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Here’s Why Carter’s Inc. (CRI) Landed in Diamond Hill’s Bottom Contributor List

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·3 min read
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  • DHIL
  • CRI
  • ^GSPC

Diamond Hill Capital, an investment management firm, published its "Diamond Hill Small Cap Fund" first quarter 2021 investor letter – a copy of which can be downloaded here. The portfolio outpaced the Russell 2000® Index in the quarter with positive absolute results across all sectors. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Diamond Hill Capital, in its Q1 2021 investor letter, mentioned Carter's, Inc. (NYSE: CRI), and shared their insights on the company. Carter's, Inc. is an Atlanta, Georgia-based apparel company that currently has a $4.4 billion market capitalization. Since the beginning of the year, CRI delivered a 7.61% return, extending its 12-month gains to 24.18%. As of May 21, 2021, the stock closed at $101.23 per share.

Here is what Diamond Hill Capital has to say about Carter's, Inc. in its Q1 2021 investor letter:

"Carter’s, which sells baby clothes under brands like Carter’s and OshKosh, was another bottom contributor. Carter’s stock slumped in Q1 when forward guidance did not meet investors’ expectations and management outlined a lower long-term margin profile than previously communicated. In our view, Carter’s is the market-share leader in infant and baby apparel with strong brand recognition across both its wholesale platform and omni-channel retail presence. This competitive position should enable Carter’s to transition and thrive in the more digitally driven environment of our future."

Clothes
Clothes

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Our calculations show that Carter's, Inc. (NYSE: CRI) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Carter's, Inc. was in 27 hedge fund portfolios, compared to 25 funds in the third quarter. CRI delivered a 9.39% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.