Fred Alger Management, an investment management company, released its “Alger Small Cap Growth Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities rose in Q1 in anticipation of a soft landing. Corporate earnings added another boost to the soft-landing narrative. Class A shares of the fund outperformed the Russell 2000 Growth Index during the quarter. The consumer discretionary and consumer staples sectors contributed to the fund’s relative performance in the quarter, while information technology and industrials detracted from performance. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Alger Small Cap Growth Fund highlighted stocks like Shake Shack Inc. (NYSE:SHAK) in the first quarter 2024 investor letter. Shake Shack Inc. (NYSE:SHAK) owns, operates, and licenses Shake Shack restaurants. One-month return of Shake Shack Inc. (NYSE:SHAK) was -9.57%, and its shares gained 35.83% of their value over the last 52 weeks. On June 6, 2024, Shake Shack Inc. (NYSE:SHAK) stock closed at $93.40 per share with a market capitalization of $3.964 billion.
Alger Small Cap Growth Fund stated the following regarding Shake Shack Inc. (NYSE:SHAK) in its first quarter 2024 investor letter:
“Shake Shack Inc. (NYSE:SHAK) is an elevated take on classic American cuisine. The company uses high-quality ingredients to craft Angus beef burgers, crinkle-cut fries, crispy chicken, and hot dogs. The company serves a full complement of beverages including house- made lemonade, hand-spun milkshakes, beer, wine, and soft drinks. During the quarter, shares contributed to performance after the company reported strong fiscal fourth quarter results, where earnings beat analyst estimates due to increasing restaurant level operating margins and strong same store sales above consensus, driven by better price mix and increased traffic. Moreover, management gave initial 2024 guidance with revenues in-line with consensus but higher-than-expected earnings, underscoring the company’s recent focus on streamlining operations by leveraging technology investment. Separately, following their fiscal fourth quarter earnings report, Shake Shack announced Rob Lynch as the incoming CEO. effective May 2024, succeeding Randy Garutti upon his retirement. Lynch, the former CEO of Papa John’s, is credited with revitalizing the brand post-2018 and has held senior marketing positions at several other top restaurant chains. With management executing well on its expansion plan to add 80 new restaurants in 2024, many of which with newly implemented drive-through windows, we believe the company remains well positioned for long-term growth potential.”
A cook in a busy kitchen preparing a delicious cooking of burgers and fries.
Shake Shack Inc. (NYSE:SHAK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Shake Shack Inc. (NYSE:SHAK) at the end of the first quarter which was 28 in the previous quarter. Shake Shack Inc.’s (NYSE:SHAK) first-quarter adjusted EBITDA reached a record level of $35.9 million, and its total sales increased by 14.7% to $290.5 million compared to the first quarter of last year. While we acknowledge the potential of Shake Shack Inc. (NYSE:SHAK) 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.
We previously discussed Shake Shack Inc. (NYSE:SHAK) in another article, where we shared Choice Equities Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
