Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. Federal Reserve, “Fed”, reduced interest rates by 0.5% on September 18, offering much-needed relief to investors. This key decision aimed to stabilize the markets following a turbulent August filled with worries about declining job market indicators. Against this backdrop, the fund returned 6.85% (net) during the quarter underperforming the 8.75% returns of the Russell 2500 Index and 9.63% returns of the secondary benchmark the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Contrarian Fund highlighted stocks like Kornit Digital Ltd. (NASDAQ:KRNT), in the third quarter 2024 investor letter. Kornit Digital Ltd. (NASDAQ:KRNT) designs and markets digital printing solutions for the fashion, apparel, and home decor segments. The one-month return of Kornit Digital Ltd. (NASDAQ:KRNT) was 32.71%, and its shares gained 69.06% of their value over the last 52 weeks. On November 27, 2024, Kornit Digital Ltd. (NASDAQ:KRNT) stock closed at $31.36 per share with a market capitalization of $1.491 billion.
Meridian Contrarian Fund stated the following regarding Kornit Digital Ltd. (NASDAQ:KRNT) in its Q3 2024 investor letter:
“Kornit Digital Ltd. (NASDAQ:KRNT) is a leader in digital textile printing, a technology that replaces traditional screen printing for apparel and textiles with a more efficient, digitally enabled process that requires fewer people, less energy, and less water. We invested in Kornit earlier this year after monitoring the stock for several years. We observed that its 68% revenue growth in 2021 pulled years of demand forward and macro effects, including high interest rates, caused business headwinds. These effects led to earnings declines, causing the stock to fall from a high of $180 to under $20.
Kornit performed well during the quarter, as its results and guidance indicated that demand had bottomed and was poised to resume growth. We increased our position based on these signs of improvement, the multi-billion-dollar opportunity of digital conversion, and the company’s strong balance sheet, which includes more than $10 per share of net cash.”
An industrial printing machine churning out specialized orders for a major client.
Kornit Digital Ltd. (NASDAQ:KRNT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Kornit Digital Ltd. (NASDAQ:KRNT) at the end of the third quarter which was 14 in the previous quarter. Kornit Digital Ltd. (NASDAQ:KRNT) reported revenues of $50.7 million in the third quarter and adjusted EBITDA margin of 2.9%. While we acknowledge the potential of Kornit Digital Ltd. (NASDAQ:KRNT) 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 addition, please check out our hedge fund investor letters Q3 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.