River Road Asset Management, an investment management company released its “River Road Small-Mid Cap Value Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Small Cap Value Fund (Class N) returned 3.67% compared to -0.26% returns for the Russell 2500TM Value Index. For the year 2024, the fund returned 12.46% compared to the Index return of 10.98%. 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 Small-Mid Cap Value Fund emphasized stocks such as Huntington Ingalls Industries, Inc. (NYSE:HII). Huntington Ingalls Industries, Inc. (NYSE:HII) is a US-based company that designs, builds, overhauls, and repairs military ships. The one-month return Huntington Ingalls Industries, Inc. (NYSE:HII) was 3.51%, and its shares lost 30.03% of their value over the last 52 weeks. On April 1, 2025, Huntington Ingalls Industries, Inc. (NYSE:HII) stock closed at $202.20 per share with a market capitalization of $7.858 billion.
River Road Small-Mid Cap Value Fund stated the following regarding Huntington Ingalls Industries, Inc. (NYSE:HII) in its Q4 2024 investor letter:
“The largest new position added during the quarter was Huntington Ingalls Industries, Inc. (NYSE:HII). Huntington Ingalls Industries is America’s largest military shipbuilder with two main shipyards including Ingalls and Newport News. HII develops and constructs nuclear submarines and aircraft carriers at its Newport News yard, while constructing surface combatants and amphibious assault ships at its Ingalls yard. Additionally, HII provides professional services including next generation IT consulting to government agencies and maintenance services (e.g. refueling) to military ships. HII spun off from Northrop Grumman (NOC) in 2011, however, the shipyards have been operating for more than 80 years. HII is based in Newport News, VA. Christopher Kastner (61) has been president and CEO since 2022 after serving as chief financial officer since 2016.
HII’s historically high backlog at $49B equates to approximately four years of sales. This backlog provides significant revenue visibility as 60% of revenues are under contract over the next five fiscal years. HII is the U.S. government’s sole source for nuclear-powered aircraft carriers and is one of two builders of the Virginia class (VCS)/ Columbia class nuclear-powered submarines and the Arleigh Burke guided missile destroyers (DDG). The technical solutions segment, which includes HII non-shipbuilding operations, is expected to grow more rapidly than shipbuilding (~25% of revenues by FY 2024) and expand margins, while maintenance services should help insulate HII from any new construction volatility and provide top-line visibility for many years given HII’s capabilities across the military ship life cycle…” (Click here to read the full text)
A towering military warship off the shore, its hull representing the companies commitment to the defense sector.
Huntington Ingalls Industries, Inc. (NYSE:HII) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Huntington Ingalls Industries, Inc. (NYSE:HII) at the end of the fourth quarter which was 20 in the previous quarter. Huntington Ingalls Industries, Inc.’s (NYSE:HII) fourth quarter revenue decreased around 5% year-over-year to $3 billion. While we acknowledge the potential of Huntington Ingalls Industries, Inc. (NYSE:HII) 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.
We covered Huntington Ingalls Industries, Inc. (NYSE:HII) in another article, where we shared Diamond Hill Select Strategy’s views on the company. 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.