Diamond Hill Capital, an investment management company, released its “Long-Short Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The portfolio achieved positive returns in Q2 but trailed the Russell 1000 Index and the blended benchmark (60% Russell 1000 Index/40% Bloomberg US Treasury Bills 1-3 Month Index). The short positions didn’t perform as well as the index, giving a relative tailwind to the performance. The long positions in industrials, materials, and real estate holdings contributed to relative strength. In addition, you may look at the fund’s top 5 holdings to learn about its best picks in 2024.
Diamond Hill Long-Short Fund highlighted stocks like Ulta Beauty, Inc. (NASDAQ:ULTA) in the second quarter 2024 investor letter. Ulta Beauty, Inc. (NASDAQ:ULTA) is a US-based specialty beauty retailer. The one-month return of Ulta Beauty, Inc. (NASDAQ:ULTA) was 9.73%, and its shares gained 2.56% of their value over the last 52 weeks. On September 24, 2024, Ulta Beauty, Inc. (NASDAQ:ULTA) stock closed at $402.50 per share with a market capitalization of $18.964 billion.
Diamond Hill Long-Short Fund stated the following regarding Ulta Beauty, Inc. (NASDAQ:ULTA) in its Q2 2024 investor letter:
“Still-rising valuations have made identifying attractively valued, long ideas increasingly challenging — though we still found a few in Q2 that we believe the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. We established new long positions in VeriSign, Ulta Beauty, Inc. (NASDAQ:ULTA), Sysco Corporation and Lamb Weston Holdings during the quarter.
Ulta is a leading US specialty beauty retailer. As inflation has remained relatively elevated and consumers have found ways to economize and moderate discretionary spending, we believe Ulta is well-positioned to take share given its compelling portfolio of beauty brands across a range of price points, including its own private-label brand. We believe the current share price fails to account for an attractive outlook for the company and capitalized on a low valuation to initiate a position in Q2.”
A photograph of a customer testing out different products in the skincare aisle at a store.
Ulta Beauty, Inc. (NASDAQ:ULTA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Ulta Beauty, Inc. (NASDAQ:ULTA) at the end of the second quarter which was 52 in the previous quarter. Ulta Beauty, Inc.’s (NASDAQ:ULTA) net sales in the second quarter increased 0.9% to $2.6 billion and comparable sales decreased 1.2%. While we acknowledge the potential of Ulta Beauty, Inc. (NASDAQ:ULTA) 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 Ulta Beauty, Inc. (NASDAQ:ULTA) and shared Carillon Eagle Mid Cap Growth Fund’s views on the company. 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.