Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. News of declining inflation and the potential for lower interest rates in 2024 fueled optimism in the final months of the year. Equities saw a broad rally, with small caps surging over 14% and large caps adding to yearly gains, resulting in a 12% return for the quarter. In the quarter, the fund appreciated 8.96% (net), trailing its benchmark, the S&P 500 Index, which returned 11.69%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Meridian Hedged Equity Fund featured stocks like Allegro MicroSystems, Inc. (NASDAQ:ALGM) in the fourth quarter 2023 investor letter. Headquartered in Manchester, New Hampshire, Allegro MicroSystems, Inc. (NASDAQ:ALGM) manufactures and markets sensor integrated circuits (ICs) and application-specific analog power ICs. On April 2, 2024, Allegro MicroSystems, Inc. (NASDAQ:ALGM) stock closed at $25.68 per share. One-month return of Allegro MicroSystems, Inc. (NASDAQ:ALGM) was -15.97%, and its shares lost 43.70% of their value over the last 52 weeks. Allegro MicroSystems, Inc. (NASDAQ:ALGM) has a market capitalization of $4.959 billion.
Meridian Hedged Equity Fund stated the following regarding Allegro MicroSystems, Inc. (NASDAQ:ALGM) in its fourth quarter 2023 investor letter:
“Allegro MicroSystems, Inc. (NASDAQ:ALGM) is a semiconductor company that provides sensor and power integrated circuits for the automotive and industrial markets. The company’s energy-efficient systems provide functionality such as measuring motion, speed, and regulating system voltages. The stock fell in the quarter due to weaker than expected guidance and ongoing inventory corrections weighing on near-term demand. The company continues to see strong traction in its e-mobility business targeting electric and autonomous vehicles, which accounted for 50% of automotive revenue and two-thirds of total design wins in the most recent quarter. However, the dual effects of the UAW strike and its customers’ rebalancing of inventory levels caused automotive revenue to decline. Additional weakness is expected in the industrial and consumer markets as customers digest elevated inventory levels built over the past year. While the long-term outlook remains positive in our view, the weaker near-term trends and uncertainty around the pace of recovery have weighed on the stock. As long-term investors, we have experience with cycles and have confidence that the near-term inventory corrections will resolve. As such, we maintained long exposure to the shares.”
A technician operating a robotic arm on a production line of semiconductor chips.
Allegro MicroSystems, Inc. (NASDAQ:ALGM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Allegro MicroSystems, Inc. (NASDAQ:ALGM) was held by 27 hedge fund portfolios, compared to 24 in the previous quarter, according to our database.
We discussed Allegro MicroSystems, Inc. (NASDAQ:ALGM) in another article and shared the list of undervalued semiconductor stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2023 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.
