Fred Alger Management, an investment management company, released its “Alger Small Cap Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities rose in the fourth quarter, driven by decisive U.S. presidential election outcome. Class A shares of the fund outperformed the Russell 2000 Growth Index in the quarter. The Information Technology and Health Care sectors positively influenced performance, while Consumer Discretionary and Financials negatively impacted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Alger Small Cap Growth Fund highlighted stocks like Wingstop Inc. (NASDAQ:WING) in the fourth quarter 2024 investor letter. Wingstop Inc. (NASDAQ:WING) is a restaurant company that operates under the brand name Wingstop. The one-month return of Wingstop Inc. (NASDAQ:WING) was 2.93%, and its shares gained 4.77% of their value over the last 52 weeks. On January 27, 2024, Wingstop Inc. (NASDAQ:WING) stock closed at $292.52 per share with a market capitalization of $8.545 billion.
Alger Small Cap Growth Fund stated the following regarding Wingstop Inc. (NASDAQ:WING) in its Q4 2024 investor letter:
“Wingstop Inc. (NASDAQ:WING) is a franchisor and operator of restaurants, which engages in the provision of cooked-to-order, hand-sauced, and tossed chicken wings. While the company reported better-than-expected fiscal third quarter revenues, earnings came in below analyst estimates due to higher stock-based compensation and implementation costs for strategic initiatives. Domestic same store sales (SSS) increased to 21% from 15% a year ago, although this was below the SSS of 28% the prior quarter. While management reiterated full-year SSS guidance of 20% and raised its unit growth target, the implied fiscal fourth quarter SSS growth caused Wingstop’s share price to fall. Despite these concerns, we believe company fundamentals remain intact, with average unit volumes doubling since 2019, an attractive franchised model, and best-in[1]class unit economics driving long-term growth potential.”
Customers savoring boneless wings at a bustling restaurant owned by the company.
Wingstop Inc. (NASDAQ:WING) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Wingstop Inc. (NASDAQ:WING) at the end of the third quarter which was 31 in the previous quarter. Wingstop Inc.’s (NASDAQ:WING) total revenue for the quarter increased 38.8% to $162.5 million. While we acknowledge the potential of Wingstop Inc. (NASDAQ:WING) 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 Wingstop Inc. (NASDAQ:WING) and shared the list of high growth restaurant stocks for 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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Disclosure: None. This article is originally published at Insider Monkey.