Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. Major index returns increased in the quarter due to strong earnings from large-cap technology companies, especially those connected to artificial intelligence. However, the market’s breadth revealed a different picture. The fund returned -5.03% (net) during the quarter underperforming the -4.27% return of the Russell 2500 Index and -4.31% returns of the secondary benchmark the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Contrarian Fund highlighted stocks like National Vision Holdings, Inc. (NASDAQ:EYE), in the second quarter 2024 investor letter. National Vision Holdings, Inc. (NASDAQ:EYE) is a US-based optical retailer. The one-month return of National Vision Holdings, Inc. (NASDAQ:EYE) was-7.15%, and its shares lost 39.47% of their value over the last 52 weeks. On September 11, 2024, National Vision Holdings, Inc. (NASDAQ:EYE) stock closed at $10.26 per share with a market capitalization of $806.8 million.
Meridian Contrarian Fund stated the following regarding National Vision Holdings, Inc. (NASDAQ:EYE) in its Q2 2024 investor letter:
“National Vision Holdings, Inc. (NASDAQ:EYE) is the second-largest optical retailer in the U.S. and a leader in the low-cost space with its America’s Best and Eyeglass World brands. Our interest in the company began after earnings declined due to (1) tough pandemic comps (stimulus checks boosted sales and pulled ahead glasses demand) and (2) eye exam capacity constraints resulting from a challenging optometrist hiring environment. We invested based on our belief that by implementing technology to improve optometrist utilization, the company could return to its historical pattern of steady revenue and earnings growth. National Vision beat earnings during the quarter but missed sales expectations, calling into question its ability to meet expectations for annual results. We reduced our position due to evidence that the company continues to underperform the overall industry, raising suspicion that there could be problems with the business that we did not foresee. We maintain a small position as we believe it is reasonable that their improvement efforts could pay off later this year.”
A close-up of eyeglasses on display at a Vista Optical shop.
National Vision Holdings, Inc. (NASDAQ:EYE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held National Vision Holdings, Inc. (NASDAQ:EYE) at the end of the second quarter which was 27 in the previous quarter. In the second quarter, National Vision Holdings, Inc. (NASDAQ:EYE) reported $452 million in revenues, up 4.6% from Q2 2023. While we acknowledge the potential of National Vision Holdings, Inc. (NASDAQ:EYE) 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 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.