Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. share market reached record highs in the quarter, with the S&P 500 Index rising 5.89%. The market showed wider gains, unlike the previous quarter, with the S&P 500 Equal Weight Index beating the cap-weighted S&P 500 Index by 3.71%. The composite returned 6.47% gross of fees (6.39% net of fees) in the third quarter underperforming the 9.43% return of the Russell 1000 Value Index and outperforming the 5.89% return of the S&P 500 Index. Security selection led the composite to underperform in the quarter relative to the Russell 1000 Value 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 Capital Value Equity Strategy highlighted stocks like Microchip Technology Incorporated (NASDAQ:MCHP), in the third quarter 2024 investor letter. 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 1.27%, and its shares lost 1.23% of their value over the last 52 weeks. On October 11, 2024, Microchip Technology Incorporated (NASDAQ:MCHP) stock closed at $77.98 per share with a market capitalization of $41.837 billion.
Aristotle Capital Value Equity Strategy stated the following regarding Microchip Technology Incorporated (NASDAQ:MCHP) in its Q3 2024 investor letter:
Microchip Technology Incorporated (NASDAQ:MCHP), the microcontroller (MCU) and analog semiconductor producer, was a primary detractor for the period. The company reported results in line with guidance, but its short-term outlook remains challenged. Between 2021-2023, amid a global chip shortage, Microchip implemented a preferred supply program to meet the large demands of its clients, who overestimated their needs and are now working through their inventory levels. While management has started to see some positive signs pointing toward a recovery (e.g., higher expedited orders and fewer order cancelations), it is taking longer than anticipated. Longer term, Microchip has been able to generate 15+ years of robust FREE cash flow and margins, while lowering its debt and consistently returning money to shareholders. This, we believe, speaks to the company’s proven ability to manage the business through economic cycles, while taking advantage of its broad portfolio to continue gaining share in areas including IoT, 5G infrastructure, autonomous driving and data centers.
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 31 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Microchip Technology Incorporated (NASDAQ:MCHP) at the end of the second quarter which was 35 in the previous quarter. In the June quarter, Microchip Technology Incorporated (NASDAQ:MCHP) reported $1.241 billion in net sales, down 6.4% sequentially. 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 trending AI stocks on latest news and analyst ratings. Baird Mid Cap Growth Equity Strategy established a position in Microchip Technology Incorporated (NASDAQ:MCHP) during Q2 2024. In addition, please check out our hedge fund investor letters Q3 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.
