8. Arrow Electronics, Inc. (NYSE:ARW)
Number of Hedge Fund Holders as of Q3: 28
Greenhaven Associates’ Equity Stake: $215.48 Million
Arrow Electronics, Inc. (NYSE:ARW) originated in 1935 as Arrow Radio, a Manhattan-based retail store founded by Maurice Goldberg that sold used radios and components. By the 1940s, the business expanded into brand-new radio and home entertainment products, establishing franchises with RCA and Cornell Dubilier. Eventually, it was formally incorporated as Arrow Electronics, Inc. in 1946.
Presently a Fortune 500 company based in Centennial, Colorado, Arrow Electronics, Inc. (NYSE:ARW) is a leading distributor of electronic components and enterprise computing solutions. The company provides supply chain and value-added services to original equipment manufacturers, contract manufacturers, value-added resellers, and managed service providers. On the 2024 Fortune 500 list, Arrow Electronics was ranked 133rd based on total revenue. Moreover, Arrow Electronics has consistently maintained a strong industry position and is famous for being on Fortune’s “World’s Most Admired Companies” list for 12 consecutive years.
Arrow Electronics, Inc. (NYSE:ARW) announced its Q4 revenue of $7.28 billion which, although lower than the $7.85 billion revenue for the same quarter in 2023, surpassed estimates of $7.06 billion by 3.17%. The company’s non-GAAP EPS was announced as $2.94, surpassing estimates of $2.68 by almost 11%. In the Q4 2024 earnings call, CEO Sean Kerins emphasized that, through the semiconductor industry correction and a shifting market landscape, Arrow Electronics has managed to expand its product offerings, customer base, and ECS strategy, focusing on hybrid cloud and AI solutions to drive growth in 2025. Its strong performance and financial resilience despite industry challenges have reinforced its well-deserved position as a top stock in Greenhaven Associates’ portfolio.
Greenhaven Associates owned over 1.9 million shares of the company as of Q4 2024, with a total value of $215.48 million, representing 3.18% of Wachenheim’s portfolio. Moreover, the fund increased its stake in Arrow Electronics, Inc. (NYSE:ARW) by 2% during the fourth quarter of 2024, which suggests a positive hedge fund sentiment about the stock. Overall, by the end of the third quarter, 28 funds out of the 900 funds tracked by Insider Monkey held stakes in Arrow Electronics worth over $1 billion, down from 33 funds by the end of Q2.
Bonhoeffer Capital Management stated the following regarding Arrow Electronics, Inc. (NYSE:ARW) in its Q3 2024 investor letter:
“In our Q1 2024 letter, our case study was our electronic component distributor, Arrow Electronics, Inc. (NYSE:ARW). Arrow’s model is to modestly grow earnings (5-6% per year) and buyback stock at a rate of about 10%. Below is the updated RoIIC model for Arrow:
Given the cyclicality of Arrow’s earnings, it is better to look at the longer term average RoIICs and averages. In this case, the 5-yr average FCF/Equity is 20% and 4-year RoIIC is 83%. As to forward estimates of growth and earnings below is the current estimated growth to 2029 with declining growth after 2026. This results in a 5-year growth rate of 20% consistent with the past 5-year growth rate and higher than the 10-year growth rate. The rationale for the higher growth rate than the 10-year growth rate is increases in component demand from AI and internet of things. If the past is repeated into the future, the EPS growth rate will be in the low teens. Below is an updated 5-year DCF for Arrow Electronics…” (Click here to read the full text)
