Brennan Asset Management, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. Approximately half of the US was thrilled with the election result, and the equilibrium felt catatonic. At first, the markets surged, mostly due to expectations of tax extensions and maybe regulatory relief. The largest winners were some of the more speculative segments of the market, including Tesla stock, investments with an artificial intelligence theme, “normal” cryptocurrency, Dogecoin and other weird/”less normal” cryptocurrencies. This relief rally stalled following the Federal Reserve’s December meeting, which indicated fewer rate cuts in 2025. Meanwhile, markets outside the US continue to trade at extreme discounts, as do value equities to their growth counterparts. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
In its fourth quarter 2024 investor letter, Brennan Asset Management emphasized stocks such as Liberty Latin America Ltd. (NASDAQ:LILAK). Liberty Latin America Ltd. (NASDAQ:LILAK) offers fixed, mobile, and subsea telecommunications services that operate through C&W Caribbean, C&W Panama, Liberty Networks, Liberty Puerto Rico, and Liberty Costa Rico segments. The one-month return of Liberty Latin America Ltd. (NASDAQ:LILAK) was 11.55%, and its shares gained 8.10% of their value over the last 52 weeks. On February 12, 2025, Liberty Latin America Ltd. (NASDAQ:LILAK) stock closed at $7.34 per share with a market capitalization of $1.44 billion.
Brennan Asset Management stated the following regarding Liberty Latin America Ltd. (NASDAQ:LILAK) in its Q4 2024 investor letter:
“We have discussed Liberty Latin America Ltd. (NASDAQ:LILAK) multiple times in past letters. Unfortunately, the investment has not played out as expected. In our 2024 first-quarter letter, we noted that we sent a letter to LILAK’s CEO and CFO and spoke with them following 2023 fourth-quarter results. In our first-quarter letter, we made the following comment:
While the valuation and insider purchases are certainly positive, investors need to see further signs of execution. Specifically, LILAK needs to hit/exceed Puerto Rican synergy targets and deliver the run-rate free cash flow that it discussed on its last earnings call. We also believe that LILAK’s management team needs to decisively allocate capital.
Unfortunately, our confidence ebbed with each passing quarter as LILAK’s management team consistently delayed Puerto Rico integration deadlines and continued to lose mobile customers. Despite the delayed deadlines, LILAK’s team assured investors (publicly and privately) that it would hit EBITDA guidance in Puerto Rico. These assurances sounded credible as this same management team had turned around a challenging acquisition of Cable & Wireless (a deal that the team was not involved with) and ultimately brought margins to levels above our projections. Based on these assurances, as well as the prospect for significantly higher free cash flow and repurchases, LILAK’s stock rallied from a depressed base for roughly the first nine months of the year. We meaningfully reduced our position size throughout the year, but we did not fully exit the position given the continued disconnect between LILAK’s asset value and market price. At least short-term, this was a mistake…” (Click here to read the full text)
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Liberty Latin America Ltd. (NASDAQ:LILAK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Liberty Latin America Ltd. (NASDAQ:LILAK) at the end of the third quarter which was 23 in the previous quarter. While we acknowledge the potential of Liberty Latin America Ltd. (NASDAQ:LILAK) 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 addition, please check out our hedge fund investor letters Q3 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.