TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the fund returned -1.59% (gross) and -1.83% (net), compared to a -2.92% return for the Russell 2000 Growth Index. The equity markets performed well in the second quarter, as long as one held only a handful of the biggest, fastest-growing U.S. stocks. Despite profitability turning positive this quarter following negative or neutral results in previous quarters, momentum remained the most important component in the worldwide market. In addition, please check the fund’s top five holdings to know its best picks in 2024.
TimesSquare Capital Management U.S. Small Cap Growth Strategy highlighted stocks like Workiva Inc. (NYSE:WK), in the second quarter 2024 investor letter. Workiva Inc. (NYSE:WK) offers cloud-based reporting solutions. The one-month return of Workiva Inc. (NYSE:WK) was -2.69%, and its shares lost 28.66% of their value over the last 52 weeks. On September 17, 2024, Workiva Inc. (NYSE:WK) stock closed at $76.88 per share with a market capitalization of $4.244 billion.
TimesSquare Capital Management U.S. Small Cap Growth Strategy stated the following regarding Workiva Inc. (NYSE:WK) in its Q2 2024 investor letter:
“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that closely tie to increasing shares of corporate IT budgets. Workiva Inc. (NYSE:WK) supplies cloud-based reporting solutions. First quarter revenues outstripped sell-side projections due to higher subscription and support levels. Billings, however, fell short in a seasonally slower quarter. Their productivity focus and thoughtful hiring are driving margin improvement. Generative AI capabilities have been well received by customers. Management is optimistic about better bookings performance for the remainder of the year. Its shares dropped by -14% and we added to the position on weakness.”
A software engineer debugging a compliance code on a laptop in a modern office setting.
Workiva Inc. (NYSE:WK) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Workiva Inc. (NYSE:WK) at the end of the second quarter which was 22 in the previous quarter. Workiva Inc. (NYSE:WK) generated $177.5 million in revenues, up 15% from Q2 2023. While we acknowledge the potential of Workiva Inc. (NYSE:WK) 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 Workiva Inc. (NYSE:WK) and shared the list of best cloud stocks to buy according to short sellers. Artisan Small Cap Fund trimmed Workiva Inc. (NYSE:WK) during Q2 2024 due to concerns over a potential shift in corporate spending from enterprise software to AI. 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.