Polen Capital, an investment management company, released its “Polen U.S. SMID Company Growth Strategy” second-quarter 2024 investor letter. A copy of the same can be downloaded here. The portfolio returned -8.42% gross and -8.71% net of fees in the second quarter compared to a -4.22% return for the Russell 2500 Growth Index. In the second quarter, there was a shift from lower-quality, high-priced stocks to a more cautious approach due to concerns about high inflation. This led to a widening performance gap between small and mid-sized and large company stocks, as investors turned to lower-volatility sectors. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen U.S. SMID Company Growth Strategy highlighted stocks like Progyny, Inc. (NASDAQ:PGNY), in the second quarter 2024 investor letter. Progyny, Inc. (NASDAQ:PGNY) is a benefits management company. The one-month return of Progyny, Inc. (NASDAQ:PGNY) was 2.44%, and its shares lost 29.92% of their value over the last 52 weeks. On July 29, 2024, Progyny, Inc. (NASDAQ:PGNY) stock closed at $29.02 per share with a market capitalization of $2.763 billion.
Polen U.S. SMID Company Growth Strategy stated the following regarding Progyny, Inc. (NASDAQ:PGNY) in its Q2 2024 investor letter:
“Progyny, Inc. (NASDAQ:PGNY) is the leading managed care provider specializing in fertility. The company provides a clear and differentiated value proposition, leading many employers to carve out fertility as a separate medical benefit. The company reported weaker 1024 results in May due to lower-than-expected benefit utilization. This was largely due to patients reassessing treatment after the Alabama Supreme Court ruling in February declaring embryos created through in vitro fertilization (“IVF”) should be considered children. While Alabama accounts for little of Progyny’s revenue, the headlines-particularly in conservative Christian groups- caused some patients with authorized procedures to delay the start of those cycles. What followed was a widespread cry to carve out legal exceptions for IVF, and Alabama passed legislation protecting IVF. Based on trends management observes, the incident appears to be a temporary blip. However, persistent news headlines and uncertainty appear to weigh on the stock (along with the disappointing guidance). We believe this is a near- term headwind, and our view of Progyny’s long-term opportunity and competitive position is unchanged. We believe fertility benefits still have an extremely long runway for potential growth, particularly as Progyny shows success penetrating new sectors and industries beyond the fertility benefits early adopters. While we believe news and political headlines may continue to weigh on the stock near-term, we take a long-term view and believe the stock is attractively valued. We added to our position in March, before first quarter results were announced.”
A close up of a hand, fingers wrapped around a fertility specialist syringe.
Progyny, Inc. (NASDAQ:PGNY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Progyny, Inc. (NASDAQ:PGNY) at the end of the first quarter which was 28 in the previous quarter. Progyny, Inc.’s (NASDAQ:PGNY) revenue for the first quarter was $278.1 million, up around 8% from the previous year. This gain was mostly attributable to an increase in the number of clients and covered lives. While we acknowledge the potential of Progyny, Inc. (NASDAQ:PGNY) 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 Progyny, Inc. (NASDAQ:PGNY) and shared Jim Cramer’s favorite healthcare stock picks in 2024. Polen Global SMID Company Growth Strategy established a position in Progyny, Inc. (NASDAQ:PGNY) in the third quarter of 2023. 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.