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Should You be Confident in Your Investment in ESAB Corporation (ESAB)?

Soumya Eswaran
·2-min read

Alphyn Capital Management, an investment management firm, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned -2.7% net in the second quarter compared to 4.3% for the S&P500 Index. As of June 30, 2024, the top ten holdings accounted for approximately 66% of the portfolio, and approximately 16% of the portfolio was held in cash. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Alphyn Capital Management highlighted stocks like ESAB Corporation (NYSE:ESAB), in the second quarter 2024 investor letter. ESAB Corporation (NYSE:ESAB) is a fabrication technology and gas control solutions company. The one-month return of ESAB Corporation (NYSE:ESAB) was -3.32%, and its shares gained 34.83% of their value over the last 52 weeks. On July 10, 2024, ESAB Corporation (NYSE:ESAB) stock closed at $93.18 per share with a market capitalization of $5.63 billion.

Alphyn Capital Management stated the following regarding ESAB Corporation (NYSE:ESAB) in its Q2 2024 investor letter:

"I remain confident in ESAB Corporation's (NYSE:ESAB) long-term prospects. Since its spin-out from Colfax, the position has generated a significant return of approximately 1.9x. The recent share price weakness is primarily driven by broader market factors impacting industrial stocks since May. ESAB’s key competitors in the welding oligopoly, Lincoln Electric, and Illinois Tool Works, have also experienced similar share price declines. However, as highlighted earlier, I closely monitor performance to mitigate potential downside risk and guard against round-tripping returns."

A welder wearing protective gear and goggles, completing a welding job in a modern factory.

ESAB Corporation (NYSE:ESAB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held ESAB Corporation (NYSE:ESAB) at the end of the first quarter which was 23 in the previous quarter. While we acknowledge the potential of ESAB Corporation (NYSE:ESAB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed ESAB Corporation (NYSE:ESAB) in another article and shared TimesSquare Capital U.S. Small Cap Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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