Ariel Investments, an investment management firm, published its “Ariel Fund & Ariel Appreciation Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. For the three months ending December 31, 2021, Ariel Fund and Ariel Appreciation Fund lagged their primary value benchmarks. This was largely due to some weakness among our highest conviction consumer names. Still, Ariel Appreciation Fund solidly outpaced its core benchmark during the quarter and landed between the value and core indices for the full year. Meanwhile, Ariel Fund crushed both its primary and secondary benchmarks for the year. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Ariel Investments, in its Q4 2021 investor letter, mentioned GameStop Corp. (NYSE:GME) and discussed its stance on the firm. Founded in 1984, GameStop Corp. (NYSE:GME) is a Grapevine, Texas-based electronics retail company with a $7.1 billion market capitalization, and is currently spearheaded by its CEO, Matt Furlong. GameStop Corp. (NYSE:GME) delivered a -36.52% return since the beginning of the year, while its 12-month returns are down by -48.17%. The stock closed at $94.20 per share on March 21, 2022.
Here is what Ariel Investments has to say about GameStop Corp. (NYSE:GME) in its Q4 2021 investor letter:
“While the large cap benchmarks were propelled by tech with an assist from cyclicals, the smaller company indices were buoyed by interest rate sensitive issues, along with a recovering Energy sector. In addition, so-called “meme” stocks managed to hijack the narrative at times. Now a part of our vernacular, what does “meme” mean? Dictionary.com says it is “a cultural item that is transmitted by repetition and replication…” The New York Times explains the financial context: “Millions of amateur investors, stuck at home during the pandemic, piled into the stock market, too, buying up shares of all kinds of companies—even those that no one expects to earn money, like the video game retailer GameStop Corp. (GME).” It so happens, GameStop’s staggering +725% return made it the number one performing stock of 2021. Once the company grew to triple the size of the average holding in the small cap benchmark, it was kicked upstairs to the large cap index. This shift made GameStop (and stocks like it), a less pronounced part of the smaller company performance story as the year progressed.”
Photo by Mohamed Hadji on Unsplash
Our calculations show that GameStop Corp. (NYSE:GME) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. GameStop Corp. (NYSE:GME) was in 14 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 9 funds in the previous quarter. GameStop Corp. (NYSE:GME) delivered a -40.42% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on GameStop Corp. (NYSE:GME) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
