Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The significant move by the FED to cut the interest rate helped the market to stabilize. In the quarter, the fund appreciated 6.19% (net), outperforming its benchmark, the S&P 500 Index, which returned 5.89%, and its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s 5.54% return. It anticipates that capital preservation in bear markets will eventually play a significant role in the long-term compounding of returns. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Meridian Hedged Equity Fund highlighted stocks like Sally Beauty Holdings, Inc. (NYSE:SBH), in the third quarter 2024 investor letter. Sally Beauty Holdings, Inc. (NYSE:SBH) is a specialty retailer and distributor of professional beauty supplies. The one-month return of Sally Beauty Holdings, Inc. (NYSE:SBH) was 8.77%, and its shares gained 46.23% of their value over the last 52 weeks. On November 27, 2024, Sally Beauty Holdings, Inc. (NYSE:SBH) stock closed at $14.14 per share with a market capitalization of $1.4 billion.
Meridian Hedged Equity Fund stated the following regarding Sally Beauty Holdings, Inc. (NYSE:SBH) in its Q3 2024 investor letter:
“Sally Beauty Holdings, Inc. (NYSE:SBH) is a leading international specialty retailer and distributor of professional beauty supplies, operating in two segments: retail consumers and licensed salon professionals
We own the company due to its strong free cash flow generation, attractive valuation, and the potential for long-term growth in the professional beauty products market. While the company faces headwinds from a value-conscious consumer base, its focus on DIY care provides resilience. In the third quarter, the company exceeded expectations, driven by increased sales and effective performance marketing in its retail segment, which boosted new customer acquisition and reactivated lapsed customers. We continue to hold the company in the Fund.”
A customer in a franchised store trying out hair color products.
Sally Beauty Holdings, Inc. (NYSE:SBH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Sally Beauty Holdings, Inc. (NYSE:SBH) at the end of the third quarter which was 24 in the previous quarter. Sally Beauty Holdings, Inc.’s (NYSE:SBH) consolidated net sales in the fourth fiscal quarter were $935 million, an increase of 1.5% from previous year’s quarter while consolidated comparable sales grew 2%. While we acknowledge the potential of Sally Beauty Holdings, Inc. (NYSE:SBH) 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 Sally Beauty Holdings, Inc. (NYSE:SBH) and shared Meridian Hedged Equity Fund’s views on the company in Q1 2024. In addition, please check out our hedge fund investor letters Q3 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.