Should You Invest in Leslie’s (LESL)?

Argosy Investors, an investment management company, released its third-quarter investor letter. A copy of the same can be downloaded here. The fund ended the quarter with 38.6% of the portfolio in cash and short-term government bonds. Year-to-date, the S&P 500 returned 13.1%. The recent increase in 10-year Treasury rates has led to a repricing of various assets, such as equities, real estate, and companies supported by private equity. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Argosy Investors highlighted stocks like Leslie’s, Inc. (NASDAQ:LESL) in the third quarter 2023 investor letter. Headquartered in Phoenix, Arizona, Leslie’s, Inc. (NASDAQ:LESL) is a direct-to-consumer pool and spa care brand. On November 24, 2023, Leslie’s, Inc. (NASDAQ:LESL) stock closed at $5.99 per share. One-month return of Leslie’s, Inc. (NASDAQ:LESL) was 18.61%, and its shares lost 58.89% of their value over the last 52 weeks. Leslie’s, Inc. (NASDAQ:LESL) has a market capitalization of $1.102 billion.

Argosy Investors made the following comment about Leslie’s, Inc. (NASDAQ:LESL) in its Q3 2023 investor letter:

“Valuations got more attractive during the quarter, and as a result we added to a number of existing positions. Starting with Leslie’s, Inc. (NASDAQ:LESL), I continue to believe pool services are essential for those who own them. At its current 6.5x multiple of forward free cash flow, LESL should look to pay down debt and repurchase shares. I’ve seen healthy companies become unhealthy by wasting precious capital on buybacks when they should have been allocating some capital to reducing debt. I hope LESL management does not make the same mistake. If they simply pay down debt from cash flow, they will generate significant equity value.”

A technician in safety gear inspecting a pool automated system.

Leslie’s, Inc. (NASDAQ:LESL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Leslie’s, Inc. (NASDAQ:LESL) at the end of third quarter which was 18 in the previous quarter.

We discussed Leslie’s, Inc. (NASDAQ:LESL) in another article and shared Jackson Peak Capital’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 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.