TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the fund returned -1.59% (gross) and -1.83% (net), compared to a -2.92% return for the Russell 2000 Growth Index. The equity markets performed well in the second quarter, as long as one held only a handful of the biggest, fastest-growing U.S. stocks. Despite profitability turning positive this quarter following negative or neutral results in previous quarters, momentum remained the most important component in the worldwide market. In addition, please check the fund’s top five holdings to know its best picks in 2024.
TimesSquare Capital Management U.S. Small Cap Growth Strategy highlighted stocks like MediaAlpha, Inc. (NYSE:MAX), in the second quarter 2024 investor letter. MediaAlpha, Inc. (NYSE:MAX) is an insurance customer acquisition platform in the United States. The one-month return of MediaAlpha, Inc. (NYSE:MAX) was 2.58%, and its shares gained 123.79% of their value over the last 52 weeks. On September 16, 2024, MediaAlpha, Inc. (NYSE:MAX) stock closed at $17.50 per share with a market capitalization of $1.148 billion.
TimesSquare Capital Management U.S. Small Cap Growth Strategy stated the following regarding MediaAlpha, Inc. (NYSE:MAX) in its Q2 2024 investor letter:
“For the Communication Services sector, we generally prefer to invest in media and services companies that are either well placed from an advertising perspective with a target audience or provide differentiated services. MediaAlpha, Inc. (NYSE:MAX) operates a leading insurance customer acquisition platform. They reported revenues, transaction value, and profits materially above consensus expectations and issued favorable guidance for the second quarter. Its shares initially fell on news of a secondary offering in early May. A further decline was attributable to a short report alleging improprieties with MediaAlpha’s healthcare lead generation activities. The company has been cooperating with a civil investigative demand from the FTC since February and believes its marketing complies with best practices. Despite having previously disclosed the FTC investigation, the stock price still declined -35% in reaction to the short report. Notwithstanding the scrutiny of MediaAlpha’s healthcare business, we see significant opportunity within its property & casualty segment. As auto insurance pricing has sharply risen and underwriting profitability has improved, insurers are increasing customer acquisition spending. We view MediaAlpha as particularly well positioned to benefit from rising marketing budgets and an acceleration in the pursuit of new business growth by insurers.”
A smiling customer with a health insurance plan, a customer that was successfully acquired thanks to the company’s efforts.
MediaAlpha, Inc. (NYSE:MAX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held MediaAlpha, Inc. (NYSE:MAX) at the end of the second quarter which was 16 in the previous quarter. The second quarter performance of MediaAlpha, Inc. (NYSE:MAX) surpassed expectations, with record transaction value and adjusted EBITDA of $321.8 million and $18.7 million respectively. While we acknowledge the potential of MediaAlpha, Inc. (NYSE:MAX) 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 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.