Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Global markets in 2024 exceeded forecasts, primarily due to the overwhelming success of the “magnificent seven,” or mega-cap technology stocks. Despite the concentration of gains, the optimism was fueled by the U.S. election results, solid earnings growth, and a healthy labor market. Against this backdrop, the fund returned -0.53% in the fourth quarter compared to Russell Midcap Value Index’s -1.75% returns, and the Russell Midcap Index’s +0.62% gain. The fund traded +6.30% higher, over the trailing one-year period compared to +13.07% and +15.34% returns for the indexes. 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 Appreciation Fund emphasized stocks such as The Goldman Sachs Group, Inc. (NYSE:GS). Founded in 1869, The Goldman Sachs Group, Inc. (NYSE:GS) is a financial institution that operates through Global Banking & Markets, Asset & Wealth Management, and Platform Solutions segments. The one-month return of The Goldman Sachs Group, Inc. (NYSE:GS) was 10.25%, and its shares gained 65.38% of their value over the last 52 weeks. On February 4, 2025, The Goldman Sachs Group, Inc. (NYSE:GS) stock closed at $634.18 per share with a market capitalization of $198.315 billion.
Ariel Appreciation Fund stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its Q4 2024 investor letter:
Several stocks in the portfolio delivered solid returns in the quarter. Global investment bank, The Goldman Sachs Group, Inc. (NYSE:GS) outperformed on a robust quarterly earnings beat, highlighted by strength across its investment banking, trading and asset management segments. Meanwhile, the U.S. election has been widely viewed as a positive catalyst across the industry. Investors expect the incoming administration to 1 The “Magnificent Seven” are the largest stocks in the S&P 500 Index driving market performance: Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), NVIDIA Corp. (NVDA) and Tesla, Inc. (TSLA). 2 Hobson, Mellody and John W. Rogers Jr. “What the Stock market Taught Us This Year: Don’t Fall for These Investing Traps.” Wall Street Journal, 5 December 2023. emphasize deregulation and exhibit a greater openness to business combinations compared to the prior regime. Hence, management’s positive commentary around the operating momentum of its core franchises, an improving M&A outlook and the resilience of the U.S. economy sent shares higher.
A data analyst in front of multiple monitors, highlighting the power of data solutions.
The Goldman Sachs Group, Inc. (NYSE:GS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held The Goldman Sachs Group, Inc. (NYSE:GS) at the end of the third quarter which was 68 in the previous quarter. The Goldman Sachs Group, Inc. (NYSE:GS) reported net revenues of $13.9 billion EPS of $11.95, and ROE of 14.6% and an ROTE of 15.5% in the fourth quarter. While we acknowledge the potential of The Goldman Sachs Group, Inc. (NYSE:GS) 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 The Goldman Sachs Group, Inc. (NYSE:GS) and shared the list of best American bank stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.