River Road Asset Management, an investment management company released its “River Road Large Cap Value Select Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Large Cap Value Select Fund returned 0.43% compared to (1.98%) return for the Russell 1000® Value Index. For the year 2024, the fund returned 24.59% significantly outperforming Index return of 14.37%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, River Road Large Cap Value Select Fund emphasized stocks such as CSX Corporation (NASDAQ:CSX). CSX Corporation (NASDAQ:CSX) is a company that offers rail-based freight transportation services. The one-month return of CSX Corporation (NASDAQ:CSX) was -6.53%, and its shares lost 19.29% of their value over the last 52 weeks. On March 27, 2025, CSX Corporation (NASDAQ:CSX) stock closed at $29.92 per share with a market capitalization of $56.392 billion.
River Road Large Cap Value Select Fund stated the following regarding CSX Corporation (NASDAQ:CSX) in its Q4 2024 investor letter:
“As of December 31, the portfolio held 29 positions, up four positions from Q3. During Q4, the largest sector increase was 736 bps within industrials, while the largest decrease was -276 bps within consumer discretionary. We established five new positions and eliminated one position
We also initiated a position in CSX Corporation (NASDAQ:CSX), 2.5 conviction), the largest Class 1 railroad on the transcontinental freight rail lines in the Eastern U.S. with access to two-thirds of the U.S. population. The company operates within a duopoly market structure on the east coast characterized by substantial barriers to entry, primarily due to its non-replicable and highly dense network infrastructure. This dynamic position has enabled CSX to demonstrate robust pricing power resulting in significant margin expansion of over 2,000 bps since 2007. CSX may benefit from several tailwinds including the anticipated growth in merchandise carload volumes, the ongoing trend of onshoring, and the potential recovery in the truck market, which is expected to bolster CSX’s intermodal business segment. If volumes improve, future return could be even better. While the railroad industry is capital intensive, CSX generates substantial free cash flow that can potentially be used to support significant capital returns. Since 2007, CSX has repurchased 45% of its outstanding shares and consistently increased its dividend at a CAGR of 13%.”
A freight train moving through a rural landscape, its engine and numerous rail cars carrying the company’s cargo.
CSX Corporation (NASDAQ:CSX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held CSX Corporation (NASDAQ:CSX) at the end of the fourth quarter compared to 51 in the third quarter. While we acknowledge the potential of CSX Corporation (NASDAQ:CSX) 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.
We covered CSX Corporation (NASDAQ:CSX) in another article, where we shared the list of best affordable stocks to buy according to hedge funds. 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.