Andvari Associates, an investment management firm, released its second quarter 2024 investor letter, a copy of which can be downloaded here. Year to date, the portfolio appreciated 7.7% net of fees while the SPDR S&P 500 ETF rose 15.2%. There are two primary causes of Andvari’s trailing returns: (1) the firm does not hold some of the biggest and best-performing companies, such as Nvidia, Apple, Microsoft, Google, Meta, and Amazon; and (2) poor performance of Mesa. Andvari invested in a diverse range of companies in terms of market cap. Andvari’s performance in the first half of the year is in line with what the market typically generates in a complete year. It can feel disappointing, though, if compared with higher performance of the large caps. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Andvari Associates highlighted stocks like Arthur J. Gallagher & Co. (NYSE:AJG) in the second quarter 2024 investor letter. Arthur J. Gallagher & Co. (NYSE:AJG) provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services. The one-month return of Arthur J. Gallagher & Co. (NYSE:AJG) was 8.52%, and its shares gained 28.64% of their value over the last 52 weeks. On July 30, 2024, Arthur J. Gallagher & Co. (NYSE:AJG) stock closed at $285.00 per share with a market capitalization of $62.443 billion.
Andvari Associates stated the following regarding Arthur J. Gallagher & Co. (NYSE:AJG) in its Q2 2024 investor letter:
“Founded in 1927 by Arthur J. Gallagher & Co. (NYSE:AJG), the eponymous firm is now the third largest retail property and casualty insurance broker in the United States and also the third largest reinsurance brokerage firm in the world. In addition to their brokerage businesses, Gallagher is a significant player in third-party claims administration and HR & benefits consulting.
As hinted in the above table, Gallagher is an acquisitive company. It has been a major consolidator of the highly fragmented market of insurance brokers for decades. In just the past five full years, Gallagher has acquired 195 businesses. And the market still remains fragmented. The company estimates there are tens of thousands of independent firms across the English-speaking countries of the world.
Given Gallagher’s ability to grow organically, grow through acquisition, and the essential services it provides, there have only been three times in the past twenty-five years when revenues declined: down 0.56% in 2005, down 0.31% in 2008, and down 1.63% in 2020. Which is to say, revenues barely budged despite those tumultuous years. This is a resilient company.”
An insurance broker talking to a client, demonstrating the trust of their services.
Arthur J. Gallagher & Co. (NYSE:AJG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Arthur J. Gallagher & Co. (NYSE:AJG) at the end of the first quarter which was 38 in the previous quarter. The first quarter revenue of Arthur J. Gallagher & Co. (NYSE:AJG) rose 13% in the second quarter, including organic of 7.7% (see the details here). While we acknowledge the potential of Arthur J. Gallagher & Co. (NYSE:AJG) 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 Arthur J. Gallagher & Co. (NYSE:AJG) and shared the list of best insurance dividend stocks to invest in. 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.
