Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The Small Company Fund returned 8.48% in the quarter, roughly in line with the Russell 2000 Growth index’s 8.41% return. The Fund has only gained 1.80% year to date, far behind the benchmark’s return of 13.22%, despite this quarter representing a minor move toward a fundamentally driven market. In addition, check the fund’s top five holdings to know its best picks in 2024.
The Brown Capital Management Small Company Fund highlighted stocks like RxSight, Inc. (NASDAQ:RXST), in the third quarter 2024 investor letter. RxSight, Inc. (NASDAQ:RXST) is a commercial-stage medical device company specializes in the light adjustable intraocular lenses (LAL) used in cataract surgery. The one-month return of RxSight, Inc. (NASDAQ:RXST) was -14.81%, and its shares lost 3.66% of their value over the last 52 weeks. On December 19, 2024, RxSight, Inc. (NASDAQ:RXST) stock closed at $38.19 per share with a market capitalization of $1.415 billion.
The Brown Capital Management Small Company Fund stated the following regarding RxSight, Inc. (NASDAQ:RXST) in its Q3 2024 investor letter:
“RxSight, Inc. (NASDAQ:RXST) is the first and only commercially available light adjustable lens (LAL) currently on the market for cataract surgery. LAL is a type of premium intraocular lens (IOL) that allows for adjustment of the lenses post-surgery. LAL uses proprietary photosensitive material that changes shape in response to specific patterns of ultraviolet light from an RxSight light source. This allows a physician to fine-tune a patient’s vision following cataract surgery to achieve optimal results. In addition to providing improved vision to patients, RxSight’s premium lenses are also more profitable to the operating physician when compared to traditional monofocal lenses. Adoption of premium IOL’s has been growing in recent years, and with only 20% penetration in the U.S. and 11% globally, we think these rates could grow significantly over the long term. RxSight reported revenue of $89 million in 2023, with revenue growing more than 50% annually in recent years since the product was approved by the FDA in November 2017. We expect the company to sustain revenue growth in excess of 25% in the coming years, which should allow it to reach profitability by 2026. RxSight also has a management team with a proven history of working well together and creating value on previous successful ventures in the ophthalmology market. Thanks to its superior product, its strong value propositions for patients and physicians, its significant market opportunity and its experienced management team, we expect RxSight to grow for years to come.”
A close up detail of a cataract surgery instrument in the hand of a cataract doctor.
RxSight, Inc. (NASDAQ:RXST) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held RxSight, Inc. (NASDAQ:RXST) at the end of the third quarter which was 34 in the previous quarter. RxSight, Inc. (NASDAQ:RXST) reported $35.3 million in revenues in the third quarter 2024, up 59% compared to Q3 2023 and up 1% compared to Q2 2024. While we acknowledge the potential of RxSight, Inc. (NASDAQ:RXST) 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 RxSight, Inc. (NASDAQ:RXST) and shared the list of most promising small-cap stocks according to hedge funds. In addition, please check out our hedge fund investor letters Q3 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.