River Road Asset Management, an investment management company released its “River Road Small Cap Value Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Small Cap Value Fund (Class N) returned 7.35% compared to -1.06% returns for the Russell 2000® Value Index. For the year 2024, the fund returned 14.07%, significantly outperforming Index return of 8.06%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. Small caps lagged their large counter parts for eight consecutive years. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, River Road Small Cap Value Fund emphasized stocks such as GXO Logistics, Inc. (NYSE:GXO). Incorporated in 2021, GXO Logistics, Inc. (NYSE:GXO) is a logistics services provider. The one-month return of GXO Logistics, Inc. (NYSE:GXO) was 2.36%, and its shares lost 23.11% of their value over the last 52 weeks. On April 1, 2025, GXO Logistics, Inc. (NYSE:GXO) stock closed at $39.39 per share with a market capitalization of $4.708 billion.
River Road Small Cap Value Fund stated the following regarding GXO Logistics, Inc. (NYSE:GXO) in its Q4 2024 investor letter:
“The largest new position added during the quarter was GXO Logistics, Inc. (NYSE:GXO). GXO Logistics is one of the world’s largest dedicated outsourced warehousing providers with ~200 million square feet of capacity across ~1,000 facilities in 27 countries. The company specializes in providing value-add warehousing and distribution solutions, including order fulfillment, e-commerce, reverse logistics, and other supply chain services. GXO’s primary end markets include omni-channel retail (42% of sales), technology and consumer electronics (15%), food and beverage (11%), consumer packaged goods (11%), industrial (11%), and other (7%). GXO came public through a spinoff from XPO Logistics on August 2, 2021. Company founder Brad Jacobs is a famed entrepreneur and has a long track record of value creation. He has founded businesses in oil brokerage, waste services (started United Waste and sold it to Waste Management), equipment rental (founded United Rentals), and logistics industries (founded XPO). He currently serves as Chairman of GXO. CEO Malcom Wilson plans to retire in 2025 once a successor is named. GXO is based in Greenwich, CT.
GXO is the only pure-play publicly traded outsourced warehouse operator in the United States. Despite operating in a highly cyclical industry, the business’ stability is often overlooked by investors. The company has high customer retention rates (95%) with long-term contracts averaging five-year terms that include pass-through mechanisms to insulate margins from volume declines. Further, once a company chooses to outsource logistics operations, it can be costly to bring back in-house, creating high switching costs…” (Click here to read the full text)
A fleet of trucks leaving a depot, loaded with consumer goods, representing the companies logistical services.
GXO Logistics, Inc. (NYSE:GXO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held GXO Logistics, Inc. (NYSE:GXO) at the end of the fourth quarter compared to 33 in the third quarter. In the fourth quarter 2024, GXO Logistics, Inc. (NYSE:GXO) generated revenues of $3.3 billion, up 25% year-over-year. While we acknowledge the potential of GXO Logistics, Inc. (NYSE:GXO) 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.
We covered GXO Logistics, Inc. (NYSE:GXO) in another article, where we shared Mar Vista U.S. Quality Strategy’s views on the company. 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.