Diamond Hill Capital, an investment management company, released its “Long-Short Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The portfolio achieved positive returns in Q4 but trailed the Russell 1000 Index and outperformed the blended benchmark (60% Russell 1000 Index/40% Bloomberg US Treasury Bills 1-3 Month Index). The short positions didn’t perform as well as the index, giving a relative tailwind to the performance. The long positions in financials and communication services also contributed to relative strength. On the other hand, long holdings in health care and industrials were positive on an absolute basis but lagged behind benchmark peers, which hindered relative performance in Q1. In addition, you may look at the fund’s top 5 holdings to learn about its best picks in 2024.
Diamond Hill Capital Long-Short Fund highlighted stocks like Royal Caribbean Cruises Ltd. (NYSE:RCL), in the first quarter 2024 investor letter. Royal Caribbean Cruises Ltd. (NYSE:RCL) is a cruise company. The one-month return of Royal Caribbean Cruises Ltd. (NYSE:RCL) was 2.64%, and its shares gained 50.15% of their value over the last 52 weeks. On June 28, 2024, Royal Caribbean Cruises Ltd. (NYSE:RCL) stock closed at $159.43 per share with a market capitalization of $39.856 billion.
Diamond Hill Capital Long-Short Fund stated the following regarding Royal Caribbean Cruises Ltd. (NYSE:RCL) in its first quarter 2024 investor letter:
“As valuations have risen, it has become increasingly challenging to find high-quality companies trading at interesting valuations. Accordingly, we didn’t initiate any new long positions during the quarter. However, we did introduce three new short positions, including Powell Industries, Royal Caribbean Cruises Ltd. (NYSE:RCL) and YETI Holdings.
Royal Caribbean Group (RCL) is the second largest player in a cruise industry in which size and scale matter. While the company has benefited from strong demand since the pandemic’s end, we believe the valuation has outpaced the fundamentals and find the risk/reward on the short side attractive.”
An aerial view of a luxurious cruise ship, surrounded by the blue horizon.
Royal Caribbean Cruises Ltd. (NYSE:RCL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Royal Caribbean Cruises Ltd. (NYSE:RCL) at the end of the first quarter which was 54 in the previous quarter. While we acknowledge the potential of Royal Caribbean Cruises Ltd. (NYSE:RCL) 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.
We discussed Royal Caribbean Cruises Ltd. (NYSE:RCL) in another article and shared the list of leisure and recreation services stocks to buy. In addition, please check out our hedge fund investor letters Q1 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.
