The London Company, an investment management company, released “The London Company Small Cap Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, US equities traded higher, with most indices posting positive returns. The fund appreciated 2.5% (2.3%, net) outperforming the 0.3% increase of the Russell 2000 Index. The positive impact of both stock selection and sector allocation contributed to the relative performance of the strategy in the quarter. For more information on the fund’s top picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, The London Company Small Cap Strategy emphasized stocks such as Gates Industrial Corporation plc (NYSE:GTES). Gates Industrial Corporation plc (NYSE:GTES) manufactures and distributes engineered power transmission and fluid power solutions. The one-month return of Gates Industrial Corporation plc (NYSE:GTES) was 7.70%, and its shares gained 49.28% of their value over the last 52 weeks. On February 24, 2025, Gates Industrial Corporation plc (NYSE:GTES) stock closed at $21.81 per share with a market capitalization of $5.57 billion.
The London Company Small Cap Strategy stated the following regarding Gates Industrial Corporation plc (NYSE:GTES) in its Q4 2024 investor letter:
“Gates Industrial Corporation plc (NYSE:GTES) – GTES continues to execute effectively on cost management, driving notable profitability improvements. Its diversified portfolio and significant replacement mix provide earnings stability and downside protection, with growth in replacement channels driving overall performance. A strong margin profile and low capital requirements continue to support robust free cash flow generation and high returns on capital. GTES is well positioned for above-market growth and margin expansion by leveraging trends like electrification and chain-to-belt retrofitting, alongside ongoing cost improvements and productivity gains, reinforcing our confidence in the investment thesis.”
A factory worker in a safety vest tightening a V-belt on a power transmission assembly.
Gates Industrial Corporation plc (NYSE:GTES) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Gates Industrial Corporation plc (NYSE:GTES) at the end of the fourth quarter compared to 31 in the third quarter. While we acknowledge the potential of Gates Industrial Corporation plc (NYSE:GTES) 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 Gates Industrial Corporation plc (NYSE:GTES) and shared Heartland Value Plus Fund’s views on the company in the previous quarter. The London Company Small Cap Strategy established a position in Gates Industrial Corporation plc (NYSE:GTES) during Q2 2024. 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.