Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund returned 3.36% compared to a 2.90% return for the Russell 2000 Value Index. Small value and small quality have outperformed over longer periods, although small caps have significantly underperformed over the past ten years. The firm focuses on the high-quality compounders in its portfolio. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like PVH Corp. (NYSE:PVH) in the first quarter 2024 investor letter. PVH Corp. (NYSE:PVH) is an apparel company. PVH Corp.’s (NYSE:PVH) one-month return was 4.62%, and its shares gained 39.51% of their value over the last 52 weeks. On June 4, 2024, PVH Corp. (NYSE:PVH) stock closed at $119.25 per share with a market capitalization of $6.751 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding PVH Corp. (NYSE:PVH) in its first quarter 2024 investor letter:
“PVH Corp. (NYSE:PVH) is an apparel company that owns the Tommy Hilfiger and Calvin Klein brands globally. Most of PVH’s earnings come from Europe, where the Tommy and Calvin brands are considered “almost luxury” and PVH has generally recorded high single-digit organic growth with demonstrated pricing power during the preceding decade. CEO Stefan Larsson has done an excellent job revitalizing the company and improving margins at PVH’s moribund U.S. operations. Over the past year, PVH and our other apparel companies have performed well as the worst fears for consumer spending didn’t play out. PVH has become a top five holding for us and our apparel holdings (PVH, GIII, LEVI and DECK) now make up almost 10% of the portfolio. On April 2, post quarter end, PVH announced fiscal 23Q4 results where they missed on earnings guidance for the coming year. The stock is down ~20% from its high but now trades at less than ten times forward earnings. We have held our position.”
A customer trying on a sports jacket in-store, showcasing the company’s sportswear range.
PVH Corp. (NYSE:PVH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held PVH Corp. (NYSE:PVH) at the end of the first quarter which was 35 in the previous quarter. PVH Corp. (NYSE:PVH) exceeded guidance for both the top and bottom lines during the quarter and full year driven by the exceptional performance of its two iconic brands: Tommy Hilfiger and Calvin Klein and the effective implementation of the PVH+ Plan. While we acknowledge the potential of PVH Corp. (NYSE:PVH) 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 PVH Corp. (NYSE:PVH) and shared the list of luxury clothing stocks to invest in. 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.
