Wasatch Global Investors, an asset management company, released its “Wasatch U.S. Select Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. stocks experienced fluctuations during the third quarter but ultimately closed with strong gains. This positive outcome was partly driven by a shared belief that the U.S. economy might attain a soft landing and that interest rate reductions could be forthcoming. In September, the Federal Reserve acted on this sentiment by lowering its benchmark interest rate for the first time since 2020. Against this backdrop, strategy gained and outperformed the benchmark Russell 3000® Growth Index, which was up 3.42%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Wasatch U.S. Select Strategy highlighted stocks like Five Below, Inc. (NASDAQ:FIVE), in the third quarter 2024 investor letter. Five Below, Inc. (NASDAQ:FIVE) is a US-based specialty value retailer. The one-month return of Five Below, Inc. (NASDAQ:FIVE) was -13.28%, and its shares lost 49.67% of their value over the last 52 weeks. On January 3, 2025, Five Below, Inc. (NASDAQ:FIVE) stock closed at $97.07 per share with a market capitalization of $5.34 billion.
Wasatch U.S. Select Strategy stated the following regarding Five Below, Inc. (NASDAQ:FIVE) in its Q3 2024 investor letter:
“Another detractor was Five Below, Inc. (NASDAQ:FIVE). A specialty value retailer, the company offers a variety of merchandise at discounted prices. In recent quarters, Five Below has continued to grapple with several headwinds, including higher levels of customer theft and a tougher consumer-spending environment—particularly with lower-income customers who have pulled back spending on nonessential items. While we believe investors may be overlooking the company’s growth potential as it continues opening new stores with strong unit economics, we sold the stock in order to focus on other opportunities.”
A family happily shopping for everyday items in a specialty retail store.
Five Below, Inc. (NASDAQ:FIVE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Five Below, Inc. (NASDAQ:FIVE) at the end of the third quarter which was 31 in the previous quarter. The third quarter sales of Five Below, Inc. (NASDAQ:FIVE) increased 15% to $844 million. While we acknowledge the potential of Five Below, Inc. (NASDAQ:FIVE) 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 Five Below, Inc. (NASDAQ:FIVE) and shared the list of stocks that will bounce back according to hedge funds. Polen Global SMID Company Growth exited its position in Five Below, Inc. (NASDAQ:FIVE) during Q3 2024. 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.