Ariel Investments, an investment management company, released its “Ariel Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Global markets in 2024 exceeded forecasts, primarily due to the overwhelming success of the “magnificent seven,” or mega-cap technology stocks. Despite the concentration of gains, the optimism was fueled by the U.S. election results, solid earnings growth, and a healthy labor market. The fund returned -0.66% in the quarter trailing both the Russell 2500 Value and Russell 2500 Indices, which returned -0.26% and +0.62%, respectively. Ariel Fund increased +11.80%, outpacing the Russell 2500 Value Index’s +10.98% return and just short of the Russell 2500 Index +12.00% gain, over the trailing one-year period. For more information on the fund’s top picks in 2024, please check its top five holdings.
Ariel Fund highlighted stocks like Mohawk Industries, Inc. (NYSE:MHK), in the fourth quarter 2024 investor letter. Mohawk Industries, Inc. (NYSE:MHK) designs and manufactures flooring products. The one-month return of Mohawk Industries, Inc. (NYSE:MHK) was 4.42%, and its shares gained 19.32% of their value over the last 52 weeks. On January 28, 2024, Mohawk Industries, Inc. (NYSE:MHK) stock closed at $124.39 per share with a market capitalization of $7.852 billion.
Ariel Fund stated the following regarding Mohawk Industries, Inc. (NYSE:MHK) in its Q4 2024 investor letter:
“By comparison, shares of manufacturer and distributor of floorcovering products, Mohawk Industries, Inc. (NYSE:MHK) declined in the period as consumer demand and pricing remain under pressure due to secular headwinds in the housing market. Although quarterly earnings results were in-line with expectations, management lowered near-term guidance to account for losses resulting from recent U.S. hurricanes. Meanwhile, management continues to successfully execute on productivity and cost restructuring initiatives, while also preparing the business for share gains as demand recovers. In our view, MHK’s healthy balance sheet and progress managing through economic cycles should help the company benefit from long-term growth in residential remodeling, new home construction and commercial projects.”
An aerial view of a house filled with beautiful flooring products.
Mohawk Industries, Inc. (NYSE:MHK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Mohawk Industries, Inc. (NYSE:MHK) at the end of the third quarter which was 40 in the previous quarter. Mohawk Industries, Inc. (NYSE:MHK) net sales were $2.7 billion in Q3 2024, down approximately 2% compared to Q3 2023. While we acknowledge the potential of Mohawk Industries, Inc. (NYSE:MHK) 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 Mohawk Industries, Inc. (NYSE:MHK) and shared the list of top stocks with improving earnings revisions, P/E ratios, EPS growth, and other indicators according to investment bank UBS. Mohawk Industries, Inc. (NYSE:MHK) contributed to Ariel Fund’s performance in the previous quarter followed by solid earnings and increased guidance. 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.