Should You Consider Adding The Children’s Place (PLCE) to Your Portfolio?
Choice Equities Capital Management, a hedge fund manager, released its second-quarter 2023 investor letter recently. You can view it here. In the second quarter, the fund returned +8.0% on a net basis which brought the year-to-date net performance to +9.0%. This compares to Russell 2000’s +5.2% gain for Q2 and +8.1% year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Choice Equities Capital Management highlighted stocks like The Children’s Place, Inc. (NASDAQ:PLCE) in the second quarter 2023 investor letter. Headquartered in Secaucus, New Jersey, The Children’s Place, Inc. (NASDAQ:PLCE) is a children's specialty apparel retailer. On August 1, 2023, The Children’s Place, Inc. (NASDAQ:PLCE) stock closed at $31.99 per share. One-month return of The Children’s Place, Inc. (NASDAQ:PLCE) was 34.30%, and its shares lost 33.48% of their value over the last 52 weeks. The Children’s Place, Inc. (NASDAQ:PLCE) has a market capitalization of $399.133 million.
Choice Equities Capital Management made the following comment about The Children’s Place, Inc. (NASDAQ:PLCE) in its second quarter 2023 investor letter:
"The Children’s Place, Inc. (NASDAQ:PLCE) – Children’s Place has been suffering from high-cost inventory due to elevated cotton prices and higher than normal freight rates. These headwinds that have endured for much of the past two years have created depressed profit margins for this branded retailer of children’s apparel. Should normalized margins follow more normalized input pricing, one can envision the company again generating $150M of EBITDA or better, much like it has for nearly every year in the last 15, except for the last two.
Other recent cost-cutting initiatives like the reduced footprint at corporate headquarters suggest the company could in fact again surpass this baseline of $150M of EBITDA in future years as they have in the past. Today’s business performance metrics across multiple channels paint the picture of a healthy and growing business, albeit one with a temporarily impaired profitability profile. In a mildly optimistic but reasonably plausible case, recent share levels could show the company is currently trading at less than 2x normalized EPS. Longtime CEO Jane Elfers seems to agree the company is back on the right track after a difficult two years, and recently bought $1M worth of stock."
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The Children’s Place, Inc. (NASDAQ:PLCE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held The Children’s Place, Inc. (NASDAQ:PLCE) at the end of first quarter which was 17 in the previous quarter.
We discussed The Children’s Place, Inc. (NASDAQ:PLCE) in another article and shared the list of best short squeeze stocks to buy. In addition, please check out our hedge fund investor letters Q2 2023 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.
