Heartland Advisors, an investment management company, released its “Heartland Value Plus Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the market began to broaden as small-cap stocks rose in expectation of interest rate reduction by the Federal Reserve, and companies with compelling self-help strategies are being rewarded. The strategy gained 7.93% in the quarter, compared to a 10.15% return for the Russell 2000 Value Index. The underperformance was due to the stock selection in the Health Care, Information Technology, and Energy sectors. On the other hand, the selection effect helped the Strategy to outperform the benchmark in the Consumer Discretionary, Industrials, and Financials. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Heartland Value Plus Fund highlighted stocks like Gates Industrial Corporation plc (NYSE:GTES) in the Q3 2024 investor letter. Gates Industrial Corporation plc (NYSE:GTES) manufactures and distributes engineered power transmission and fluid power solutions. The one-month return of Gates Industrial Corporation plc (NYSE:GTES) was 2.83%, and its shares gained 57.46% of their value over the last 52 weeks. On October 11, 2024, Gates Industrial Corporation plc (NYSE:GTES) stock closed at $17.70 per share with a market capitalization of $4.612 billion.
Heartland Value Plus Fund stated the following regarding Gates Industrial Corporation plc (NYSE:GTES) in its Q3 2024 investor letter:
“We initiated positions in several new holdings while exiting or reducing our exposure in a handful of others. In some cases, we replaced an existing holding with an industry peer that we consider an upgrade.
A good example isGates Industrial Corporation plc (NYSE:GTES). This leading manufacturer of belts and hoses for vehicles and industrial machines trades at a more compelling valuation with a better self-help story than Astec Industries, an industrial manufacturer we exited during the quarter.
Over 60% of Gates’ revenues come from regular replacement of mission-critical products, providing stability through the business cycle and pricing power. At the same time, 83% of its sales are generated in markets where the company is among the Top 3 players. As a result, GTES enjoys gross margins in the top quartile of machinery stocks in the Russell 3000® Index…” (Click here to read the full text)
A factory worker in a safety vest tightening a V-belt on a power transmission assembly.
Gates Industrial Corporation plc (NYSE:GTES) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Gates Industrial Corporation plc (NYSE:GTES) at the end of the second quarter which was 39 in the previous quarter. While we acknowledge the potential of Gates Industrial Corporation plc (NYSE:GTES) 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 Gates Industrial Corporation plc (NYSE:GTES) and shared The London Company Small Cap Strategy’s views on the company in the previous quarter. 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.
