Atai Capital Management, an investment management firm, recently released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 3.1% in the fourth quarter net of all fees brining the full year returns to 7.7% net of all fees. This is compared to a 25% total return for the S&P 500, an 11.5% total return for the Russell 2000, and a 13.7% total return for the Russell Microcap for the year. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Atai Capital Management emphasized stocks such as AstroNova, Inc. (NASDAQ:ALOT). AstroNova, Inc. (NASDAQ:ALOT) develops and manufactures specialty printers and data acquisition and analysis systems. The one-month return of AstroNova, Inc. (NASDAQ:ALOT) was -3.00%, and its shares lost 31.24% of their value over the last 52 weeks. On February 18, 2025, AstroNova, Inc. (NASDAQ:ALOT) stock closed at $11.95 per share with a market capitalization of $89.97 million.
Atai Capital Management stated the following regarding AstroNova, Inc. (NASDAQ:ALOT) in its Q4 2024 investor letter:
“AstroNova, Inc. (NASDAQ:ALOT) has often been our largest position since inception and one that I have discussed at length in prior letters. As a recap, the thesis hinged on a return to normalized earnings in both their test and measurement segment (tied to narrowbody aircraft production) and their production identification segment (temporary ink/supplier/retrofit issues). Since our original purchase in January 2023, the business has performed as expected. At the end of their fiscal Q2-2024, the company (before Boeing strikes and shipment delays at PID, so a “semi-normal” quarter) was doing north of $21M in run-rate EBITDA – this compares to just $11M at the time of our original purchase. However, while the business has performed well, management’s poor capital allocation has cost us and taken away a good amount of our upside, for now at least.
In May 2024, AstroNova announced their $20M acquisition of MTEX, which we covered in our Q2- 2024 letter. At that time, it appeared that MTEX was a decent-to-great use of capital; it had high EBITDA margins (20%+), double-digit topline growth, some synergies, and perhaps most importantly, new technology that AstroNova’s legacy products could benefit from. Meanwhile, it also appeared they had paid around 10x 2024 EBITDA for the business, not bad…” (Click here to read the full text)
A technician editing complex data acquisition systems in an analytical workspace.
AstroNova, Inc. (NASDAQ:ALOT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 3 hedge fund portfolios held AstroNova, Inc. (NASDAQ:ALOT) at the end of the third quarter which was 3 in the previous quarter. In the fiscal third quarter of 2025, AstroNova, Inc. (NASDAQ:ALOT) reported $40.4 million in revenues, up 7.7% from the prior year’s quarter. While we acknowledge the potential of AstroNova, Inc. (NASDAQ:ALOT) 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 AstroNova, Inc. (NASDAQ:ALOT) and shared Atai Capital Management’s views on the company in the previous quarter. 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.
