Brown Capital Management, an investment management company, released its “The Brown Capital Management Mid Company Strategy” Q3 2022 investor letter. A copy of the same can be downloaded here. The Mid Company Composite returned -4.52% in the quarter compared to a -0.65% return for the Russell Midcap Growth Index. The firm invests in mission-critical companies and owns companies with a competitive advantage and skilled managers. In addition, check the fund’s top five holdings to know its best picks in 2022.
Brown Capital Management highlighted stocks like Five9, Inc. (NASDAQ:FIVN) in its Q3 2022 investor letter. Headquartered in San Ramon, California, Five9, Inc. (NASDAQ:FIVN) is a cloud software provider. On December 20, 2022, Five9, Inc. (NASDAQ:FIVN) stock closed at $68.30 per share. One-month return of Five9, Inc. (NASDAQ:FIVN) was 12.65%, and its shares lost 51.87% of their value over the last 52 weeks. Five9, Inc. (NASDAQ:FIVN) has a market capitalization of $4.816 billion
Brown Capital Management made the following comment about Five9, Inc. (NASDAQ:FIVN) in its Q3 2022 investor letter:
“Looking at the Mid Company strategy, Five9, Inc. (NASDAQ:FIVN) is one example of an EGC that we are adding to as the market has soured on mid-size growth companies. Five9 is a leader in cloud-based contact-center software that connect callers to customer-service agents. With the growth of e-commerce, consumers are making fewer in-person visits to stores but contacting companies more frequently. This is driving the need for world-class contact-center software solutions. Since the vast majority of contactcenter costs are driven by labor, Five9’s leading artificial intelligence (AI) and automation technology help make call centers more efficient with their workforces. Less than 15% of the call-center market has shifted to cloud solutions and we believe that Five9’s leading solution will gain market share. So far, corporate buyers appear to agree with us, as the company has raised its revenue growth and profitability forecast several times this year. The historic industry leader in call-center systems, Avaya, lacks a competitive offering to Five9 and sparked bankruptcy rumors when Bloomberg News reported in August that it was hiring financial restructuring advisors. Despite a compelling long-term growth opportunity and the potential bankruptcy of a major competitor, Five9 shares declined 17.73% in the third quarter, and we have been a buyer on the share-price weakness. Near term, the market is likely focused on Five9’s exposure to consumer spending amid falling consumer confidence, concerns about a recession, and the crippling effects of inflation. By those measures, our long-term thesis may currently look foolhardy, but we believe our patience and willingness to invest in out-of-favor growth companies like Five9 will help us deliver exceptional long-term results for our investors.”
Five9, Inc. (NASDAQ:FIVN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held Five9, Inc. (NASDAQ:FIVN) at the end of the third quarter, which was 51 in the previous quarter.
We discussed Five9, Inc. (NASDAQ:FIVN) in another article and shared Wasatch Global Investors’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 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.
