Does Bath & Body Works (BBWI) Have Potential for Rapid Growth?

Core Viewpoint - American Century Investments Small Cap Value Fund reported a strong performance in the third quarter of 2025, with equities rising and the US Federal Reserve reducing interest rates for the first time this year [1] Fund Performance - The investor class of the fund returned 4.69% in the third quarter, while the Russell 2000 Value Index returned 12.60% [1] Company Focus: Bath & Body Works, Inc. - Bath & Body Works, Inc. (NYSE:BBWI) was highlighted as a key investment, with a one-month return of 5.55% but a significant decline of 43.26% over the last 52 weeks [2] - As of January 2, 2026, Bath & Body Works, Inc. shares closed at $20.74, with a market capitalization of $4.276 billion [2] Investment Rationale - The fund initiated a position in Bath & Body Works, Inc. due to its high margins and potential for rapid growth, believing that the company's low valuation is temporary [3] - Strong free cash flows are expected to mitigate risks while waiting for strategic initiatives to take effect [3] Hedge Fund Interest - Bath & Body Works, Inc. was held by 49 hedge fund portfolios at the end of the third quarter, a decrease from 56 in the previous quarter [4] - While the company shows potential, the fund suggests that certain AI stocks may offer greater upside potential with less downside risk [4]