What Makes Five Below (FIVE) Stock Attractive? - InvestingChannel

What Makes Five Below (FIVE) Stock Attractive?

Giverny Capital, an investment management company, recently published its fourth-quarter investor letter in 2022. A copy of the same can be downloaded here. The model portfolio of the firm appreciated 8.49%, net of fees in the fourth quarter compared to a 7.56% return for the Standard & Poor’s 500 Index. For 2022, the fund delivered a -22.65% return compared to a -18.11% return for the Index. Oil and energy was the strongest sector in the year increased by 65%. In addition, you can check the top 5 holdings of the fund to see its best picks for 2022.

Giverny Capital highlighted stocks like Five Below, Inc. (NASDAQ:FIVE) in its Q4 2022 investor letter. Headquartered in Philadelphia, Pennsylvania, Five Below, Inc. (NASDAQ:FIVE) is a specialty value retailer. On January 26, 2023, Five Below, Inc. (NASDAQ:FIVE) stock closed at $193.65 per share. One-month return of Five Below, Inc. (NASDAQ:FIVE) was 9.49%, and its shares gained 21.92% of their value over the last 52 weeks. Five Below, Inc. (NASDAQ:FIVE) has a market capitalization of $10.75 billion.

Giverny Capital made the following comment about Five Below, Inc. (NASDAQ:FIVE) in its Q4 2022 investor letter:

“Our number seven holding at year-end was Five Below, Inc. (NASDAQ:FIVE), a value-oriented retail store aimed at young people. The shares lost 14% of their value during the year. Like Arista, Constellation and Heico, Five Below commands considerable respect from investors in the form of a rich PE multiple. That’s because it continues to grow its store base by about 20% annually, while generating outsized returns on capital. Teens are a notoriously fickle group, and it is fair to wonder if Five Below might one day lose favor. Five Below follows teen trends closely but I’ve been impressed by the value position. The store carries toys, candy and tchotchkes. But it also carries art supplies, school supplies, tech accessories and other practical merchandise that represents excellent value to a student. I believe sales and earnings could grow by 20% annually for the rest of the decade as Five Below rolls out across the US.”

Kohl's (NYSE:KSS)

Five Below, Inc. (NASDAQ:FIVE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Five Below, Inc. (NASDAQ:FIVE) at the end of the third quarter, which was 31 in the previous quarter.

We discussed Five Below, Inc. (NASDAQ:FIVE) in another article and shared Polen Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 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.

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