Aristotle Capital Boston, LLC, an investment advisor, released its “Small Cap Equity Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The volatility that was seen in 2024 persisted into the fourth quarter. From style perspective, value companies underperformed their growth counterparts during the quarter, with the Russell 2000 Value Index returning -1.06% while the Russell 2000 Growth Index returned 1.70%. In the fourth quarter, the strategy delivered a return of -0.46% net of fees (-0.31% gross of fees) underperforming the Russell 2000 Index’s 0.33% total return. Security selection drove the underperformance of the strategy in the quarter. For more information on the fund’s best picks in 2024, please check its top five holdings.
Aristotle Small Cap Equity Strategy highlighted stocks like Acadia Healthcare Company, Inc. (NASDAQ:ACHC) in the Q4 2024 investor letter. Acadia Healthcare Company, Inc. (NASDAQ:ACHC) is a behavioral healthcare services company. The one-month return of Acadia Healthcare Company, Inc. (NASDAQ:ACHC) was 15.51%, and its shares lost 49.05% of their value over the last 52 weeks. On January 17, 2025, Acadia Healthcare Company, Inc. (NASDAQ:ACHC) stock closed at $43.78 per share with a market capitalization of $4.067 billion.
Aristotle Small Cap Equity Strategy stated the following regarding Acadia Healthcare Company, Inc. (NASDAQ:ACHC) in its Q4 2024 investor letter:
“Acadia Healthcare Company, Inc. (NASDAQ:ACHC), a behavioral healthcare and substance abuse treatment services company, continues to be impacted by the negative sentiment surrounding the news headlines related to patient care and questions about billing practices. While we take these developments seriously, we believe investors’ reaction to the news has been more severe than warranted. Industry peers have faced similar levels of scrutiny in the past with limited fundamental impact, and unless additional information is uncovered, we believe the current scrutiny will be resolved without much of an impact on their business. We continue to believe the company is well positioned to be an important part of the solution to an unfortunately growing need for behavioral health services.”
A healthcare professional discussing a treatment plan with a patient in an outpatient clinic.
Acadia Healthcare Company, Inc. (NASDAQ:ACHC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Acadia Healthcare Company, Inc. (NASDAQ:ACHC) at the end of the third quarter which was 35 in the previous quarter. While we acknowledge the potential of Acadia Healthcare Company, Inc. (NASDAQ:ACHC) 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 Acadia Healthcare Company, Inc. (NASDAQ:ACHC) and shared the list of oversold healthcare stocks to invest in. Acadia Healthcare Company, Inc. (NASDAQ:ACHC) detracted from the performance of Aristotle Small Cap Equity Strategy in the previous quarter due to negative news about patient care and billing practices. 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.