Polen Capital, an investment management company, released its “Polen U.S. SMID Company Growth Strategy” second-quarter 2024 investor letter. A copy of the same can be downloaded here. The portfolio returned -8.42% gross and -8.71% net of fees in the second quarter compared to a -4.22% return for the Russell 2500 Growth Index. In the second quarter, there was a shift from lower-quality, high-priced stocks to a more cautious approach due to concerns about high inflation. This led to a widening performance gap between small and mid-sized and large company stocks, as investors turned to lower-volatility sectors. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen U.S. SMID Company Growth Strategy highlighted stocks like AAON, Inc. (NASDAQ:AAON), in the second quarter 2024 investor letter. AAON, Inc. (NASDAQ:AAON), with a market capitalization of $7.19 billion, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment. One-month return of AAON, Inc. (NASDAQ:AAON) was 1.93%, and its shares gained 23.21% of their value over the last 52 weeks. On July 29, 2024, AAON, Inc. (NASDAQ:AAON) stock closed at $87.46 per share.
Polen U.S. SMID Company Growth Strategy stated the following regarding AAON, Inc. (NASDAQ:AAON) in its Q2 2024 investor letter:
“AAON, Inc. (NASDAQ:AAON) is a leading producer of premium and state-of-the-art heating, ventilation, and air conditioning (“HVAC”) systems for commercial and industrial indoor environments. Since its founding 35 years ago, the company’s strategy has focused on making “semi-custom equipment,” whereby it makes a premium product at a price that is growing increasingly competitive with larger competitors due to the secular trends of decarbonization and electrification. By way of illustration, commercial buildings make up 16% of the total carbon emissions in the U.S., with roughly 40° related to building HVAC systems. In 2021, the company acquired BASX Solutions, an Oregon-based manufacturer of custom, high- performance cooling solutions for the rapidly growing hyperscale data center market. We believe this move should provide a tailwind to organic growth for years to come. We believe AAON will continue to grow share in the multi-billion-dollar commercial HVAC market at high incremental operating margins and returns on capital for the long term.”
A technician surrounded by complex chillers and data center cooling solutions.
AAON, Inc. (NASDAQ:AAON) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held AAON, Inc. (NASDAQ:AAON) at the end of the first quarter which was 18 in the previous quarter. Sales for AAON, Inc. (NASDAQ:AAON) decreased 1.4% in the first quarter to $262.1 million from $266 million in Q1 2023. While we acknowledge the potential of AAON, Inc. (NASDAQ:AAON) 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 AAON, Inc. (NASDAQ:AAON) and shared Conestoga Capital Advisors’ views on the company. 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.
