Polen Capital, an investment management company, released its “Polen U.S. Small Company Growth Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The third quarter had a strong finish for U.S. small-cap equities, driven by interest rate reductions and fading recessionary concerns. In the third quarter, the fund delivered 7.65% gross, and 7.35% net of fees compared to an 8.41% return for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Polen U.S. Small Company Growth Strategy highlighted stocks like Rambus Inc. (NASDAQ:RMBS), in the third quarter 2024 investor letter. Incorporated in 1990, Rambus Inc. (NASDAQ:RMBS) is a semiconductor products provider. The one-month return of Rambus Inc. (NASDAQ:RMBS) was 23.25%, and its shares lost 26.30% of their value over the last 52 weeks. On November 15, 2024, Rambus Inc. (NASDAQ:RMBS) stock closed at $51.31 per share with a market capitalization of $5.468 billion.
Polen U.S. Small Company Growth Strategy stated the following regarding Rambus Inc. (NASDAQ:RMBS) in its Q3 2024 investor letter:
“During the quarter, we instituted six new additions and five complete sales. We also added to and trimmed several existing positions. Additions included NV5 Global, Rambus Inc. (NASDAQ:RMBS), Paylocity Holdings, Insight Enterprises, elf Beauty, and Dutch Bros.
Rambus is a provider of memory interface chips and silicon intellectual property (“IP”) that serves large memory Original Equipment Manufacturers (“OEMs”) and hyperscalers. The company generates its revenue through a combination of licensing fees and product sales. Rambus’ IP and products are crucial in helping their customers advance memory architecture by improving speed and data integrity within server and datacenter environments. Rambus operates a fabless business model, leading to robust returns on capital and free cash flow generation. This model also enables continuous reinvestment into R&D as well as returning cash to shareholders. We estimate Rambus can compound earnings and free cash flow per share at 15%-17% through a cycle.”
A close-up of a cutting-edge semiconductor product being assembled by a technician.
Rambus Inc. (NASDAQ:RMBS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Rambus Inc. (NASDAQ:RMBS) at the end of the second quarter which was 25 in the previous quarter. Rambus Inc.’s (NASDAQ:RMBS) third quarter revenue of $145.5 million was in line with expectations. While we acknowledge the potential of Rambus Inc. (NASDAQ:RMBS) 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 Rambus Inc. (NASDAQ:RMBS) and shared Columbia Acorn Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
