In This Article:
Brown Capital Management, an investment management company, released its “The Brown Capital Management Mid Company Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The Mid Company Fund (Institutional shares) returned -7.85 % in the quarter significantly underperforming -3.21% return for the Russell Midcap Growth Index. The strategy focuses on EGCs with strong revenue growth, competitive advantages, and differentiated products that save time, and money or deliver significant value to consumers. In addition, check the fund’s top five holdings to know its best picks in 2024.
Brown Capital Management Mid Company Fund highlighted stocks like Five9, Inc. (NASDAQ:FIVN), in the second quarter 2024 investor letter. Five9, Inc. (NASDAQ:FIVN) provides intelligent cloud software for contact centers. The one-month return of Five9, Inc. (NASDAQ:FIVN) was -8.36%, and its shares lost 58.15% of their value over the last 52 weeks. On September 6, 2024, Five9, Inc. (NASDAQ:FIVN) stock closed at $28.61 per share with a market capitalization of $2.211 billion.
Brown Capital Management Mid Company Fund stated the following regarding Five9, Inc. (NASDAQ:FIVN) in its Q2 2024 investor letter:
"Five9, Inc. (NASDAQ:FIVN) is a leader in cloud-based contact-center software, which serves as the routing engine to connect callers to agents. With the growth of e-commerce, consumers are making fewer in-person visits to stores but contacting companies more frequently, driving the need for world-class contact-center software solutions like Five9’s. It has been a tough couple of years for Five9’s stock and this quarter provided no relief. Competitive concerns, questions about AI’s long-term impact on the business and deteriorating macroeconomic conditions have all cast clouds over the company’s stock. Five9’s consumer segment, one of its largest divisions, has really struggled of late as clients hire fewer call-center agents, pressuring Five9’s seat-based revenue model. Total revenue growth decelerated to 13% year-over-year in the most recent quarter, down from 28% and 17% in 2022 and 2023, respectively. Moreover, management guided to 16% for the full year 2024, which some consider optimistic given the weak start to the year. These worsening sales trends further weighed on shares during the quarter.