Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. Federal Reserve, “Fed”, reduced interest rates by 0.5% on September 18, offering much-needed relief to investors. This key decision aimed to stabilize the markets following a turbulent August filled with worries about declining job market indicators. Against this backdrop, the fund returned 6.85% (net) during the quarter underperforming the 8.75% returns of the Russell 2500 Index and 9.63% returns of the secondary benchmark the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Contrarian Fund highlighted stocks like Cars.com Inc. (NYSE:CARS), in the third quarter 2024 investor letter. Cars.com Inc. (NYSE:CARS) is a US-based audience-driven technology company, that provides solutions for the automotive industry. The one-month return of Cars.com Inc. (NYSE:CARS) was 23.13%, and its shares gained 5.24% of their value over the last 52 weeks. On November 27, 2024, Cars.com Inc. (NYSE:CARS) stock closed at $19.70 per share with a market capitalization of $1.275 billion.
Meridian Contrarian Fund stated the following regarding Cars.com Inc. (NYSE:CARS) in its Q3 2024 investor letter:
“Cars.com Inc. (NYSE:CARS) operates the second-largest digital marketplace for North American car dealerships and provides marketing solutions to enhance dealer operations. Having evolved from a legacy newspaper advertising business, Cars.com now offers in-depth automotive news and reviews, e-commerce sales that enhance the customer experience, and solutions to help dealers more efficiently acquire used vehicles. We view Cars.com as a key enabler of digital sales adoption within the fragmented auto dealer industry. This quarter, the company lowered its guidance following a cyberattack that disrupted operations for several weeks. Additionally, a reassessment of its go-to-market strategy for its dealer used car acquisition service impacted results. We had reduced our position before the 15% quarterly decline but continue to hold shares, remaining optimistic about future earnings growth and the company’s attractive valuation.”
A luxury car dealership’s showroom, representing the automotive industry the company operates in.
Cars.com Inc. (NYSE:CARS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Cars.com Inc. (NYSE:CARS) at the end of the third quarter which was 17 in the previous quarter. While we acknowledge the potential of Cars.com Inc. (NYSE:CARS) 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 Cars.com Inc. (NYSE:CARS) and shared the list of most undervalued auto stocks to buy according to analysts and the latest updates around the industry. 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.