Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -2.62% compared to a -3.64% return for the Russell 2000 Value Index. In the first half of 2024, the fund returned 0.65% versus -0.85% for the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like Sprouts Farmers Market, Inc. (NASDAQ:SFM) in the second quarter 2024 investor letter. Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a retailer of fresh, natural, and organic food products under the Sprouts brand. The one-month return of Sprouts Farmers Market, Inc. (NASDAQ:SFM) was 12.32%, and its shares gained 151.70% of their value over the last 52 weeks. On August 13, 2024, Sprouts Farmers Market, Inc. (NASDAQ:SFM) stock closed at $95.62 per share with a market capitalization of $9.574 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Sprouts Farmers Market, Inc. (NASDAQ:SFM) in its Q2 2024 investor letter:
“Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a natural grocer with great merchandising and best-in-class gross margins.19 The company has attractive returns on capital, great new store economics, and they are accelerating their unit growth from 12 stores a year to 35 stores in 2024 on a base of roughly 400 stores. Over the past year, the stock has performed well after reporting strong operating results and from a low initial valuation. The stock price jumped when the company reported 2023Q4 results and gave strong 2024 guidance on February 22, 2024. We have maintained our position and allowed it to appreciate. Although SFM’s share price has increased faster than bottom line results, we believe SFM still trades in the “range of reasonableness” for a high-quality, non- cyclical franchise that can reinvest capital at attractive rates of return.”
A bright, colorful display of fresh produce in a grocery store.
Sprouts Farmers Market, Inc. (NASDAQ:SFM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Sprouts Farmers Market, Inc. (NASDAQ:SFM) at the end of the first quarter which was 30 in the previous quarter. Sprouts Farmers Market, Inc.’s (NASDAQ:SFM) sales were $1.9 billion for the second quarter, up 12% from Q2 2023. While we acknowledge the potential of Sprouts Farmers Market, Inc. (NASDAQ:SFM) 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 Sprouts Farmers Market, Inc. (NASDAQ:SFM) and shared FPA Queens Road Small Cap Value Fund’s views on the company in the previous quarter. 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.