Madison Funds, advised by Madison Asset Management, LLC, released its “Madison Small Cap Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. During the quarter, the fund declined 18.5% compared to a decline of 17.2% for the Russell 2000 benchmark. The fund’s underperformance was driven by stock selection. In addition, you can check the top 5 holdings of the fund to learn about its best picks in 2022.
Madison Funds discussed stocks like The Hain Celestial Group, Inc. (NASDAQ:HAIN) in the second quarter investor letter. Headquartered in Lake Success, New York, The Hain Celestial Group, Inc. (NASDAQ:HAIN) engages in the business of organic and natural products. On September 21, 2022, The Hain Celestial Group, Inc. (NASDAQ:HAIN) stock closed at $17.30 per share. One-month return of The Hain Celestial Group, Inc. (NASDAQ:HAIN) was -16.99% and its shares lost 55.99% of their value over the last 52 weeks. The Hain Celestial Group, Inc. (NASDAQ:HAIN) has a market capitalization of $1.545 billion.
Here is what Madison Funds specifically said about The Hain Celestial Group, Inc. (NASDAQ:HAIN) in its Q2 2022 investor letter:
“Ordinarily, when recessionary fears intensify, defensive stocks like food and other staples outperform. However, our second-worst performing sector was arguably, our most defensive, consumer staples. As we mentioned earlier in our commentary, one of the biggest detractors from our performance was The Hain Celestial Group, Inc. (NASDAQ:HAIN). So, what happened? Hain was one of our best performing stocks for the last two years. In fact, in Q4 of 2021 the stock reached a 5-year high of approximately $45. We have consistently believed, and continue to believe, that the private market value (PMV) for HAIN is approximately $70. As of this writing the stock is currently trading close to $24. For the second quarter, the stock declined just over 31%. So why did HAIN not behave defensively? The only thing ‘different this time’ is inflation. Inflation has pressured HAIN’s transportation costs as well as input costs like oil and ingredients required to manufacture foodstuffs. Although the company has largely passed on most of these cost increases, the market fears that if inflation persists, HAIN’s ability to continue to pass these prices will not only wane but may also hurt demand as consumers trade down to lower-priced alternatives. As with RVLV however, we believe these fears are overdone and the market is underestimating the resilience of HAIN’s higher income target demographic. Furthermore, as of this writing, several of the company’s input baskets have meaningfully retreated. Although the near term may still be choppy, commodity cost relief will only strengthen the long-term profitability of HAIN if the price increases prove to have even modest stickiness.”
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The Hain Celestial Group, Inc. (NASDAQ:HAIN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held The Hain Celestial Group, Inc. (NASDAQ:HAIN) at the end of the second quarter which was 29 in the previous quarter.
We discussed The Hain Celestial Group, Inc. (NASDAQ:HAIN) in another article and shared Carillon Tower Advisers’ views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
