Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. Major index returns increased throughout the quarter due to strong earnings from large-cap technology companies, especially those connected to artificial intelligence. In the second quarter, the fund returned -1.86% (net) outperforming the benchmark, the Russell 2500 Growth Index’s -4.22% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Growth Fund highlighted stocks like Chewy, Inc. (NYSE:CHWY), in the second quarter 2024 investor letter. Chewy, Inc. (NYSE:CHWY) is an online retailer that provides on pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services. The one-month return of Chewy, Inc. (NYSE:CHWY) was 19.80%, and its shares gained 70.16% of their value over the last 52 weeks. On September 16, 2024, Chewy, Inc. (NYSE:CHWY) stock closed at $32.67 per share with a market capitalization of $13.38 billion.
Meridian Growth Fund stated the following regarding Chewy, Inc. (NYSE:CHWY) in its Q2 2024 investor letter:
“Chewy, Inc. (NYSE:CHWY) is an online provider of pet food, supplies, and medications. The company’s stock soared during COVID while customers accelerated online purchases and added pets to their families. Following a post-COVID correction, we re-established a position during the quarter at what we believe to be an attractive price. With nearly 80% of revenues recurring—a rarity for an online business—we believe Chewy is well-positioned to activate and grow its customer base. In addition, we can see its pharmacy business starting to improve net sales and margins per active customer and have high confidence in its new CFO. Both, in our view, could add significant value. The stock gained during the period as higher net sales per active customer increased almost 10%.”
A close-up shot of a store shelf stocked with pet food and supplies.
Chewy, Inc. (NYSE:CHWY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Chewy, Inc. (NYSE:CHWY) at the end of the second quarter which was 31 in the previous quarter. In the second quarter, Chewy, Inc.’s (NYSE:CHWY) net sales grew by approximately 3% to $2.86 billion. While we acknowledge the potential of Chewy, Inc. (NYSE:CHWY) 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 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.
