The London Company, an investment management company, released “The London Company Small Cap Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund fell 5.8% (5.9%, net) compared to a 3.3% decrease in the Russell 2000 Index. The positive impact of sector allocation was mitigated by stock selection in the second quarter. For more information on the fund’s top picks in 2024, please check its top five holdings.
The London Company Small Cap Strategy highlighted stocks like Tempur Sealy International, Inc. (NYSE:TPX) in the second quarter 2024 investor letter. Tempur Sealy International, Inc. (NYSE:TPX) designs, manufactures, and distributes bedding products. The one-month return of Tempur Sealy International, Inc. (NYSE:TPX) was 0.34%, and its shares gained 10.21% of their value over the last 52 weeks. On August 9, 2024, Tempur Sealy International, Inc. (NYSE:TPX) stock closed at $49.87 per share with a market capitalization of $8.66 billion.
The London Company Small Cap Strategy stated the following regarding Tempur Sealy International, Inc. (NYSE:TPX) in its Q2 2024 investor letter:
“Tempur Sealy International, Inc. (NYSE:TPX) – TPX underperformed in 2Q as a weak bedding market weighed on recent results. Despite the challenging backdrop, TPX’s strong pricing power and significant share gains have helped dampen the negative volume impact. Recent investments in distribution, advertising, and product innovation lay the groundwork for future growth, while visibility into margin recovery is improving on the back of lower input costs and operational efficiencies. The planned acquisition of Mattress Firm has the potential to be materially accretive and strengthen TPX’s overall competitive position. However, the market appears to be pricing in skepticism that the deal will ultimately receive regulatory approval, Robust free cash flow generation, strong brand equity, and solid management execution support our investment thesis.”
A satisfied customer sleeping on a comfortable bed, bedding products laid out on the bed.
Tempur Sealy International, Inc. (NYSE:TPX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Tempur Sealy International, Inc. (NYSE:TPX) at the end of the first quarter which was 49 in the previous quarter. In the second quarter, Tempur Sealy International, Inc. (NYSE:TPX) reported consolidated net sales of approximately $1.2 billion and adjusted earnings per share of $0.63. While we acknowledge the potential of Tempur Sealy International, Inc. (NYSE:TPX) 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 Tempur Sealy International, Inc. (NYSE:TPX) and shared The London Company Mid Cap Strategy’s views on the company. 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.
