The London Company, an investment management company, released “The London Company SMID Cap Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities traded higher during the fourth quarter, with most of the major indices posting positive gains. Economic data released during the quarter was positive, though somewhat inconsistent. The portfolio returned 1.9% (1.7%, net) in the quarter compared to a 0.6% increase for the Russell 2500 Index. Both stock selection and sector exposure led the portfolio to outperform in the quarter. For more information on the fund’s top picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, The London Company SMID Cap Strategy emphasized stocks such as Element Solutions Inc (NYSE:ESI). Element Solutions Inc (NYSE:ESI) is a specialty chemicals company that operates in Electronics, and Industrial & Specialty segments. The one-month return of Element Solutions Inc (NYSE:ESI) was 3.83%, and its shares gained 12.59% of their value over the last 52 weeks. On February 25, 2025, Element Solutions Inc (NYSE:ESI) stock closed at $26.29 per share with a market capitalization of $6.374 billion.
The London Company SMID Cap Strategy stated the following regarding Element Solutions Inc (NYSE:ESI) in its Q4 2024 investor letter:
“Initiated: Element Solutions Inc (NYSE:ESI) – ESI is a specialty chemicals producer serving electronics and industrial markets. Electronics is ESI’s primary growth engine, supported by content growth in circuit boards, semiconductors, and EV markets. A variable cost structure and sticky, spec’d-in products bolster earnings stability across cycles. ESI offers consistent cash flow and benefits from strong capital allocation led by management aligned with long-term incentives. More recently, management has been divesting non-core assets and reinvesting back into its growth segments. Trading at an attractive discount to intrinsic value, we believe ESI offers upside from a recovering electronics cycle, margin expansion from improved product mix, and pricing power due to high customer switching costs.”
An industrial worker in a protective suit operating a complex chemical process.
Element Solutions Inc (NYSE:ESI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Element Solutions Inc (NYSE:ESI) at the end of the fourth quarter compared to 46 in the third quarter. While we acknowledge the potential of Element Solutions Inc (NYSE:ESI) 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 Element Solutions Inc (NYSE:ESI) and shared stock picks of billionaire Larry Robbins. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.