Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The Small Company Fund returned -6.57%, underperforming the Russell 2000 Growth index’s 2.92% decline. Fundamental and macroeconomic factors drove the underperformance of the fund in the quarter. The fund aims to identify and invest in Exceptional Growth Companies (EGCs) that focus on products and services their customers cannot live without. In addition, check the fund’s top five holdings to know its best picks in 2024.
Brown Capital Management Small Company Fund highlighted stocks like AppFolio, Inc. (NASDAQ:APPF), in the second quarter 2024 investor letter. AppFolio, Inc. (NASDAQ:APPF) offers cloud business management solutions for the real estate industry. The one-month return of AppFolio, Inc. (NASDAQ:APPF) was 4.76%, and its shares gained 17.32% of their value over the last 52 weeks. On September 6, 2024, AppFolio, Inc. (NASDAQ:APPF) stock closed at $222.92 per share with a market capitalization of $8.086 billion.
Brown Capital Management Small Company Fund stated the following regarding AppFolio, Inc. (NASDAQ:APPF) in its Q2 2024 investor letter:
“Second, our portfolio holdings are well positioned to exploit future opportunities. We invest in many companies that are producing AI-based applications for their businesses and customers. Examples include enterprise-software companies with industry-specific data, such as AppFolio, Inc. (NASDAQ:APPF) and Smartsheet (SMAR). Recently Appfolio released updated Generative AI features that help users increase productivity through automation. Smartsheet has integrated AI features into its services, including formula generation, data analytics and a chat bot. Investing in AI now, even though overall revenue growth is depressed, will leave these companies with even better products. Additionally, adoption of these tools could lead to more licenses sold as well as higher-priced licenses per user.”
A close-up shot of a user-friendly and customizable interface of the company’s software, designed to suit different workflows.
AppFolio, Inc. (NASDAQ:APPF) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held AppFolio, Inc. (NASDAQ:APPF) at the end of the second quarter which was 36 in the previous quarter. The second quarter revenue of AppFolio, Inc. (NASDAQ:APPF) was up 34% year-over-year to $197 million. While we acknowledge the potential of AppFolio, Inc. (NASDAQ:APPF) 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 AppFolio, Inc. (NASDAQ:APPF) and shared Ray Dalio’s top growth stock picks with 30%+ revenue growth. AppFolio, Inc. (NASDAQ:APPF) contributed to the performance of Brown Capital Management Small Company Fund 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.