Prosper Stars & Stripes Exited Helen of Troy Limited (HELE) After Achieving Solid Returns

Prosper Stars & Stripes, a long/short equity fund, recently released its second quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund underperformed and generated a net return of +9.6% compared to a total return of +8.5% for the long-only small-cap Russell 2000 Index (the “Russell”), and a total return of +5.0% for the long/short equity hedge fund peer group represented by the HFRX Equity Hedge Index (the “HFRX”). For the six months ended 2025, Prosper Stars & Stripes returned a net return of (0.8%) compared to (1.8%) for the Russell and +5.9% for the HFRI. The portfolio demonstrated strong outperformance relative to its net exposure during the quarter. In the second quarter of 2025, US equities reversed the declines seen in the first quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Prosper Stars & Stripes highlighted stocks such as Helen of Troy Limited (NASDAQ:HELE). Helen of Troy Limited (NASDAQ:HELE) offers a wide range of consumer products that operates in Home & Outdoor and Beauty & Wellness segments. The one-month return of Helen of Troy Limited (NASDAQ:HELE) was 13.82%, and its shares lost 54.01% of their value over the last 52 weeks.  On August 29, 2025, Helen of Troy Limited (NASDAQ:HELE) stock closed at $24.55 per share, with a market capitalization of $563.553 million.

Prosper Stars & Stripes stated the following regarding Helen of Troy Limited (NASDAQ:HELE) in its second quarter 2025 investor letter:

"Helen of Troy Limited (NASDAQ:HELE) was the largest contributor in our short book during the second quarter of 2025. The company is a consumer-packaged goods (“CPG”) firm with a diversified portfolio spanning categories such as Home & Outdoor and Beauty & Wellness. We have held a negative view of the company for some time, as we believe management was overly reliant on acquiring second-tier brands and was underinvesting in innovation. As consumers have become more price sensitive and selective with their spending, Helen of Troy’s brand strength deteriorated while leverage rose, an unfavorable combination. We successfully shorted HELE about a year ago, and our successful short during Q2 is an illustration of how our process allows us to reinvest with names from our focus lists. We previously noted that then-CEO Noel Geoffroy used the cautionary phrase “reset and revitalize” to describe the company’s status in Q2 2024. Geoffroy stepped down effective May 2, 2025, after approximately 14 months in the role, signaling continued fundamental pressure. After achieving solid returns, we exited our short position during the quarter."

Helen of Troy Limited (NASDAQ:HELE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Helen of Troy Limited (NASDAQ:HELE) at the end of the second quarter, which was 22 in the previous quarter. While we acknowledge the potential of Helen of Troy Limited (NASDAQ:HELE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Helen of Troy Limited (NASDAQ:HELE) and shared the list of undervalued defensive stocks to buy according to analysts. In its Q1 2025 investor letter, Prosper Stars & Stripes shared its concern about the potential impact of changing supply chains on Helen of Troy Limited (NASDAQ: HELE). In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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