Is Ollie's Bargain Outlet Holdings (OLLI) a Sound Investment?

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 11.28% (gross) and 11.02% (net), compared to the Russell 2000 Growth Index by 11.97%. Equities posted double-digit returns in the second quarter as global economic activity measures lifted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, TimesSquare Capital Small Cap Growth Strategy highlighted stocks such as Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI). Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) is a US-based retailer of closeout merchandise and excess inventory. The one-month return of Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) was -1.65%, and its shares gained 32.16% of their value over the last 52 weeks. On September 10, 2025, Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) stock closed at $129.73 per share, with a market capitalization of $7.954 billion.

TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) in its second quarter 2025 investor letter:

"New to the sector this quarter was Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI). They are engaged in the retail of closeouts, excess inventory, and salvage merchandise. They subsequently reported results that were better than expected. Same store sales comparisons were quite favorable. Ollie’s acquired numerous locations that were formerly Big Lots stores, and they are opening ahead of plan."

Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) at the end of the second quarter, which was 25 in the previous quarter. While we acknowledge the potential of Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) 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 Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) and shared the list of stocks that Jim Cramer recently discussed. 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.