Ariel Investments, an investment management company, released its “Ariel Global Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, global markets surpassed expectations, driven by U.S. tech companies and AI-themed stocks. However, Eurozone challenges, uncertainty over interest rates, and a strengthening U.S. dollar impacted MSCI ACWI and EAFE Indices. Against this backdrop, the Ariel Global fund traded -3.66% lower compared to the -0.99% return of its primary benchmark, the MSCI ACWI Index, and -4.71% return of its secondary benchmark, the MSCI ACWI Value Index. The fund returned +7.14% over the trailing one-year period compared to +17.49% and +10.76% returns for the indexes. Ariel follows a non-consensus approach to identify undervalued, out-of-favor franchises that are misunderstood and mispriced. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Ariel Global Fund emphasized stocks such as Capital One Financial Corporation (NYSE:COF). Capital One Financial Corporation (NYSE:COF) is a financial services holding company for the Capital One, National Association that offers various financial products and services. The one-month return of Capital One Financial Corporation (NYSE:COF) was -1.97%, and its shares gained 42.61% of their value over the last 52 weeks. On March 3, 2025, Capital One Financial Corporation (NYSE:COF) stock closed at $196.18 per share with a market capitalization of $76.475 billion.
Ariel Global Fund stated the following regarding Capital One Financial Corporation (NYSE:COF) in its Q4 2024 investor letter:
“Global financial services company, Capital One Financial Corporation (NYSE:COF) was another top performer during the period. Shares rallied following the U.S. election as investors believe the potential Discover Financial Services (DFS) acquisition is more likely to close. The new administration is expected to be more accommodative of bank mergers and acquisitions. In our view, the deal would produce significant long-term earnings accretion. COF will be able to leverage DFS’ proprietary payments network, enabling direct interaction with merchants and consumers. This closed loop dynamic should lead to higher volumes of credit card conversions boosting its shares. At current levels, we view the long-term outlook to be attractive, given favorable business trends, stabilizing delinquency rates within the credit card industry, upside from the DFS acquisition and COF’s enhanced focus on technology.”
A smiling face of a customer as they make a deposit at this company’s branch.
Capital One Financial Corporation (NYSE:COF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 89 hedge fund portfolios held Capital One Financial Corporation (NYSE:COF) at the end of the fourth quarter compared to 67 in the third quarter. In the fourth quarter, Capital One Financial Corporation (NYSE:COF) achieved earnings of $1.1 billion, which amounts to $2.67 per diluted common share. For the complete year, the company recorded total earnings of $4.8 billion, or $11.59 per share. While we acknowledge the potential of Capital One Financial Corporation (NYSE:COF) 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 Capital One Financial Corporation (NYSE:COF) and shared the list of stocks on Jim Cramer’s radar. 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.