The Wasatch Small Cap Growth Strategy Sold Neogen Corp. in Q1: Here’s Why

Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, the strategy gained but underperformed the benchmark, the Russell 2000 Growth Index which rose 7.58%. The broader Russell 2000 Index increased 5.18% during the same period. Holdings in health care and consumer staples—and lack of exposure in materials, utilities, and communication services- contributed to the relative performance of the strategy, while holdings in information technology, consumer discretionary, and industrials detracted. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Wasatch Small Cap Growth Strategy highlighted stocks like Neogen Corporation (NASDAQ:NEOG), in the first quarter 2024 investor letter. Neogen Corporation (NASDAQ:NEOG) develops, manufactures, and markets various products and services dedicated to food and animal safety. The one-month return of Neogen Corporation (NASDAQ:NEOG) was 26.59%, and its shares lost 15.97% of their value over the last 52 weeks. On June 10, 2024, Neogen Corporation (NASDAQ:NEOG) stock closed at $16.57 per share with a market capitalization of $3.589 billion.

Wasatch Small Cap Growth Strategy stated the following regarding Neogen Corporation (NASDAQ:NEOG) in its first quarter 2024 investor letter:

"Among our sells, we exited Neogen Corporation (NASDAQ:NEOG), which offers diagnostic test kits and other products for food and animal safety. We had initially been optimistic regarding an acquisition the company made in 2022. And that optimism had seemed justified by some business synergies realized in 2023. More recently, however, we concluded that progress on additional synergies has stalled and that Neogen’s organic growth is likely to be lower than we had initially expected."

A research laboratory showing advanced diagnostic equipment used to protect public health.

Neogen Corporation (NASDAQ:NEOG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Neogen Corporation (NASDAQ:NEOG) at the end of the first quarter which was 17 in the previous quarter.  Neogen Corporation’s (NASDAQ:NEOG) latest quarter revenues were $229 million, according to a recent earnings call. While we acknowledge the potential of Neogen Corporation (NASDAQ:NEOG) 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.

In another article, we discussed Neogen Corporation (NASDAQ:NEOG) and shared Alger Small Cap Growth Fund's views on the company. Baron Small Cap Fund increased its stake in Neogen Corporation (NASDAQ:NEOG) recognizing its growth potential in the first quarter 2024. In addition, please check out our hedge fund investor letters Q1 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.