Top 5 Stock Picks of Steve Leonard’s Pacifica Capital Investments

2. Five Below, Inc. (NASDAQ:FIVE)

Pacifica Capital Investments’ Stake Value: $62,525,000

Percentage of Pacifica Capital Investments’ 13F Portfolio: 20.20%

Number of Hedge Fund Holders: 40

Five Below, Inc. (NASDAQ:FIVE) was upgraded to Overweight from Neutral by Morgan Stanley analyst Simeon Gutman on October 7, who kept an unchanged price target of $230 on the stock. He stated that the stock is trading at a discount due to freight and inventory concerns, which are blown out of proportion. 

Five Below, Inc. (NASDAQ:FIVE), an American discount store selling products under $5, is one of Steve Leonard’s top stock picks as of Q3. Pacifica Capital Investments holds a $62.5 million stake in the company, which accounts for 20.2% of the firm’s total 13F securities.

At the end of the third quarter of 2021, Balyasny Asset Management was one of the largest stakeholders of Five Below, Inc. (NASDAQ:FIVE), with a $90.6 million position in the company. Overall, 40 hedge funds were bullish on Five Below, Inc. (NASDAQ:FIVE), down from 42 in the preceding quarter. 

Here is what Harding Loevner has to say about Five Below, Inc. (NASDAQ:FIVE) in their Q4 2020 investor letter:

“Throughout the year, we tried methodically to rebalance the portfolio between “stay at home” and “return to normal” whenever the market appeared too pessimistic or optimistic about the sustainability of recent, pandemic-driven trends. As the year went on, we found ourselves tilting more towards “return to normal.” We established a new position in US retailer Five Below, a discount chain built around a rather simple concept: fill nondescript big-box locations with as many as possible items priced under US$5 that can tickle the imagination of an American teen or tween. As “pre-2020” as that may sound, we were impressed by the company’s quick resumption of strong same-store sales growth after the lockdowns early in the year. Clearly, Five Below offers a value and entertainment proposition that e-commerce is not able to satisfy and which we can see ourselves “sitting” on potentially for years to come.”