Wasatch Global Investors, an asset management company, released its “Wasatch Micro-Cap Value Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. On Wednesday, September 18, the Federal Reserve reduced its key interest rate by half a percentage point, marking its first cut since 2020. Following this announcement, stocks reached all-time highs as the Fed indicated there would be more cuts planned for this year and the next. The strategy posted gains, outperforming the benchmark Russell Microcap® Index, which increased 8.29% during the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Wasatch Micro-Cap Value Strategy highlighted stocks like Arhaus, Inc. (NASDAQ:ARHS), in the third quarter 2024 investor letter. Arhaus, Inc. (NASDAQ:ARHS) is a lifestyle brand and premium retailer in the home furnishings market. The one-month return of Arhaus, Inc. (NASDAQ:ARHS) was -16.61%, and its shares lost 19.88% of their value over the last 52 weeks. On January 3, 2025, Arhaus, Inc. (NASDAQ:ARHS) stock closed at $9.19 per share with a market capitalization of $1.29 billion.
Wasatch Micro-Cap Value Strategy stated the following regarding Arhaus, Inc. (NASDAQ:ARHS) in its Q3 2024 investor letter:
“Arhaus, Inc. (NASDAQ:ARHS) also detracted from performance. The company is a rapidly growing lifestyle brand and omnichannel retailer of premium home furnishings. The company’s earnings declined, performing relatively worse than other retailers in a softer market for consumer-discretionary goods. But we believe the company has a superior business model and like that it continues to invest in store expansion. Going forward, we think Arhaus has an attractive long-term position in the luxury-furniture sector.”
A professional interior designer selecting items from the company including textiles, accessories, and outdoor lighting.
Arhaus, Inc. (NASDAQ:ARHS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Arhaus, Inc. (NASDAQ:ARHS) at the end of the third quarter which was 17 in the previous quarter. Arhaus, Inc. (NASDAQ:ARHS) reported a net revenue of $319 million, net income of $10 million and adjusted EBITDA of $23 million in the third quarter. While we acknowledge the potential of Arhaus, Inc. (NASDAQ:ARHS) 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 Arhaus, Inc. (NASDAQ:ARHS) and shared the list of best furniture stocks to invest in according to analysts. 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.