Polen Capital, an investment management company, released its “Polen US SMID Company Growth Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. SMID cap stocks initially rose by more than 10% following November’s U.S. Presidential election, in another volatile quarter. However, they relinquished nearly all of those gains in December, as the U.S. Federal Reserve signaled that interest rate cuts would occur more slowly than anticipated, with reductions expected to start in 2025. Against this backdrop, the fund returned 3.0% gross, and 2.7% net of fees compared to the Russell 2500 Growth Index return of 2.4%. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Polen US SMID Company Growth Strategy highlighted stocks like TopBuild Corp. (NYSE:BLD) in the Q4 2024 investor letter. TopBuild Corp. (NYSE:BLD) is an insulation and other building material products distributor. The one-month return of TopBuild Corp. (NYSE:BLD) was 7.18%, and its shares lost 7.30% of their value over the last 52 weeks. On January 31, 2024, TopBuild Corp. (NYSE:BLD) stock closed at $342.68 per share with a market capitalization of $10.11 billion.
Polen US SMID Company Growth Strategy stated the following regarding TopBuild Corp. (NYSE:BLD) in its Q4 2024 investor letter:
“TopBuild Corp. (NYSE:BLD), a U.S. market leader in insulation distribution and installation services in the residential construction, commercial, and mechanical insulation markets, was weak over the quarter after posting soft quarterly results. We believe the company offers exposure to secular tailwinds from years of underbuilding in new homes and a high-return business model that should prove more resilient than traditional homebuilders.”
A specialized team of experts installing building materials in a pre-construction plan.
TopBuild Corp. (NYSE:BLD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held TopBuild Corp. (NYSE:BLD) at the end of the third quarter which was 42 in the previous quarter. TopBuild Corp.’s (NYSE:BLD) third quarter sales increased 3.6% to $1.37 billion. While we acknowledge the potential of TopBuild Corp. (NYSE:BLD) 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 TopBuild Corp. (NYSE:BLD) and shared Polen Global SMID Company Growth’s views on the company in the previous quarter. 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.