Argosy Investors, an investment management company, released its Q1 2026 investor letter. A copy is available to download here. The letter discussed the current transformative investment landscape driven by the AI capex boom. The author expressed skepticism about the durability of the earnings flowing to its market participants and suppliers. The main challenge during capex booms is balancing supply and demand, especially the accelerated shift of AI technologies. While companies benefit from rising volumes and prices, the potential for earnings to be overstated becomes a concern if supply catches up quicker than anticipated. In this backdrop, the firm remains cautious in taking investment decisions. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Argosy Investors highlighted stocks such as Floor & Decor Holdings, Inc. (NYSE:FND). Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard surface flooring and related accessories. On June 5, 2026, Floor & Decor Holdings, Inc. (NYSE:FND) closed at $47.41 per share. One-month return of Floor & Decor Holdings, Inc. (NYSE:FND) was -2.77%, and its shares lost 36.46% over the past 52 weeks. Floor & Decor Holdings, Inc. (NYSE:FND) has a market capitalization of $5.12 billion.
Argosy Investors stated the following regarding Floor & Decor Holdings, Inc. (NYSE:FND) in its Q1 2026 investor letter:
“Finally, I added to Floor & Decor Holdings, Inc. (NYSE:FND). FND is really interesting to me because it’s been a stock market darling during COVID where it was assumed that they would get to their mature footprint of 500 stores (up from 270 at YE 2025) sooner than expected and achieve better store level sales and profit margins sooner as well. Of course, the high home sales activity during COVID has receded significantly, many of the company’s new stores appear ill-advised based on early sales results, and the achievability of the company’s long-term sales and EBIT margins seem in doubt. I could not disagree more. The company still continues to take share from legacy flooring providers and while the Home Depots and Lowe’s of the world have made competitive responses in flooring, they will never come close to the breadth and selection FND provides. I think it’s entirely possible the company generates $14B in sales a decade from now (up from $4.7B in 2025) and $1.4B net income (up from $209MM today). While the company has 108MM shares outstanding today, the company will begin to generate excess cash in the next few years, allowing for meaningful share repurchases, and while almost impossible to forecast avg. share prices over a decade, some reasonable math suggests shares outstanding could be ~85MM in a decade’s time if all excess cash is used on share repurchases. It’s not extremely difficult to see prices at multiples of today’s prices in a few years time, and with a slightly better macro environment.”
