Polen Capital, an investment management firm, released its “U.S. Small Company Growth Fund” third quarter 2023 investor letter, a copy of which can be downloaded here. In the third quarter, the U.S. Small Company Growth Composite Portfolio, referred to as the “Portfolio,” posted returns of -3.66% gross and -3.97% net of fees. This performance is in contrast to the -7.32% return of the Russell 2000 Growth Index, known as the “Index.” Take a moment to review the fund’s top 5 holdings to gain insights into their primary investment choices for 2023.
In its Q3 2023 investor letter, Polen U.S. Small Company Growth mentioned Leslie’s, Inc. (NASDAQ:LESL) and explained its insights for the company. Leslie’s, Inc. (NASDAQ:LESL) is a Phoenix, Arizona-based swimming pool supplies and related products retailer with a $942.1 million market capitalization. Leslie’s, Inc. (NASDAQ:LESL) delivered a -58.07% return since the beginning of the year, while its 12-month returns are down by -61.90%. The stock closed at $5.12 per share on November 3, 2023.
Here is what Polen U.S. Small Company Growth has to say about Leslie’s, Inc. (NASDAQ:LESL) in its Q3 2023 investor letter:
“Leslie’s is the largest pool maintenance retailer in the US, with a long history of durable revenue and earnings growth. After following the company for months, we initiated a new position in Leslie’s, recognizing that there were near-term risks related to an unprecedented several years in the industry. While we believed we had waited patiently for an attractive entry price for long-term investment, the risks we had identified were far worse in magnitude than expected. Cold weather and excess inventory negatively impacted the critical summer pool season. These factors would have been surmountable if not for poor management decision-making that amplified the impact on Leslie’s financials and increased the balance sheet risk. While we believe the business will recover, we believe management has put the company in a position that restricts reinvestment and limits growth.”
A technician in safety gear inspecting a pool automated system.
Our calculations show that Leslie’s, Inc. (NASDAQ:LESL) does not belong on our list of the 30 Most Popular Stocks Among Hedge Funds. Leslie’s, Inc. (NASDAQ:LESL) was in 18 hedge fund portfolios at the end of the second quarter of 2023, compared to 22 funds in the previous quarter. Leslie’s, Inc. (NASDAQ:LESL) delivered a -25.80% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q3 2023 page.
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Disclosure: None. This article is originally published at Insider Monkey.
