Baron Funds, an investment management company, released its “Baron Small Cap Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 9.68% (Institutional Shares) in the quarter outperforming the Russell 2000 Growth Index’s 8.41% return and the broader Russell 3000 Index’s 6.23% return. For the first nine months of 2024, the Fund is up 14.74% compared to 13.22% and 20.63% returns for the indexes. In contrast to the narrow market leadership of previous periods, the market rally during the quarter saw strong performance across a broad range of sectors and market capitalization. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Small Cap Fund highlighted stocks like European Wax Center, Inc. (NASDAQ:EWCZ), in the third quarter 2024 investor letter. European Wax Center, Inc. (NASDAQ:EWCZ) is a US-based franchisor and operator of out-of-home waxing services provider. The one-month return of European Wax Center, Inc. (NASDAQ:EWCZ) was -15.78%, and its shares lost 59.30% of their value over the last 52 weeks. On November 20, 2024, European Wax Center, Inc. (NASDAQ:EWCZ) stock closed at $5.71 per share with a market capitalization of $325.145 million.
Baron Small Cap Fund stated the following regarding European Wax Center, Inc. (NASDAQ:EWCZ) in its Q3 2024 investor letter:
“We exited our small position in European Wax Center, Inc. (NASDAQ:EWCZ) following continued deterioration in unit economics and belief that management’s efforts to increase customer counts might not be effective. Subsequent to our sale, European Wax Center reduced their expectations for unit growth and also announced the exit of both the CEO and CMO.”
A close-up of a brow being waxed in one of the company’s franchises.
European Wax Center, Inc. (NASDAQ:EWCZ) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held European Wax Center, Inc. (NASDAQ:EWCZ) at the end of the third quarter which was 19 in the previous quarter. While we acknowledge the potential of European Wax Center, Inc. (NASDAQ:EWCZ) 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 European Wax Center, Inc. (NASDAQ:EWCZ) and shared TimesSquare Capital Management U.S. Small Cap Growth Strategy’s views on the company. Baron Discovery Fund added European Wax Center, Inc. (NASDAQ:EWCZ) to its portfolio during Q3 2023. In addition, please check out our hedge fund investor letters Q3 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.