Columbia Threadneedle Investments, an investment management company, released its Columbia Contrarian Core Fund second quarter 2024 investor letter. A copy of the letter can be downloaded here. Columbia Contrarian Core Fund (Institutional Class shares) returned 5.39% (net of fees) in the quarter compared to the Russell 1000 Index’s 3.57% return. Favorable stock selection and positive sector allocation drove the fund’s outperformance in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Columbia Contrarian Core Fund highlighted stocks like Coty Inc. (NYSE:COTY) in the Q2 2024 investor letter. Headquartered in New York, New York, Coty Inc. (NYSE:COTY) engages in the business of beauty products. The one-month return of Coty Inc. (NYSE:COTY) was 1.07%, and its shares lost 13.58% of their value over the last 52 weeks. On September 26, 2024, Coty Inc. (NYSE:COTY) stock closed at $9.48 per share with a market capitalization of $8.227 billion.
Columbia Contrarian Core Fund stated the following regarding Coty Inc. (NYSE:COTY) in its Q2 2024 investor letter:
“Coty Inc. (NYSE:COTY) – Coty is a beauty company specializing in fragrance, skincare and makeup. For many years, Coty has underperformed peers due to a dilapidated brand portfolio, slow innovation, poor execution, high leverage, and more recently, concerns about fragrance category durability. However, under the leadership of CEO Sue Nabi, the company is undergoing a turnaround by accelerating prestige fragrances and stabilizing consumer beauty products through innovation and improved execution. Fragrances have been extremely strong, and that is Coty’s main product line. However, there is a concern that the market will turn over despite Coty’s management trying to explain that this is a generational shift in usage globally. In addition, Ulta has been losing market share to Sephora, so the entire U.S. beauty market is in a bit of a limbo, adding to uncertainty. Finally, U.S. data from analysts throughout the quarter largely looks only at mass makeup data. Where e.l.f. Beauty is growing massively, Coty is holding share, and everyone else is suffering. This data completely ignores the prestige market where Coty is larger and growing faster. None of these factors are actually impacting Coty, but the stock has been getting dragged down by overall sentiment.”
A close-up of a woman’s face wearing a beauty product, highlighting the company’s range of luxury items.
Coty Inc. (NYSE:COTY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Coty Inc. (NYSE:COTY) at the end of the second quarter which was 22 in the previous quarter. While we acknowledge the potential of Coty Inc. (NYSE:COTY) 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 Coty Inc. (NYSE:COTY) and shared the list of worst affordable stocks under $10. 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.