Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, the strategy gained but underperformed the benchmark, the Russell 2000 Growth Index which rose 7.58%. The broader Russell 2000 Index increased 5.18% during the same period. Holdings in health care and consumer staples—and lack of exposure in materials, utilities, and communication services- contributed to the relative performance of the strategy, while holdings in information technology, consumer discretionary, and industrials detracted. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Wasatch Small Cap Growth Strategy highlighted stocks like HealthEquity, Inc. (NASDAQ:HQY), in the first quarter 2024 investor letter. HealthEquity, Inc. (NASDAQ:HQY) provides financial technology solutions for healthcare and spending decisions. The one-month return of HealthEquity, Inc. (NASDAQ:HQY) was 13.13%, and its shares gained 33.24% of their value over the last 52 weeks. On June 10, 2024, HealthEquity, Inc. (NASDAQ:HQY) stock closed at $86.91 per share with a market capitalization of $7.562 billion.
Wasatch Small Cap Growth Strategy stated the following regarding HealthEquity, Inc. (NASDAQ:HQY) in its first quarter 2024 investor letter:
“Another substantial contributor was HealthEquity, Inc. (NASDAQ:HQY), the largest U.S. non-bank custodian for health savings accounts (HSAs). Along with its primary business of offering HSAs, the company facilitates employer-sponsored lifestyle and commuter benefits. The stock was down late last year because investors were expecting an environment of lower interest rates that would cause the company to earn less income from money held on deposit for customers. Our analysis gives us visibility into HealthEquity’s long-term earnings-growth potential, which we believe will remain strong for years to come. This insight gave us confidence to add to our position when the stock price dropped. During the first quarter, the stock climbed based on strong revenue and earnings growth—and we think the company’s annual growth rates will stay in the double digits for the next several years.”
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HealthEquity, Inc. (NASDAQ:HQY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held HealthEquity, Inc. (NASDAQ:HQY) at the end of the first quarter which was 18 in the previous quarter. HealthEquity, Inc. (NASDAQ:HQY) reported strong growth in the recent quarter across all key metrics, with revenue increased by 18% and EBITDA by 36%. While we acknowledge the potential of HealthEquity, Inc. (NASDAQ:HQY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed HealthEquity, Inc. (NASDAQ:HQY) and shared the list of fastest growing fintech companies in 2024. Wasatch Global Investors maintained its position in HealthEquity, Inc. (NASDAQ:HQY) due to its confidence in the stock’s growth potential, despite the stock’s decline in Q4 2023. In addition, please check out our hedge fund investor letters Q1 2024 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.
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