Diamond Hill Capital, an investment management company, released its “Select Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Q4 saw an uneven increase in markets, capping off yet another strong year for the markets. Stocks rose generally after the US election, but several lost most or all of their gains before the end of the year. The portfolio trailed the Russell 3000 Index in Q4 and for the full year. In Q4, the strategy returned -1.67% (net) vs 2.63% returns for the index and in 2024 the strategy returned 13.14% (net) vs 23.81% returns for the index. To get an idea of the fund’s best choices for 2024, check out its top 5 positions.
In its fourth quarter 2024 investor letter, Diamond Hill Select Strategy emphasized stocks such as Huntington Ingalls Industries, Inc. (NYSE:HII). Huntington Ingalls Industries, Inc. (NYSE:HII) is a US-based company that designs, builds, overhauls, and repairs military ships. The one-month return Huntington Ingalls Industries, Inc. (NYSE:HII) was 18.31%, and its shares lost 30.72% of their value over the last 52 weeks. On March 21, 2025, Huntington Ingalls Industries, Inc. (NYSE:HII) stock closed at $201.47 per share with a market capitalization of $7.884 billion.
Diamond Hill Select Strategy stated the following regarding Huntington Ingalls Industries, Inc. (NYSE:HII) in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, we’ve thought carefully about where and how we are exposed to more cyclical stocks. As such, we initiated just two new positions in Q4: Huntington Ingalls Industries, Inc. (NYSE:HII) and the aforementioned lululemon.
Huntington Ingalls is a critical supplier to the US Navy and a significant provider of technology solutions to the US Department of Defense. It is the sole aircraft carrier provider, one of only two nuclear submarines and Arleigh Burke-class destroyers providers, and a leading supplier of various other ships to the US Navy. We believe it is one of the best positioned defense companies to meet the Department of Defense’s need to prepare for potential conflict in the Pacific which, along with the long-cycle nature of its products, gives Huntington Ingalls high visibility into strong demand for the next 5 to 10 years. The company’s recent results have recently been pressured amid high inflation and a tight labor market, but we believe these factors will likely be priced into future contracts, and Huntington Ingalls should enjoy relative strong organic growth and margin expansion — neither of which we believe are reflected in the current valuation.”
A towering military warship off the shore, its hull representing the companies commitment to the defense sector.
Huntington Ingalls Industries, Inc. (NYSE:HII) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Huntington Ingalls Industries, Inc. (NYSE:HII) at the end of the fourth quarter which was 20 in the previous quarter. Huntington Ingalls Industries, Inc.’s (NYSE:HII) fourth quarter revenue decreased around 5% year-over-year to $3 billion. While we acknowledge the potential of Huntington Ingalls Industries, Inc. (NYSE:HII) 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 Huntington Ingalls Industries, Inc. (NYSE:HII) and shared the list of top growing aerospace and defense stocks For Trump’s Presidency. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.