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Here’s Why RH Landed in Polen Capital’s Detractor List

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Polen Capital, an investment management firm, published its “Polen Global SMID Company Growth” third quarter 2021 investor letter – a copy of which can be downloaded here. Over the fourth quarter of 2021, the Polen Global SMID Portfolio (the “Portfolio”) returned -1.28% gross and -1.76% net of fees, versus the 3.29% return for the MSCI ACWI SMID Capitalization Index (the “Index”). Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Polen Global SMID Company Growth Fund, in its Q4 2021 investor letter, mentioned RH (NYSE:RH) and discussed its stance on the firm. Founded in 1980, RH (NYSE:RH) is a Corte Madera, California-based home-furnishings company with a $6.9 billion market capitalization, and is currently spearheaded by its CEO, Gary G. Friedman. RH (NYSE:RH) delivered a -39.34% return since the beginning of the year, while its 12-month returns are down by -30.14%. The stock closed at $325.08 per share on March 11, 2022.

Here is what Polen Global SMID Company Growth Fund has to say about RH (NYSE:RH) in its Q4 2021 investor letter:

"Our most significant detractors from performance over the fourth quarter includes RH. Upscale home-furnishings company RH underperformed over the quarter and the year amid rising costs that weighed on expectations and heightened concerns of reduced discretionary spending amid the ongoing pandemic. We expect the company to grow revenues as it rolls out additional galleries across the globe and thoughtfully expands into adjacencies like guest homes and design services. Along with steady margin growth through fixedcost leverage, which the company has consistently shown it can achieve, we believe this expansion should lead to favorable cash earnings growth going forward."


Our calculations show that RH (NYSE:RH) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. RH (NYSE:RH) was in 58 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 57 funds in the previous quarter. RH (NYSE:RH) delivered a -42.69% return in the past 3 months.

In May 2021, we also shared another hedge fund’s views on RH (NYSE:RH) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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