Meridian Funds, managed by ArrowMark Partners, released its “Meridian Small Cap Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. election results, inflation, and interest rate direction influenced markets in the quarter.  This led 7.1% gain in large cap growth stocks, resulting in 33.4% annual gains. Small cap growth stocks initially surged post-election, but US Federal Reserve's measured approach to rate cuts in 2025 and strong economic data reversed these gains. The market's initial optimism had given way to a more cautious perspective by the end of the year. The fund returned 2.85% (net) in the fourth quarter compared to the Russell 2000 Growth Index’s 1.70% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.

In its fourth quarter 2024 investor letter, Meridian Small Cap Growth Fund emphasized stocks such as Turning Point Brands, Inc. (NYSE:TPB). Headquartered in Louisville, Kentucky, Turning Point Brands, Inc. (NYSE:TPB) manufactures, markets, and distributes branded consumer products. The one-month return of Turning Point Brands, Inc. (NYSE:TPB) was -14.41%, and its shares gained 115.23% of their value over the last 52 weeks. On March 10, 2025, Turning Point Brands, Inc. (NYSE:TPB) stock closed at $58.52 per share with a market capitalization of $1.039 billion.

Meridian Small Cap Growth Fund stated the following regarding Turning Point Brands, Inc. (NYSE:TPB) in its Q4 2024 investor letter:

"Turning Point Brands, Inc. (NYSE:TPB), a producer of branded consumer products including alternative smoking accessories, performed well during the quarter due to solid core business execution. Management provided positive guidance and introduced new metrics highlighting growth in its tobacco-free nicotine pouches, a promising segment gaining market share. We reduced our position during the quarter as the price strengthened."

A worker athlete with a rolling paper held in hand, smoking from the finished cigar.

Turning Point Brands, Inc. (NYSE:TPB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Turning Point Brands, Inc. (NYSE:TPB) at the end of the fourth quarter compared to 20 in the third quarter. Turning Point Brands, Inc.'s (NYSE:TPB) revenue increased 13% to $93.7 million in the fourth quarter. While we acknowledge the potential of Turning Point Brands, Inc. (NYSE:TPB) 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 Turning Point Brands, Inc. (NYSE:TPB) and shared the list of Maran Capital Management's views on the company. Turning Point Brands, Inc. (NYSE:TPB) contributed to Meridian Small Cap Growth Fund's performance in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.