Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. Major index returns increased in the quarter due to strong earnings from large-cap technology companies, especially those connected to artificial intelligence. However, the market’s breadth revealed a different picture. The fund returned -5.03% (net) during the quarter underperforming the -4.27% return of the Russell 2500 Index and -4.31% returns of the secondary benchmark the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Contrarian Fund highlighted stocks like American Superconductor Corporation (NASDAQ:AMSC), in the second quarter 2024 investor letter. American Superconductor Corporation (NASDAQ:AMSC) is a global megawatt-scale power resiliency solutions provider. The one-month return of American Superconductor Corporation (NASDAQ:AMSC) was 3.35%, and its shares gained 188.17% of their value over the last 52 weeks. On September 11, 2024, American Superconductor Corporation (NASDAQ:AMSC) stock closed at $21.93 per share with a market capitalization of $839.827 million.
Meridian Contrarian Fund stated the following regarding American Superconductor Corporation (NASDAQ:AMSC) in its Q2 2024 investor letter:
“American Superconductor Corporation (NASDAQ:AMSC) designs and manufactures power electronics and control systems for electricity transmission, distribution, and infrastructure. End markets include electric grids, wind power, industrial and naval. Our strategy’s screening process identified the company when its largest customer at the time, a Chinese wind turbine manufacturer, stole its IP resulting in a 75% revenue decline. Our investment thesis was that the rebuilt company, following an IP litigation victory, was in a good position to resume earnings growth with significant upside potential driven by demand for electric grid upgrades, growth of wind power, and naval program wins. The stock performed well during the period on continued strong earnings and revenue growth that beat expectations. We trimmed our holdings during the quarter following strong performance as part of our normal risk management process, but maintain a position given the company’s strong performance and potential upside.”
A technician in a hard hat using an industrial machine to construct a power grid segment.
American Superconductor Corporation (NASDAQ:AMSC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held American Superconductor Corporation (NASDAQ:AMSC) at the end of the second quarter which was 23 in the previous quarter. In the fourth quarter of fiscal 2023, American Superconductor Corporation (NASDAQ:AMSC) reported $42 million in revenue grew 32% year-over-year. While we acknowledge the potential of American Superconductor Corporation (NASDAQ:AMSC) 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 Q2 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.
