If you are looking for the best ideas for your portfolio you may want to consider some of Palm Valley Capital Management’s top stock picks. Palm Valley Capital, an investment management firm, is bullish on Scholastic Corp (NASDAQ:SCHL) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Scholastic Corp (NASDAQ:SCHL) stock. Scholastic Corp (NASDAQ:SCHL) publishes and distributes children’s books worldwide.
On July 1, 2019, Palm Valley Capital had released its Q2 2019 investor letter. The investment firm said that Scholastic Corp (NASDAQ:SCHL) was one of the ten equities that the fund held in Q2 2019. The stock has posted a return of -36.0% in the trailing one year period, underperforming fund’s benchmark the S&P Small Cap 600 Index which returned -2.2% in the same period. This suggests that the investment firm was wrong in its decision. On a year-to-date basis, Scholastic Corp (NASDAQ:SCHL) stock has fallen by 41.4%.
Palm Valley Capital fund posted a return of 0.7% from April 30, 2019 through June 30, 2019, outperforming fund’s benchmark the S&P Small Cap 600 Index which returned -1.9% in the same period. Let’s take a look at comments made by Palm Valley Capital about Scholastic Corp (NASDAQ:SCHL) in the Q2 2019 investor letter.
“Scholastic is the world’s largest publisher and distributor of children’s books and is a leading provider of instructional materials for grades pre-K to 12. One month ago, the company’s stock dropped after Scholastic sharply reduced guidance for the fiscal year, primarily due to the impact on book club sales from regulatory changes on sales tax collections. Scholastic’s corporate cash and owned headquarters building, which is located on Broadway in New York City’s SoHo neighborhood, account for over half of the firm’s market capitalization. We were able to acquire shares in this nearly 100-year-old company at tangible book value, and we think Scholastic will continue to be a magnet for talented authors and a fixture in elementary schools.”
In May, we published an article revealing Palm Valley Capital’s bullish investment thesis on Scholastic Corp (NASDAQ:SCHL) stock in its Q1 2020 investor letter. This suggests that the investment firm has been bullish for a long time on Scholastic Corp (NASDAQ:SCHL).
In Q1 2020, the number of bullish hedge fund positions on Scholastic Corp (NASDAQ:SCHL) stock decreased by about 27% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Scholastic’s growth potential. Our calculations showed that Scholastic Corp (NASDAQ:SCHL) isn’t ranked among the 30 most popular stocks among hedge funds.
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Video: Top 5 Stocks Among Hedge Funds
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Disclosure: None. This article is originally published at Insider Monkey.