River Road Asset Management, an investment management company released its “River Road Large Cap Value Select Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Large Cap Value Select Fund returned 0.43% compared to (1.98%) return for the Russell 1000® Value Index. For the year 2024, the fund returned 24.59% significantly outperforming Index return of 14.37%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, River Road Large Cap Value Select Fund emphasized stocks such as Nestlé S.A. (OTC:NSRGY). Headquartered in Vevey, Switzerland Nestlé S.A. (OTC:NSRGY) is a food and beverage company. The one-month return of Nestlé S.A. (OTC:NSRGY) was 5.50%, and its shares lost 4.13% of their value over the last 52 weeks. On March 27, 2025, Nestlé S.A. (OTC:NSRGY) stock closed at $101.81 per share with a market capitalization of $261.929 billion.
River Road Large Cap Value Select Fund stated the following regarding Nestlé S.A. (OTC:NSRGY) in its Q4 2024 investor letter:
“Nestlé S.A. (OTC:NSRGY), the world’s largest food and beverage company, was also a significant underperformer in the portfolio. The company’s foundation rests on its dominant market position, with over 40% of sales coming from high-growth Emerging Markets. Its strategic focus on premium segments including coffee, pet care, infant nutrition, Nestle Professional, and confectionery— which generate more than half of company profits—demonstrates strong portfolio management. Under former CEO Mark Schneider’s leadership (2017-2024), the company achieved significant operational improvements through enhanced margins, strategic acquisitions and divestitures, increased dividends, and share repurchases, though his departure appears linked to cultural tensions with the company’s traditional approach.
However, recent headwinds have impacted performance, with total sales declining -2.4% year-over-year despite modest organic growth of 2.0%. The company faces challenges in North America, where Real Internal Growth contracted -0.9%. Even the historically strong pet care segment is experiencing pressure due to normalizing promotions and increased market capacity following significant inflation. These challenges, combined with broader industry headwinds of weakening consumer demand and retailer inventory reductions, are creating near-term pressure as the new leadership team implements a margin-impacting brand reinvestment strategy. We trimmed the position last quarter.”
Nestlé S.A. (OTC:NSRGY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held Nestlé S.A. (OTC:NSRGY) at the end of the fourth quarter compared to 4 in the third quarter. While we acknowledge the potential of Nestlé S.A. (OTC:NSRGY) 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.