Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. Small-cap stocks experienced the most gains in 2023 and the first quarter of 2024, with names linked to the advancement of artificial intelligence (AI) leading the market. However, most equities fell in the second quarter of 2024, even while those who benefited from AI remained strong. Small-cap benchmarks consequently showed negative returns for the period. During the quarter, the Wasatch Small Cap Growth strategy declined and underperformed the benchmark Russell 2000® Growth Index, which fell -2.92%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Wasatch Small 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 23.60%, and its shares lost 38.66% of their value over the last 52 weeks. On September 13, 2024, Five Below, Inc. (NASDAQ:FIVE) stock closed at $96.56 per share with a market capitalization of $5.311 billion.
Wasatch Small Cap Growth Strategy stated the following regarding Five Below, Inc. (NASDAQ:FIVE) in its Q2 2024 investor letter:
“The greatest detractor from strategy performance during the second quarter was Five Below, Inc. (NASDAQ:FIVE). A specialty value retailer, the company offers a variety of merchandise at discounted prices. Quarterly results at Five Below fell short of expectations as the company continued to grapple with high levels of customer theft at some of its stores. Management also noted that Five Below’s base of lower-income customers were more discerning with their dollars as inflation crimped their ability to spend on nonessential items. We expect these headwinds to subside over the next few quarters. Additionally, we like the long-term positives including Five Below’s talented management team, strong competitive position and headroom for continued growth. We also note that based on revenues and earnings, the stock is about as inexpensive as it’s been since we’ve owned it.”
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. TimesSquare Capital U.S. Mid Cap Growth Strategy sold Five Below, Inc. (NASDAQ:FIVE) during the second quarter. 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.
