Ariel Investments, an investment management company, released its “Ariel Global Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Ariel Global fund appreciated +7.35% lagging behind the +8.20% gain of its primary benchmark, the MSCI ACWI Index, but ahead of the +6.85% return of its secondary benchmark, the MSCI ACWI Value Index. The upward rally of developed markets continued in the first quarter of 2024. The rally was driven by investors’ excitement over artificial intelligence (AI), a rebound in bank lending growth, decreased energy costs, a rise in global manufacturing activity, recent structural reforms in Japan, and the near-term possibility of a rate-cutting cycle in the U.S. and Europe. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Ariel Global Fund highlighted stocks like Stellantis N.V. (NYSE:STLA), in the first quarter 2024 investor letter. Stellantis N.V. (NYSE:STLA) is an automotive manufacturer. The one-month return of Stellantis N.V. (NYSE:STLA) was -10.50%, and its shares gained 16.55% of their value over the last 52 weeks. On June 14, 2024, Stellantis N.V. (NYSE:STLA) stock closed at $20.21 per share with a market capitalization of $63.311 billion.
Ariel Global Fund stated the following regarding Stellantis N.V. (NYSE:STLA) in its first quarter 2024 investor letter:
“We added multinational automotive manufacturing company, Stellantis N.V. (NYSE:STLA), which was formed from the merger of Fiat Chrysler Automobiles and the French PSA Group in the period. With deal synergies lowering overall operating expenses and contributing to healthy free cash flow generation, management has begun increasing shareholder returns through dividends and share buybacks. Although some investors remain on the sidelines over concerns auto sales and margins have peaked, STLA’s average transaction price is growing year-over-year. We think this momentum will continue and expect STLA to deliver double-digit operating profit margin as it further expands its leading position in the Middle East and South America. Furthermore, the company’s Leapmotor joint venture presents a unique way to benefit from the strengths of Chinese original equipment manufacturers. Meanwhile, in the current electric vehicle slowdown environment, we believe STLA is best positioned to weather the storm. Management believes it can maintain profitability and is open to rationalizing its 14 brands. STLA seeks to be number one in the commercial vehicle segment by 2027, which comes with high customer stickiness, solid profitability and recurring revenue streams.”
A close-up view of a modern automobile with its sleek curves and luxurious body.
Stellantis N.V. (NYSE:STLA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Stellantis N.V. (NYSE:STLA) at the end of the first quarter which was 33 in the previous quarter. Stellantis N.V. (NYSE:STLA) saw a year-over-year fall in revenue in the first quarter. (See the details here). While we acknowledge the potential of Stellantis N.V. (NYSE:STLA) 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 Stellantis N.V. (NYSE:STLA) and shared Bill Miller’s latest stock picks. In addition, please check out our hedge fund investor letters Q1 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.