Wasatch Global Investors, an asset management company, released its “Wasatch Micro Cap Value Strategy” second-quarter 2024 investor letter. A copy of the same can be downloaded here. During the second quarter, the strategy fell but significantly outperformed the benchmark Russell Microcap Index which declined -5.27%. The firm did not observe any major changes in its long-term investment position during the quarter. However, it acknowledges that the majority of equities fell as investors’ concerns about the possibility of a recession, higher-for-longer inflation, and interest rates. A small group of stocks that are thought to be doing well because of the artificial intelligence (AI) boom kept going up at the same time. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Wasatch Micro-Cap Value Strategy highlighted stocks like Bowhead Specialty Holdings Inc. (NYSE:BOW), in the second quarter 2024 investor letter. Bowhead Specialty Holdings Inc. (NYSE:BOW) is a specialty property and casualty insurance products provider. The one-month return of Bowhead Specialty Holdings Inc. (NYSE:BOW) was 15.88%, and its shares gained 19.94% of their value over the last three months. On September 9, 2024, Bowhead Specialty Holdings Inc. (NYSE:BOW) stock closed at $31.16 per share with a market capitalization of $1.018 billion.
Wasatch Micro-Cap Value Strategy stated the following regarding Bowhead Specialty Holdings Inc. (NYSE:BOW) in its Q2 2024 investor letter:
“Among our recent buys, we added Bowhead Specialty Holdings Inc. (NYSE:BOW), which offers niche insurance services to cover professional liability, casualty, construction and health-care risks. The company operates in Arizona, California, Connecticut, Florida, Georgia, Illinois, New York and Texas. Bowhead is considered an excess and surplus (E&S) provider because it covers higher-risk exposures outside the scope of large, traditional insurance companies. While Bowhead covers higher-risk exposures, we don’t view the stock as particularly risky. Bowhead understands its customers and prices its insurance services accordingly. We’ve already seen a big gain in the stock, but we’re keeping our position because we think Bowhead can grow by about 15% per year and maintain an ROE in the vicinity of 15%. Although insurance isn’t normally viewed as a dynamic industry, we know from experience that specialty insurers—especially those purchased as micro-caps—can be great investments.”
An experienced property and casualty insurance agent at a client’s home, explaining the benefits of the company’s homeowners’ insurance policies.
Bowhead Specialty Holdings Inc. (NYSE:BOW) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Bowhead Specialty Holdings Inc. (NYSE:BOW) at the end of the second quarter which was 0 in the previous quarter. While we acknowledge the potential of Bowhead Specialty Holdings Inc. (NYSE:BOW) 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 Bowhead Specialty Holdings Inc. (NYSE:BOW) and shared NCG Micro-Cap Strategy’s 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.