Columbia Acorn Fund, distributed by Columbia Management Investment Distributors, released its second quarter 2024 investor letter. A copy of the fund can be downloaded here. In the quarter, the fund returned -6.01%, while the benchmark, the Russell 2500 Growth Index, returned -4.22%. The second quarter brought a significant change in market sentiment. The underperformance of the holdings in the quarter was primarily driven by a disappointing earnings season. In addition, you can check the fund’s top 5 holdings for its best picks for 2024.
Columbia Acorn Fund 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 22.83%, and its shares lost 48.39% of their value over the last 52 weeks. On September 10, 2024, Five Below, Inc. (NASDAQ:FIVE) stock closed at $83.97 per share with a market capitalization of $4.619 billion.
Columbia Acorn Fund stated the following regarding Five Below, Inc. (NASDAQ:FIVE) in its Q2 2024 investor letter:
“Five Below, Inc. (NASDAQ:FIVE) is a differentiated value retailer offering an enjoyable shopping experience. The stock underperformed in the quarter and year to date due to a variety of factors, including weaker sales to lower-income consumers, additional costs to combat inventory theft and fears around theoretical future tariffs and online competition, which we believe are overblown. Five Below is a classic classification misfit, with the current stock price overestimating short-term headwinds and underestimating the durable value creation in its business model, including the opportunity to more than double its base of stores. Five Below has competitive advantages, including scale benefits which strengthen each year with suppliers and in marketing. We added significantly to the position, viewing the stock as a “coiled spring” waiting for a more stable macroeconomic environment.”
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 9.4% year-over-year to $830 million in the second quarter of 2024 with comparable sales down 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 Carillon Eagle Mid Cap Growth Fund’s views on the company. 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.
