Potbelly Corporation (PBPB) Getting Back into Growth Mode with New Management

Next Century Growth Investors, LLC, an investment Management Company, released its “Micro-Cap Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2024, the market continued 2023 momentum. The strategy returned 6.75% (net of fees) compared to a 6.60% return for the Russell Microcap Growth Index. The strategy outperformed across most sectors but underperformed in health care.  In addition, please check the fund’s top five holdings to know its best picks in 2024.

Next Century Growth Investors Micro-Cap Strategy highlighted stocks like Potbelly Corporation (NASDAQ:PBPB), in the first quarter 2024 investor letter. Potbelly Corporation (NASDAQ:PBPB) owns and operates Potbelly sandwich restaurants. The one-month return of Potbelly Corporation (NASDAQ:PBPB) was -12.05%, and its shares lost 6.41% of their value over the last 52 weeks. On June 13, 2024, Potbelly Corporation (NASDAQ:PBPB) stock closed at $7.74 per share with a market capitalization of $230.973 million.

Next Century Growth Investors Micro-Cap Strategy stated the following regarding Potbelly Corporation (NASDAQ:PBPB) in its first quarter 2024 investor letter:

"Potbelly Corporation (NASDAQ:PBPB) is a fast casual sandwich shop with 430 stores in the US. The company has been around for nearly 50 years and has been public since 2013. The growth story was challenged for many years after going public. However, the company hired a new management team which has improved all facets of existing store operations and they are now getting back into store growth mode. Currently around 70 of the 430 stores are franchises and this will be the primary focus of store growth in the future. The company believes they can have >2,000 stores in the US with about 85% of stores under the franchise model."

A chef in a busy kitchen, adding the finishing touches to a signature sandwich.

Potbelly Corporation (NASDAQ:PBPB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Potbelly Corporation (NASDAQ:PBPB) at the end of the first quarter which was 10 in the previous quarter. Potbelly Corporation’s (NASDAQ:PBPB) first-quarter revenues decreased by approximately 6.0% to $111.2 million, mostly as a result of refranchising transaction from the previous year. While we acknowledge the potential of Potbelly Corporation (NASDAQ:PBPB) 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 Potbelly Corporation (NASDAQ:PBPB) and shared 180 Degree Capital Corp.'s views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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