Should You Invest in Leslie’s (LESL)?

Ariel Investments, an investment management company, released its “Ariel Fund” first-quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the Ariel fund gained +6.66% outperforming +1.40% and +3.39% gains of both the Russell 2500 Value Index and the Russell 2500 Index. The average annual returns of Ariel Fund (Investor class) for 1-, 5-, and 10-year periods were -8.74%, +5.80%, and +9.06% respectively, for the period ended March 31, 2023. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Ariel Fund highlighted stocks like Leslie’s, Inc. (NASDAQ:LESL) in the first quarter 2023 investor letter. Headquartered in Phoenix, Arizona, Leslie’s, Inc. (NASDAQ:LESL) provides direct-to-consumer pool and spa care services. On June 1, 2023, Leslie’s, Inc. (NASDAQ:LESL) stock closed at $9.79 per share. One-month return of Leslie’s, Inc. (NASDAQ:LESL) was -10.35%, and its shares lost 49.97% of their value over the last 52 weeks. Leslie’s, Inc. (NASDAQ:LESL) has a market capitalization of $1.8 billion.

Ariel Fund made the following comment about Leslie’s, Inc. (NASDAQ:LESL) in its Q1 2023 investor letter:

“Also during the quarter, we initiated a position in Leslie’s, Inc. (NASDAQ:LESL), the leading direct-to-consumer pool and spa care services company in the U.S. The company differentiates itself through its loyal client base, vertically integrated supply chain, scale advantage and seamless customer experience. Shares have recently sold off on near-term operational issues at a distribution facility, as well as concerns around the sustainability of the company’s growth profile in a normalized, post-pandemic environment. Although we believe new pool installments will likely experience a slowdown, the install base has materially increased and ~80% of LESL’s business is tied to recurring maintenance. We found this entry point as an attractive opportunity to own a differentiated retailer, well positioned to benefit from secular tailwinds in an industry, permanently elevated by the pandemic.”

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Leslie’s, Inc. (NASDAQ:LESL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Leslie’s, Inc. (NASDAQ:LESL) at the end of first quarter 2023 which was 27 in the previous quarter.

We discussed Leslie’s, Inc. (NASDAQ:LESL) in another article and shared the list of best small-cap growth stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 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.