Ariel Investments, an investment management company, released its “Ariel Focus Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund increased +7.45% and fell short of an +8.99% return for the Russell 1000 Value Index and a +10.56% return for the S&P 500 Index. Investor enthusiasm around artificial intelligence (AI), resilient corporate earnings growth, falling inflation, and expectations for interest rate cuts this year led the US indices to outperform in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Ariel Focus Fund highlighted stocks like Core Laboratories Inc. (NYSE:CLB), in the first quarter 2024 investor letter. Core Laboratories Inc. (NYSE:CLB) provides reservoir description and enhancement services and products to the energy industry. The one-month return of Core Laboratories Inc. (NYSE:CLB) was 1.21%, and its shares lost 20.96% of their value over the last 52 weeks. On June 10, 2024, Core Laboratories Inc. (NYSE:CLB) stock closed at $18.37 per share with a market capitalization of $857.225 million.
Ariel Focus Fund stated the following regarding Core Laboratories Inc. (NYSE:CLB) in its first quarter 2024 investor letter:
“Also in the quarter, we initiated a position in Core Laboratories Inc. (NYSE:CLB), which provides reservoir description and production enhancement services to the oil and gas industry. In response to a recently difficult operating environment amplified by geopolitical tensions, management announced prudent enhancements to an existing cost reduction plan, which help CLB achieve its free cash flow targets and reduce debt levels. Longer-term we expect current challenges will continue to abate allowing this asset light business to deliver modest growth in reservoir description. The market’s focus on near-term disruptions allowed us to initiate a position in Core Labs at a substantial discount to our calculation of the company’s private market value and an attractive multiple of forward earnings.”
A drilling rig manned by engineers and oil field workers preparing to explore a new petroleum reservoir.
Core Laboratories Inc. (NYSE:CLB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Core Laboratories Inc. (NYSE:CLB) at the end of the first quarter which was 14 in the previous quarter. The first quarter revenue of Core Laboratories N.V. (NYSE:CLB) was $129.6 million up slightly from $128.2 million in Q4 2023 and $128.4 million in Q1 2023. While we acknowledge the potential of Core Laboratories Inc. (NYSE:CLB) 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 Core Laboratories Inc. (NYSE:CLB) and shared Ariel Fund’s views on the company. 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.
