Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, investors fled to shelter as hopes for another year of U.S. outperformance, driven by economic momentum and the new administration’s pro-business approach swiftly gave way to tariff fears and policy uncertainty, causing most of the major U.S. indices to close the quarter in the red. Against this backdrop, the fund returned -6.94% in the first quarter underperforming the Russell Midcap Value Index’s -2.11% returns, and the Russell Midcap Index’s -3.40% returns. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Ariel Appreciation Fund highlighted stocks such as Knowles Corporation (NYSE:KN). Knowles Corporation (NYSE:KN) provides capacitors, radio frequency (RF) filtering products, balanced armature speakers, micro-acoustic microphones, and audio solutions. The one-month return of Knowles Corporation (NYSE:KN) was -11.51%, and its shares lost 10.51% of their value over the last 52 weeks. On April 21, 2025, Knowles Corporation (NYSE:KN) stock closed at $14.30 per share with a market capitalization of $1.266 billion.
Ariel Appreciation Fund stated the following regarding Knowles Corporation (NYSE:KN) in its Q1 2025 investor letter:
“Leading provider of audio components and precision electrical devices, Knowles Corporation (KN), also traded lower following a quarterly earnings miss as slower than expected shipments of new specialty film products weighed on results. Meanwhile, demand from hearing aid companies for speakers/receivers is accelerating and management noted the industrial market appears to be stabilizing. Longer-term, we believe KN will benefit from a focus on niche and market leading positions in hearing health and precision devices, generating attractive revenue growth and free cash flows. At current levels, KN is trading at a meaningful discount to our estimate of private market value.”
A research and development lab, assembling a network of high-performance capacitors.
Knowles Corporation (NYSE:KN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Knowles Corporation (NYSE:KN) at the end of the third quarter which was 13 in the previous quarter. In the fourth quarter, Knowles Corporation (NYSE:KN) generated $143 million in revenues which was within the guided range. While we acknowledge the potential of Knowles Corporation (NYSE:KN) 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 covered Knowles Corporation (NYSE:KN) and shared Madison Small Cap Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 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.