Mar Vista Investment Partners, LLC, an investment management company, released the “Mar Vista U.S. Quality Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The stock market rose in 2024 and carried on through the fourth quarter, as investors welcomed the growing optimism following the presidential election. For the year, the S&P 500® Index (“S&P 500®”) increased by 25.0%, its second straight consecutive annual gain above 20%. In the fourth quarter, the strategy returned -0.18% net-of-fees compared to +2.74% and +2.41% returns for the Russell 1000® Index and the S&P 500® Index, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Mar Vista U.S. Quality Strategy emphasized stocks such as Microchip Technology Incorporated (NASDAQ:MCHP). Microchip Technology Incorporated (NASDAQ:MCHP) manufactures and distributes smart, connected, and secure embedded control solutions. The one-month return of Microchip Technology Incorporated (NASDAQ:MCHP) was 5.91%, and its shares lost 26.88% of their value over the last 52 weeks. On February 21, 2025, Microchip Technology Incorporated (NASDAQ:MCHP) stock closed at $61.07 per share with a market capitalization of $32.845 billion.
Mar Vista U.S. Quality Strategy stated the following regarding Microchip Technology Incorporated (NASDAQ:MCHP) in its Q4 2024 investor letter:
“Microchip Technology Incorporated (NASDAQ:MCHP) has historically been one of the best-executing semiconductor companies in the industry. However, in this recent cycle, the company uncharacteristically faced execution challenges that have led to a deep, inventory-driven downturn. This downcycle is proving to be longer and more pronounced than initially predicted, and MCHP’s recovery has been slower compared to its peers.
To address these challenges, the Board has reinstated Steve Sanghi as CEO to help steer the business back on track. While we view this leadership change as a positive step, we believe the extended nature of this downturn will require more time to resolve than originally expected. Given these factors, we have decided to divest our position in MCHP.”
A semiconductor wafer at various stages of fabrication, showing the company’s range of expertise.
Microchip Technology Incorporated (NASDAQ:MCHP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. Microchip Technology Incorporated’s (NASDAQ:MCHP) net sales in the December quarter were $1.026 billion, down 11.8% sequentially and down 41.9% from Q4 2023. As per our database, 44 hedge fund portfolios held Microchip Technology Incorporated (NASDAQ:MCHP) at the end of the fourth quarter compared to 37 in the third quarter. While we acknowledge the potential of Microchip Technology Incorporated (NASDAQ:MCHP) 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 Microchip Technology Incorporated (NASDAQ:MCHP) and shared the list of last week’s best dividend stocks. 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.