TimesSquare Capital Management, an equity investment management company, released its “U.S. Mid Cap Growth Strategy” second-quarter investor letter. A copy of the same can be downloaded here. The equity markets performed well in the second quarter, as long as one held only a small number of the biggest, fastest-growing U.S. stocks. Given the Magnificent Seven’s superior performance, differences in growth and value among large caps were downplayed. There wasn’t much style diversity between mid-caps, small caps, or outside the U.S. In the second quarter, the strategy returned -2.94% (gross) and -3.14% (net) while the Russell Midcap Growth Index returned -3.21%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
TimesSquare Capital U.S. Mid Cap Growth Strategy highlighted stocks like WEX Inc. (NYSE:WEX), in the second quarter 2024 investor letter. WEX Inc. (NYSE:WEX) is a US-based commerce platform operator that offers payment processing and information management solutions. The one-month return of WEX Inc. (NYSE:WEX) was 7.77%, and its shares lost 4.17% of their value over the last 52 weeks. On September 11, 2024, WEX Inc. (NYSE:WEX) stock closed at $192.00 per share with a market capitalization of $7.888 billion.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding WEX Inc. (NYSE:WEX) in its Q2 2024 investor letter:
“In the Financials sector we tend to avoid banks that face credit deterioration or rising deposit costs, preferring either asset managers or specialized insurance companies. Detracting from results was WEX Inc. (NYSE:WEX), which provides payment processing and information services to the U.S. commercial and government vehicle fleet industry. Early in the quarter, WEX reported inline revenues though lower-than-expected earnings. It seemed that some investors were overly optimistic regarding the benefits WEX enjoyed from higher rates and fuel prices. WEX also noted that a recent contract renewal with Bookings.com saw some services taken in-house, which caused market fears that Expedia might follow suit when its contract is renewed. We believe those concerns were overly negative—while Bookings.com owns a bank, no similar travel agencies do—and the revenue impact was less than other investors projected. Hence as WEX’s shares retreated by -25%, we added to our position.”
An executive standing in front of a large monitor that shows payment processing information.
WEX Inc. (NYSE:WEX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held WEX Inc. (NYSE:WEX) at the end of the second quarter which was 32 in the previous quarter. In the second quarter WEX Inc. (NYSE:WEX) delivered $673 million in revenues, representing an 8% year-over-year increase. While we acknowledge the potential of WEX Inc. (NYSE:WEX) 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.
