2Q2024 - U.S. Small Company Growth Commentary
Investing with an opportunity cost mindset aims to ensure capital is allocated to areas with what we view as the highest potential for long-term growth and return.
Read the full commentary and disclosures here
- Marking a shift from the first quarter's lower-quality and high price momentum style factors driving performance, the second quarter reflected more of a flight to safety. Concerns around stubbornly high inflation dampened views on interest rate cuts following the exuberance in equities that started in October.
- As the market grappled with ongoing economic uncertainty, stock price movements broadly exhibited above-average volatility relative to recent periods, often despite little fundamental change. Our Portfolio was not immune to the volatility.
In instances where we viewed stock prices as rising beyond what fundamentals justified, we right-sized positions and sourced funds to add to new and existing ideas with what we see as better risk-return profiles. - We initiated new positions in Option Care Health, AAON, Construction Partners, Applied Industrial Technologies, Installed Building Products, and Repligen. We exited our positions in Wingstop, Helen of Troy, Xpel, and Endava.
- We favor businesses with robust free cash flow, persistent growth, and high returns on capital. We aim to own companies that we think are undervalued relative to their long-term compounding potential.
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