Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund returned 3.36% compared to a 2.90% return for the Russell 2000 Value Index. Small value and small quality have outperformed over longer periods, although small caps have significantly underperformed over the past ten years. The firm focuses on the high-quality compounders in its portfolio. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like Arcadium Lithium plc (NYSE:ALTM) in the first quarter 2024 investor letter. Arcadium Lithium plc (NYSE:ALTM) produces lithium chemical products. Arcadium Lithium plc’s (NYSE:ALTM) one-month return was -8.32%, and its shares lost 15.35% of their value over the last three months. On June 4, 2024, Arcadium Lithium plc (NYSE:ALTM) stock closed at $4.19 per share with a market capitalization of $4.502 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Arcadium Lithium plc (NYSE:ALTM) in its first quarter 2024 investor letter:
“Arcadium Lithium plc (NYSE:ALTM) is an integrated, low-cost, well-managed lithium producer that was formed from the merger of Livent, which the Fund already owned, and Allkem in Australia. The merger was completed at the beginning of the year and we received, and decided to hold, shares of Arcadium.11 The share price is down due to volatile lithium prices that collapsed from bubbly levels at the beginning of 2023.12 Estimates for electric vehicle production are slowing and capacity got ahead of demand; the industry is now waiting for a supply response.
Arcadium is an unusual investment for us – we normally avoid the commodity and materials sectors and have kept our position in Arcadium small. But we believe Arcadium has a unique position in an industry with a strong long-term outlook. The company has low-cost production assets, is virtually debt-free, and has considerable capacity additions planned near-term.”
An assembly line of lithium-ion batteries for energy storage solutions with workers in the background.
Arcadium Lithium plc (NYSE:ALTM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Arcadium Lithium plc (NYSE:ALTM) at the end of the first quarter which was 0 in the previous quarter. Arcadium Lithium plc (NYSE:ALTM) had a strong start to the year, with a first quarter adjusted EBITDA of $109 million, revenue of $261 and adjusted earnings of $0.06 per diluted share. While we acknowledge the potential of Arcadium Lithium plc (NYSE:ALTM) 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 Arcadium Lithium plc (NYSE:ALTM) and shared the list of cheap lithium stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 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.
