Heartland Advisors, an investment management company, released its “Heartland Value Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund was up 1.97% in the fourth quarter compared to a 1.06% fall for the Russell 2000 Value Index. The fund outperformed the benchmark over the past 1, 3, and 5 years. As in the previous 1, 3, and 5 years, stock selection accounted for almost all of the fourth-quarter outperformance. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Heartland Value Fund highlighted stocks like DENTSPLY SIRONA Inc. (NASDAQ:XRAY), in the fourth quarter 2024 investor letter. DENTSPLY SIRONA Inc. (NASDAQ:XRAY) is a global manufacturer and distributor of various dental products and technologies. The one-month return of DENTSPLY SIRONA Inc. (NASDAQ:XRAY) was -2.76%, and its shares lost 48.09% of their value over the last 52 weeks. On January 13, 2025, DENTSPLY SIRONA Inc. (NASDAQ:XRAY) stock closed at $18.66 per share with a market capitalization of $3.709 billion.
Heartland Value Fund stated the following regarding DENTSPLY SIRONA Inc. (NASDAQ:XRAY) in its Q4 2024 investor letter:
“One of our worst performers in the quarter was a recent addition, DENTSPLY SIRONA Inc. (NASDAQ:XRAY). Shares of the leading manufacturer of dental equipment and supplies lost more than a quarter of their value after the company voluntarily suspended sales of its Byte Aligners and Impression Kits in late October as it conducts a review of regulatory requirements related to the product.
We did not anticipate this development, but understood this type of repricing was possible, having set our max downside target for the stock at $17, just below the current price of around $18 a share. Instead of panicking, we’ve been adding to our position.
In light of recent events, we don’t believe Dentsply will be able to meet our 2026 targets. However, this does not change our confidence in new management’s efforts to improve the company’s financial and competitive standing. The market seems to be overlooking XRAY’s self-help strategy, which includes streamlining its product lines, improving R&D productivity, and accelerating new launches.
The company is well underway on a cost-savings program of roughly $300 million through workforce reductions, manufacturing facility consolidation, and the divestiture of less profitable businesses. Yet the stock seems to be extremely discounted in both absolute and relative terms, trading at just 10.5X next 12-month earnings and 9X EV/EBITDA.”
A doctor adjusting dental equipment in a modern dental clinic.
DENTSPLY SIRONA Inc. (NASDAQ:XRAY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held DENTSPLY SIRONA Inc. (NASDAQ:XRAY) at the end of the third quarter which was 27 in the previous quarter. DENTSPLY SIRONA Inc. (NASDAQ:XRAY) reported $951 million in revenue with organic sales up 1.3%. While we acknowledge the potential of DENTSPLY SIRONA Inc. (NASDAQ:XRAY) 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 DENTSPLY SIRONA Inc. (NASDAQ:XRAY) and shared the list of worst 3D printing and additive manufacturing 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.