Ariel Investments, an investment management company, released its “Ariel Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. Due to investor excitement for stocks with an artificial intelligence (AI) theme, the bull market surged through the second quarter. The S&P 500 edged a small gain despite the loss in Mid- and Small-Cap stocks because of this narrow, momentum-driven rally. The fund decreased -5.64% in the quarter against this backdrop, underperforming the Russell 2500 Value Index’s -4.31% and the Russell 2500 Index’s -4.27% return. For more information on the fund’s top picks in 2024, please check its top five holdings.
Ariel Fund highlighted stocks like ADT Inc. (NYSE:ADT), in the second quarter 2024 investor letter. ADT Inc. (NYSE:ADT) is a provider of security, interactive, and smart home solutions to residential and small business customers. The one-month return of ADT Inc. (NYSE:ADT) was -1.94%, and its shares gained 9.10% of their value over the last 52 weeks. On August 6, 2024, ADT Inc. (NYSE:ADT) stock closed at $7.07 per share with a market capitalization of $6.447 billion.
Ariel Fund stated the following regarding ADT Inc. (NYSE:ADT) in its Q2 2024 investor letter:
“Leading provider of automated security solutions ADT Inc. (NYSE:ADT) also traded up in the quarter. A top- and bottom-line earnings beat, highlighted by strong growth within the consumer and small business segment, low attrition, an improving payback period and margin expansion aided shares. Meanwhile, ADT sold its commercial business and is winding down its solar business to focus on profitability in the residential sector and pay down debt. We continue to believe ADT’s industry-leading brand and national presence, coupled with its Google and State Farm strategic partnerships, position it to be a prime beneficiary of growing demand for smart home technologies, including fully monitored residential security.”
A technician demonstrating a security solution for a corporate office.
ADT Inc. (NYSE:ADT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held ADT Inc. (NYSE:ADT) at the end of the first quarter which was 22 in the previous quarter. In the second quarter, ADT Inc. (NYSE:ADT) generated $1.2 billion in total revenues, representing a 3% increase form Q2 2023. While we acknowledge the potential of ADT Inc. (NYSE:ADT) 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 ADT Inc. (NYSE:ADT) and shared the list of smart home companies revolutionizing the US. In addition, please check out our hedge fund investor letters Q2 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.
