Polen Capital: “RH has a Long Runway to Further Expand Into Other Home Furnishings Categories”

Polen Capital, an investment management firm, published its “Polen U.S. SMID Company Growth Composite” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 2.35% was delivered by the fund for the first quarter of 2021, trailing its Russell 2500 Growth benchmark that delivered a 2.49% gain for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Polen Capital, in its Q1 2021 investor letter, mentioned RH (NYSE: RH), and shared their insights on the company. RH is a Corte Madera, California-based retail store company that currently has a $13.3 billion market capitalization. Since the beginning of the year, RH delivered a 42.56% return, extending its 12-month gains to 221.72%. As of May 25, 2021, the stock closed at $638.00 per share.

Here is what Polen Capital has to say about RH in its Q1 2021 investor letter:

RH was also a top contributor during the quarter. RH is a leading luxury retailer in home furnishings, including high-end luxury furniture, home décor, lighting, textiles, etc. The company has experienced high demand for its products over the past year, despite many of its galleries and integrated restaurants being closed, at least temporarily, in 2020. We think the management team has continued to make thoughtful investments in the core business as well as other adjacencies to further meet customer needs. We believe RH has a long runway to further expand into other home furnishings categories, expand its footprint both domestically and internationally, and launch other luxury adjacent categories.”

Our calculations show that RH (NYSE: RH) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, RH was in 50 hedge fund portfolios, compared to 42 funds in the fourth quarter of 2020. RH delivered a 26.87% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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