Ariel Investments, an investment management company, released its “Ariel Focus Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund increased +7.45% and fell short of an +8.99% return for the Russell 1000 Value Index and a +10.56% return for the S&P 500 Index. Investor enthusiasm around artificial intelligence (AI), resilient corporate earnings growth, falling inflation, and expectations for interest rate cuts this year led the US indices to outperform in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Ariel Focus Fund highlighted stocks like PHINIA Inc. (NYSE:PHIN), in the first quarter 2024 investor letter. PHINIA Inc. (NYSE:PHIN), a spin-off from BorgWarner (BWA), develops, designs, and manufactures integrated components and systems for commercial and light vehicles, and industrial applications to optimize performance, increase efficiency, and reduce emissions. The one-month return of PHINIA Inc. (NYSE:PHIN) was -2.43%, and year to date its shares gained 40.57% of their value. On June 10, 2024, PHINIA Inc. (NYSE:PHIN) stock closed at $42.58 per share with a market capitalization of $1.945 billion.
Ariel Focus Fund stated the following regarding PHINIA Inc. (NYSE:PHIN) in its first quarter 2024 investor letter:
“Manufacturer of premium fuel and electrical systems, Phinia Inc. (PHIN) also traded up in the period on solid earnings results and a positive full year 2024 outlook. Healthy consumer pricing, new business wins across all end markets, ongoing weakness in electric vehicles, growth in light vehicle original equipment and strong cost controls, more than offset disappointing commercial vehicle sales in China. Meanwhile, management continues to prioritize capital returns to shareholders via buybacks and dividends. Looking ahead, we expect PHIN to deliver sustainable, profitable growth and significant cash generation as it captures operational efficiencies, exits agreements with its former parent company BorgWarner Inc. and also expands its industrial and aftermarket customer base.”
Workers assembling a state-of-the-art engine in a modern auto factory.
PHINIA Inc. (NYSE:PHIN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held PHINIA Inc. (NYSE:PHIN) at the end of the first quarter which was 30 in the previous quarter. PHINIA Inc. (NYSE:PHIN) delivered $846 million in adjusted total sales in Q1, a marginal increase compared to Q1 2023. While we acknowledge the potential of PHINIA Inc. (NYSE:PHIN) 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 PHINIA Inc. (NYSE:PHIN) and shared Silver Ring Value Partners’ views on the company. In addition, please check out our hedge fund investor letters Q1 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.
