Longleaf Partners, managed by Southeastern Asset Management, released its “Small-Cap Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund delivered -4.24% in the second quarter compared to a 3.22% return for the Russell 3000 Index and -3.28% for the Russell 2000 Index. It was a difficult quarter for small-cap stocks. Since inception, the fund’s goal has been to provide long-term, double-digit absolute returns. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Longleaf Partners Small-Cap Fund highlighted stocks like Anywhere Real Estate Inc. (NYSE:HOUS) in the second quarter 2024 investor letter. Headquartered in Madison, New Jersey, Anywhere Real Estate Inc. (NYSE:HOUS) is a residential real estate services provider. The one-month return of Anywhere Real Estate Inc. (NYSE:HOUS) was 42.07%, and its shares lost 42.96% of their value over the last 52 weeks. On July 30, 2024, Anywhere Real Estate Inc. (NYSE:HOUS) stock closed at $4.66 per share with a market capitalization of $522.2 million.
Longleaf Partners Small-Cap Fund stated the following regarding Anywhere Real Estate Inc. (NYSE:HOUS) in its Q2 2024 investor letter:
“Anywhere Real Estate Inc. (NYSE:HOUS) – Real estate brokerage franchisor Anywhere was the top detractor for the quarter. Anywhere has faced the most challenging news flow in the first half of the year among our holdings. First was the National Association of Realtors (NAR) settlement affecting buy-side commissions that we wrote about last quarter. Despite this already being in the numbers, the entire industry, including Anywhere, was hit hard in the second quarter as existing home sales remained weak. To compound the issue in the short-term, Anywhere was removed from the S&P Small-Cap Index at the end of the quarter. Given the high percentage of index fund ownership, this was particularly damaging to the stock price but, of course, not to the value. Despite these challenges, we remain invested for two main reasons. First, Anywhere can produce FCF over the next twelve months even in today’s tough industry environment, and this FCF could be substantial in a more normalized environment. Second, the company is buying back its debt at discounts, strengthening the balance sheet and adding value beyond simply paying it back at par. We continue to have confidence in the management team to work on what is within their control.”
An aerial view of a large, newly constructed residential community in Arlington, Texas.
Anywhere Real Estate Inc. (NYSE:HOUS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Anywhere Real Estate Inc. (NYSE:HOUS) at the end of the first quarter which was 22 in the previous quarter. Anywhere Real Estate Inc.’s (NYSE:HOUS) first quarter revenue was $1.1 billion, flat compared to the prior year as transaction volume gains were countered by relocation weakness. While we acknowledge the potential of Anywhere Real Estate Inc. (NYSE:HOUS) 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 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.
