Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The Small Company Fund returned 0.48%, significantly underperforming the Russell 2000 Growth index’s 7.58% return. Following the release of the inflation report in February, the Small Company Fund experienced underperformance as investors shifted away from high-growth companies, impacting their valuations. In addition, check the fund’s top five holdings to know its best picks in 2024.
The Brown Capital Management Small Company Fund highlighted stocks like Xometry, Inc. (NASDAQ:XMTR) in the first quarter 2024 investor letter. Xometry, Inc. (NASDAQ:XMTR) is an online marketplace that helps buyers to source custom-manufactured parts and assemblies. Xometry, Inc.’s (NASDAQ:XMTR) one-month return was -26.79%, and its shares lost 44.23% of their value over the last 52 weeks. On June 24, 2024, Xometry, Inc. (NASDAQ:XMTR) stock closed at $11.94 per share with a market capitalization of $582.668 million.
The Brown Capital Management Small Company Fund stated the following regarding Xometry, Inc. (NASDAQ:XMTR) in its first quarter 2024 investor letter:
“Xometry, Inc. (NASDAQ:XMTR) operates an online manufacturing platform that allows customers to get quotes, place orders and receive custom-manufactured parts that meet their specifications. The platform is based on a network of more than 5,000 manufacturing partners across multiple countries that provide a broad range of manufacturing capabilities, including CNC (Computer Numerically Controlled) machining, injection molding, 3D printing and sheet-metal cutting. Xometry’s products save time and money by making procurement and manufacturing more efficient. Buyers quickly receive finished parts, and manufacturing partners reduce excess capacity by sourcing additional jobs through the Xometry network.
During the quarter, Xometry reported fourth quarter results that were in line with expectations, achieving revenue growth of 31% over the year-earlier period. The total number of active customers on the platform increased by 36% over the previous year, and the number of large customers—those spending more than $50,000 annually with Xometry—increased by 30%. However, the company noted softness in January due to a lack of large orders. As a result, the company provided lower-than-expected revenue guidance for 2024, which tanked the company’s stock price. Xometry remains a leader and innovator in its industry and is gaining market share from competitors. We believe the company is in the early stages of a growth trajectory that should last for many years.”
A machinist operating a CNC machine in a well-lit facility, scrutinizing the quality of a part.
Xometry, Inc. (NASDAQ:XMTR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Xometry, Inc. (NASDAQ:XMTR) at the end of the first quarter which was 12 in the previous quarter. In the first quarter, Xometry, Inc.’s (NASDAQ:XMTR) revenue grew by 16% year-over-year to reach $123 million. While we acknowledge the potential of Xometry, Inc. (NASDAQ:XMTR) 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.
We discussed Xometry, Inc. (NASDAQ:XMTR) in another article and shared Alger Weatherbie Specialized Growth Fund’s views on the company. Xometry, Inc. (NASDAQ:XMTR) was one of the top contributors to The Brown Capital Management Small Company Fund in the previous quarter. In addition, please check out our hedge fund investor letters Q1 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.
