Floor & Decor Holdings (FND) fell due to a decline in residential sales
Baron Funds, an investment management firm, has released its Baron Discovery Fund investor letter for the second quarter of 2024. A copy of the letter can be downloaded here. In the second quarter, the fund (Institutional Shares) lost 7.78%, lagging the Russell 2000 Growth Index’s return of 2.92%. The lion’s share of negative attribution and 6.52% of the fund’s negative performance during the quarter were attributable to the ten worst-performing stocks. The firm believes that downside moves are more technically tied to macroeconomic issues and the trading environment and could reverse quickly. Plus, check out the fund’s top five holdings to learn its top picks for 2024.
Baron Discovery Fund highlighted stocks like Floor & Decor Holdings, Inc. (NYSE:FND) in its Q2 2024 investor letter. Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard flooring and related accessories. Floor & Decor Holdings, Inc. (NYSE:FND)’s one-month return was 10.88%, and its shares gained 11.02% over the past 52 weeks. On August 22, 2024, Floor & Decor Holdings, Inc. (NYSE:FND) stock closed at $106.50 per share with a market cap of $11.413 billion.
Baron Discovery Fund stated the following about Floor & Decor Holdings, Inc. (NYSE:FND) in its second quarter 2024 investor letter:
“Floor & Decor Holdings, Inc.” (NYSE:FND) is a specialty retailer of hard flooring and accessories in the United States. While the company continues to open new stores and consolidate the hard flooring market through its large format stores with consistently low prices, the decline in residential sales has put pressure on near-term sales trends. We maintain our long-term conviction. We view Floor & Decor as a differentiated, high-growth retailer that offers a broader assortment of low-cost products than its competitors. The company holds an 8% market share in the highly fragmented $21 billion U.S. hard flooring market and we believe it will continue to gain market share. We believe the replacement of carpet with hard flooring, which we view as a long-term shift in the flooring industry, will drive growth. We believe Floor & Decor can grow its store count by 15% to 20% annually.”
A top view of a website displaying the different flooring options available for purchase.
Floor & Decor Holdings, Inc. (NYSE:FND) is not on our list of the 31 most popular stocks among hedge funds. According to our database, 34 hedge fund portfolios held Floor & Decor Holdings, Inc. (NYSE:FND) at the end of the second quarter, compared to 26 in the previous quarter. In the second quarter, Floor & Decor Holdings, Inc. (NYSE:FND)’s total revenue fell 0.2% to $1,133,100,000 and comparable store sales fell 9% compared to the second quarter of 2023. While we recognize the potential of Floor & Decor Holdings, Inc. (NYSE:FND) as an investment, we believe AI stocks promise higher returns and do so in a shorter period of time. If you’re looking for an AI stock that’s as promising as NVIDIA but trades at less than 5x earnings, check out our report on the cheapest AI stock.
In another article, we discussed Floor & Decor Holdings, Inc. (NYSE:FND) and published the list of the best home improvement stocks to buy. You can also find more investor letters from hedge funds and other leading investors on our Hedge Fund Q2 2024 Investor Letters page.
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Disclosure: None. This article was originally published at Insider Monkey.
