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 CVS Health Corporation (NYSE:CVS). CVS Health Corporation (NYSE:CVS) is a US-based health solutions provider. The one-month return of CVS Health Corporation (NYSE:CVS) was 15.17%, and its shares lost 11.95% of their value over the last 52 weeks. On March 3, 2025, CVS Health Corporation (NYSE:CVS) stock closed at $64.90 per share with a market capitalization of $82.859 billion.
Ariel Global Fund stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q4 2024 investor letter:
“Lastly, American healthcare company, CVS Health Corporation (NYSE:CVS) underperformed in the period. The company preannounced a third-quarter preliminary profit estimate materially below consensus expectations and pulled its 2024 guidance due to continued medical cost pressures. Investor concerns around the recently proposed Pharmacy Benefit Management (PBM) legislation further weighed on shares. Despite these challenges, management reiterated its focus on improving margins and enhancing its positioning in Medicare Advantage (MA). CVS believes the program can remain an attractive business for Aetna and CVS Health over time as it implements a multi-year repricing strategy across plan level benefits. Meanwhile, CVS continues to take actions to drive long-term success including the appointment of longtime company executive David Joyner as President and CEO as well as adding four new board members.”
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
CVS Health Corporation (NYSE:CVS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held CVS Health Corporation (NYSE:CVS) at the end of the fourth quarter compared to 63 in the third quarter. CVS Health Corporation’s (NYSE:CVS) revenues for the fourth quarter reached $98 billion, marking an increase of over 4% compared to Q4 2023. This growth was mainly fueled by advancements in its healthcare benefits sector, as well as in pharmacy and consumer wellness divisions. While we acknowledge the potential of CVS Health Corporation (NYSE:CVS) 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 CVS Health Corporation (NYSE:CVS) and shared the list of best performing healthcare stocks so far in 2025. 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.