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Investment management company Polen Capital has released its “Polen US Small Company Growth Strategy” Q4 2023 investor letter. You can download a copy of the same here. In the fourth quarter, the fund returned 10.46% gross and 10.22% net, excluding fees, compared to a 12.75% return for the Russell 2000 Growth Index. In many ways, the firm views this performance as evidence of the stability of its investment approach in the face of frequent and significant market fluctuations. Plus, check out the fund’s top 5 holdings to find out the best stocks for 2023.
Polen US Small Company Growth Strategy’s Q4 2023 Investor Letter featured stocks like LGI Homes (NASDAQ:LGIH). LGI Homes, Inc. (NASDAQ:LGIH) is a home construction company headquartered in The Woodlands, Texas. On February 20, 2024, LGI Homes (NASDAQ:LGIH) stock closed at $116.34 per share. His 1-month return for LGI Homes (NASDAQ: LGIH) is 0.45%, and the company’s stock has increased his 11.45% in value over the past 52 weeks. LGI Homes, Inc. (NASDAQ:LGIH) has a market capitalization of $2.743 billion.
Polen US Small Company Growth Strategy said this about LGI Homes, Inc. (NASDAQ:LGIH) in its Q4 2023 investor letter:
“LGI Homes Co., Ltd.” (NASDAQ:LGIH) is a home construction company primarily located in the Southeast and Texas. Home construction was one of the worst performing industries during the 2008-2009 Global Financial Crisis (“GFC”), given that the home construction industry was not typically associated with quality. The addition of vendors may come as a surprise to some. But the industry has evolved significantly (and for the better) over the past 15 years. Drawing on lessons from the global financial crisis, many of today’s leading home builders are deploying asset-light strategies, carefully building in response to demand and resulting in higher profits, stronger balance sheets and more discipline. It is connected to a certain capital allocation. In addition to this, another long-term driver for the industry is the structural shortage that has persisted since the global financial crisis. LGI Homes focuses on building entry-level homes in “suburbs” approximately 40 minutes from metropolitan areas. The company has a unique operating model that profitably builds affordable homes for first-time homebuyers, and the company has a unique operating model that profitably builds affordable homes for first-time homebuyers, in some of the markets with the greatest long-term demand and supply shortages (first-time homebuyers).
Importantly, LGI has a founder-led management team with long-term proven capital allocation skills, best demonstrated by the fact that it remained profitable through the global financial crisis. Going forward, we expect internal rates of return (IRR) to be low in the 20% range throughout the cycle, with a relatively wide range of potential outcomes, which is reflected in the size of our positions. ”
A worker drives a nail into the frame of a single-family house under construction.
LGI Homes, Inc. (NASDAQ:LGIH) isn’t on the list of 30 most popular stocks among hedge funds. According to our database, at the end of the fourth quarter, LGI Homes (NASDAQ:LGIH) was held by 28 hedge fund portfolios, up from 23 at the prior quarter. Additionally, for investor letters from hedge funds and other leading investors, please visit our Hedge Fund Investor Letters Q4 2023 page.
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Disclosure: None. This article was originally published on Insider Monkey.
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