Earnings Miss and Reduced Guidance Dragged Gentex Corporation (GNTX) in Q3

Ariel Investments, an investment management company, released its “Ariel Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. Due to the economy’s resilience and forecasters’ expectations of a soft landing, all major U.S. indices saw gains in the third quarter. The Federal Reserve turned its attention to the state of the labor market as interest rate reduction was implemented. Against this backdrop, Ariel Fund appreciated +12.08% in Q3 outperforming both the Russell 2500 Value and Russell 2500 indices, which returned +9.63% and +8.75%. For more information on the fund’s top picks in 2024, please check its top five holdings.

Ariel Fund highlighted stocks like Gentex Corporation (NASDAQ:GNTX), in the third quarter 2024 investor letter. Gentex Corporation (NASDAQ:GNTX) develops and manufacturers digital vision, connected cars, dimmable glass, and fire protection products. The one-month return of Gentex Corporation (NASDAQ:GNTX) was 0.20%, and its shares lost 5.47% of their value over the last 52 weeks. On October 14, 2024, Gentex Corporation (NASDAQ:GNTX) stock closed at $29.55 per share with a market capitalization of $6.803 billion.

Ariel Fund stated the following regarding Gentex Corporation (NASDAQ:GNTX) in its Q3 2024 investor letter:

“Leading supplier of automatic-dimming mirrors for the automotive industry, Gentex Corporation (NASDAQ:GNTX) weighed on quarterly returns following an earnings miss and subsequent reduction in full year guidance. Weakness in auto-production volumes negatively affected mirror shipments with several customers unexpectedly reducing their order. The current valuation fully reflects these affordability-related headwinds, which should begin to ease with declining interest rates. Longer term, GNTX is a high-quality niche franchise with solid growth prospects, as the market increasingly adopts its essential and next-generation technologies, like Full Display Mirror. GNTX has a long history of technological innovation and manufacturing capability, while consistently earning best-in-class operating margins and generating attractive free cash flow.”

A technician working on an automotive electronic, showcasing the company’s dedication to innovation.

Gentex Corporation (NASDAQ:GNTX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Gentex Corporation (NASDAQ:GNTX) at the end of the second quarter which was 30 in the previous quarter. In Q2 2024 Gentex Corporation (NASDAQ:GNTX) generated net sales of $572.9 million compared to $583.5 million in Q2 2023. While we acknowledge the potential of Gentex Corporation (NASDAQ:GNTX) 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 Gentex Corporation (NASDAQ:GNTX) and shared top stocks to buy and sell from Jim Cramer’s latest portfolio. 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.