Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. Small-cap stocks experienced the most gains in 2023 and the first quarter of 2024, with names linked to the advancement of artificial intelligence (AI) leading the market. However, most equities fell in the second quarter of 2024, even while those who benefited from AI remained strong. Small-cap benchmarks consequently showed negative returns for the period. During the quarter, the Wasatch Small Cap Growth strategy declined and underperformed the benchmark Russell 2000® Growth Index, which fell -2.92%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Wasatch Small Cap Growth Strategy highlighted stocks like Sprout Social, Inc. (NASDAQ:SPT), in the second quarter 2024 investor letter. Sprout Social, Inc. (NASDAQ:SPT) designs, develops, and operates a web-based social media management platform. The one-month return of Sprout Social, Inc. (NASDAQ:SPT) was -18.60%, and its shares lost 44.60% of their value over the last 52 weeks. On September 13, 2024, Sprout Social, Inc. (NASDAQ:SPT) stock closed at $27.79 per share with a market capitalization of $1.586 billion.
Wasatch Small Cap Growth Strategy stated the following regarding Sprout Social, Inc. (NASDAQ:SPT) in its Q2 2024 investor letter:
“Another significant detractor was Sprout Social, Inc. (NASDAQ:SPT). An industry-wide slowdown in sales of new software impacted the company. Sprout provides customers with cloud-based tools for social-media management, communication, contact management, lead generation, reporting and analysis. The company delivered slower-than-expected revenue growth in its most recent quarter and cut its full-year guidance. Also appearing to weigh on the company’s stock price was Sprout’s announcement of a CEO change, as well as its decision to stop disclosing certain metrics about the performance of its business. After visiting the company, we believe our original reasons for owning it remain intact. Our long-term outlook for Sprout continues to be positive, and we expect our patience to be rewarded.”
A marketing manager in a boardroom making decisions about the company’s social media management platform.
Sprout Social, Inc. (NASDAQ:SPT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Sprout Social, Inc. (NASDAQ:SPT) at the end of the second quarter which was 22 in the previous quarter. The Sprout Social, Inc.’s (NASDAQ:SPT) second quarter revenue was $99.4 million, up 25% year-over-year. While we acknowledge the potential of Sprout Social, Inc. (NASDAQ:SPT) 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 Sprout Social, Inc. (NASDAQ:SPT) and shared Alger Weatherbie Specialized Growth Fund’s views on the company. Sprout Social, Inc. (NASDAQ:SPT) detracted from the performance of Columbia Acorn Fund in Q2 2024. 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.