Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. equity market finished the year strongly with the S&P 500 Index increasing 2.41% during the quarter. Conversely, the Bloomberg U.S. Aggregate Bond Index experienced a decrease, dropping 3.06% during the quarter. The composite returned -4.09% gross of fees (-4.14% net of fees) in the fourth quarter underperforming the -1.98% return of the Russell 1000 Value Index and 2.41% return of the S&P 500 Index. Security selection led the composite to underperform in the quarter relative to the index, while allocation had a slight negative impact. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Aristotle Value Equity Strategy highlighted stocks like Lennar Corporation (NYSE:LEN) in its Q4 2024 investor letter. Headquartered in Miami, Florida, Lennar Corporation (NYSE:LEN) is a homebuilder. The one-month return of Lennar Corporation (NYSE:LEN) was 2.51%, and its shares lost 6.77% of their value over the last 52 weeks. On January 17, 2025, Lennar Corporation (NYSE:LEN) stock closed at $141.54 per share with a market capitalization of $38.197 billion.
Aristotle Value Equity Strategy stated the following regarding Lennar Corporation (NYSE:LEN) in its Q4 2024 investor letter:
“Lennar Corporation (NYSE:LEN), one of the nation’s largest homebuilders, was the biggest detractor for the quarter. The rapid and unexpected increase in mortgage rates during the quarter resulted in new orders being below prior guidance. As the company attempted to offset the higher mortgage rates’ impact on affordability through short-term incentives, gross margins also suffered. Lennar remains committed to its volume-based strategy and plans to continue to use dynamic pricing and digital marketing to drive sales. Longer term, the underlying demand for homes remains very strong, while the chronic supply shortage continues (the result of years of underproduction and restricted land permitting). In addition to focusing on volume, Lennar also continues to execute on the previously identified catalyst of shifting toward an asset-light, land-light business model (i.e., 82% of land controlled via options versus 18% owned, an improvement from 76/24 just one year ago) and remains open to opportunistic acquisitions, such as the recently announced acquisition of Rausch Coleman Homes, which will expand Lennar’s footprint in Arkansas, Kansas and Missouri.”
A construction worker building a new home with new flooring, and the homeowner discussing financing options.
Lennar Corporation (NYSE:LEN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held Lennar Corporation (NYSE:LEN) at the end of the third quarter which was 60 in the previous quarter. While we acknowledge the potential of Lennar Corporation (NYSE:LEN) 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 addition, please check out our hedge fund investor letters Q4 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.