4 2021 investor letter:

“Also in the consumer space, new addition Five Below is a specialty value retailer that provides a variety of lowcost merchandise targeting young children and families. With very strong new store unit economics and a national store target 2x the size of its existing footprint, the company has been growing its sales at a roughly 20% pace with similar bottom-line growth, which we believe can continue to compound at that rate for the next several years.”

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Our calculations show that Five Below, Inc. (NASDAQ:FIVE) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Five Below, Inc. (NASDAQ:FIVE) was in 35 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 40 funds in the previous quarter. Five Below, Inc. (NASDAQ:FIVE) delivered a -13.23% return in the past 3 months.

In April 2021, we also shared another hedge fund’s views on Five Below, Inc. (NASDAQ:FIVE) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.