Warren Buffett Is Not Giving Up on These 5 Stocks Despite Losses

4. RH (NYSE:RH)

Number of Hedge Fund Holders: 59

YTD Share Price Decline as of August 19: 44.80%

RH (NYSE:RH) is a California-based retailer of home furnishings. The stock has plummeted about 45% year to date as of August 19. Warren Buffett’s Berkshire Hathaway owned 2.17 million shares of RH (NYSE:RH) in the second quarter of 2022, worth $460.60 million, representing 0.15% of the total 13F portfolio. It is one of the notable stocks that Buffett is not giving up on despite losses. 

Citi analyst Steven Zaccone said on July 1 that key investor concerns after RH (NYSE:RH)’s second guidance cut in a month are impacting primary business and execution risk. The analyst has similar short-term concerns, but believes “a lot of damage is already priced in”. He maintained a Buy rating on RH (NYSE:RH) with a $338 price target.

Among the hedge funds tracked by Insider Monkey, Stephen Mandel’s Lone Pine Capital held a prominent stake in RH (NYSE:RH) at the end of the second quarter of 2022, with 1.7 million shares worth $376.35 million. Overall, 59 hedge funds were bullish on the stock at the conclusion of Q2 2022. 

Here is what Polen US SMID Company Growth Fund has to say about RH (NYSE:RH) in its Q1 2022 investor letter:

“RH is a furniture store company with brand recognition and a unique business model. The company’s stock price fell sharply over the first three months of 2022 despite solid operating results, which resulted in what we believed to be an attractive opportunity to add to our position in the company. We are mindful that, on the margin, the company is certainly experiencing some early impact from record inflation and rising interest rates, and we feel comfortable in both the management team’s ability to navigate these challenges and the power of the company’s brand and its long-term potential.”