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 Warby Parker Inc. (NYSE:WRBY), in the fourth quarter 2024 investor letter. Warby Parker Inc. (NYSE:WRBY) offers wide range of eyewear products includes eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. The one-month return of Warby Parker Inc. (NYSE:WRBY) was 7.41%, and its shares gained 107.14% of their value over the last 52 weeks. On January 30, 2024, Warby Parker Inc. (NYSE:WRBY) stock closed at $28.42 per share with a market capitalization of $3.42 billion.
Polen US SMID Company Growth Strategy stated the following regarding Warby Parker Inc. (NYSE:WRBY) in its Q4 2024 investor letter:
“Warby Parker Inc. (NYSE:WRBY), a U.S.-based omnichannel retailer of eyewear products with a unique vertically integrated direct-to-consumer business model, reported encouraging quarterly results. The company experienced strong growth in its glasses business and continued momentum in contact lenses and optometry. Investment in optometrists is yielding results, driving improved gross margins through enhanced utilization. Warby Parker appears to be emerging from a challenging period where it was adversely impacted by post-pandemic changes in consumer behavior. Company management’s steps to reduce costs appear to be paying off. More recently, we’ve seen fundamentals improve, with marketing spend recovering now that margins have settled. We believe the company has the potential to enhance its profitability as demand continues to recover and it completes and capitalizes on heavy investments in areas such as optometry services, which previously weighed on margins.”
A woman wearing a stylish pair of eyeglasses walking through a shopping center.
Warby Parker Inc. (NYSE:WRBY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Warby Parker Inc. (NYSE:WRBY) at the end of the third quarter which was 32 in the previous quarter. Warby Parker Inc. (NYSE:WRBY) generated net revenue of $192.4 million in the third quarter, representing 13.3% growth year-over-year. While we acknowledge the potential of Warby Parker Inc. (NYSE:WRBY) 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 Warby Parker Inc. (NYSE:WRBY) and shared billionaire Daniel Sundheim’s top stock picks heading into 2025. 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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