Next Century Growth Investors, LLC, an investment Management Company, released its “Small Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The equities market in 2024 saw mixed results in the second quarter. Small-cap indices generally posted negative results, whereas large-cap indices posted favorable results. The strategy returned (3.32)% net of fees in the quarter, compared to a (2.91)% return for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
NCG Small Cap Strategy highlighted stocks like Smith Douglas Homes Corp. (NYSE:SDHC) in the second quarter 2024 investor letter. Smith Douglas Homes Corp. (NYSE:SDHC) designs, constructs, and sells single-family homes. The one-month return of Smith Douglas Homes Corp. (NYSE:SDHC) was 14.86%, and its shares gained 40.37% of their value over the last three months. On August 29, 2024, Smith Douglas Homes Corp. (NYSE:SDHC) stock closed at $37.03 per share with a market capitalization of $1.899 billion.
NCG Small Cap Strategy stated the following regarding Smith Douglas Homes Corp. (NYSE:SDHC) in its Q2 2024 investor letter:
“Smith Douglas Homes Corp. (NYSE:SDHC) is a single-family homebuilder, primarily focused on the entry-level buyer. The company went public in January of this year. SDHC offers a strong value proposition to prospective buyers with the ability for home customizations and a below average market price point. With favorable demographics and low existing home inventory due to a high percentage of existing homes being locked in at mortgage rates significantly below current market levels, SDHC is well-positioned to capture demand from the entry-level buyer.”
Aerial view of a construction site for a single family detached home.
Smith Douglas Homes Corp. (NYSE:SDHC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Smith Douglas Homes Corp. (NYSE:SDHC) at the end of the second quarter which was 20 in the previous quarter. Smith Douglas Homes Corp. (NYSE:SDHC) reported $220.9 million in revenue and $25.9 million in pre-tax income for the second quarter. While we acknowledge the potential of Smith Douglas Homes Corp. (NYSE:SDHC) 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 Smith Douglas Homes Corp. (NYSE:SDHC) and shared Next Century Growth Investors 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.
