Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. Investors remained cautious going into the quarter as the Federal Reserve initiated its first rate-cutting cycle since the global pandemic, inflationary pressures seemed to be decreasing, and the probability of a recession appeared to be fading. The fund was down 5.50% in the quarter compared to 1.75% fall for the Russell 2000 Value Index. Stock selection was positive in Consumer Discretionary, Materials, and Consumer Staples sectors. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Heartland Mid Cap Value Fund highlighted stocks like Willis Towers Watson Public Limited Company (NASDAQ:WTW) in the fourth quarter 2024 investor letter. Headquartered in London, the United Kingdom Watson Public Limited Company (NASDAQ:WTW) is an advisory, broking, and solutions company. The one-month return of Willis Towers Watson Public Limited Company (NASDAQ:WTW) was 0.24%, and its shares gained 25.31% of their value over the last 52 weeks. On January 13, 2025, Willis Towers Watson Public Limited Company (NASDAQ:WTW) stock closed at $311.26 per share with a market capitalization of $31.35 billion.
Heartland Mid Cap Value Fund stated the following regarding Willis Towers Watson Public Limited Company (NASDAQ:WTW) in its Q4 2024 investor letter:
“Another example of a successful self-help story is Willis Towers Watson Public Limited Company (NASDAQ:WTW). This insurance brokerage and consulting firm operates two segments: Health, Wealth, and Career (HWC) accounts for 58% of revenues and includes services such as retirement plan administration, health care plan outsourcing, and executive compensation consulting. The other segment, Risk & Broking (R&B), includes global insurance brokerage and risk management consulting services.
In 2020, competitor Aon Plc attempted to acquire WTW in an all-stock merger that would have created the world’s largest insurance brokerage. However, the Justice Department sued to block the merger, which was called off in July 2021. The turmoil from the split caused WTW to significantly underperform its peers on critical metrics including organic revenue, earnings growth, margins, and free cash flow conversion.
In 2022, CEO Carl Hess was brought in to turn the business around. He implemented a restructuring plan to transition the business from a roll-up with disparate systems into a streamlined operating company. Since then, organic growth has accelerated to peer-like performance. We expect WTW’s operating margin and free cash flow, which still trails that of its peers, to narrow driven by the sale of its underperforming Medicare brokers business along with continued operational streamlining efforts.
WTW currently trades at 17.1X consensus 2025 earnings and 13.1X EV/EBITDA, well below its peers, who are trading at a median PE of greater than 23X and 15.4X EV/EBITDA.”
A well-dressed insurance broker presenting a portfolio of investment and risk advice services to a client.
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Willis Towers Watson Public Limited Company (NASDAQ:WTW) at the end of the third quarter which was 47 in the previous quarter. Willis Towers Watson Public Limited Company (NASDAQ:WTW) reported 6% organic revenue growth in the third quarter 2024. While we acknowledge the potential of Willis Towers Watson Public Limited Company (NASDAQ:WTW) 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 Willis Towers Watson Public Limited Company (NASDAQ:WTW) and shared the list of best FTSE dividend stocks to buy. 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.