Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Q4 witnessed an uneven increase in markets, capping off yet another positive year for the markets. In general, equities rose after the US election, but some gave up most or all of those gains by the end of the year. The portfolio trailed the Russell Midcap Index in Q4 and for the full year. The strategy returned -2.18% (gross) and -2.35% (net) in the quarter compared to 0.62% for the index. For the full year, the strategy returned 11.39% (gross) and 10.61% (net) compared to 15.34% return for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Diamond Hill Mid Cap Strategy emphasized stocks such as Informatica Inc. (NYSE:INFA). Informatica Inc. (NYSE:INFA) offers an AI platform that connects, manages, and unifies data across multi-vendor, multi-cloud, and hybrid systems at enterprise scale. The one-month return of Informatica Inc. (NYSE:INFA) was -9.62%, and its shares lost 46.95% of their value over the last 52 weeks. On March 17, 2025, Informatica Inc. (NYSE:INFA) stock closed at $18.42 per share with a market capitalization of $5.574 billion.
Diamond Hill Mid Cap Strategy stated the following regarding Informatica Inc. (NYSE:INFA) in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, we’ve thought carefully about where and how we are exposed to more cyclical stocks. As such, we initiated a number of new positions in Q4, including ICON, Informatica Inc. (NYSE:INFA), Teledyne Technologies, LPL Financial Holdings, Teleflex Incorporated and Solventum Corporation.
Informatica is a comprehensive data management software company, providing an array of solutions that facilitate monitoring, manipulating and moving data assets at large enterprises. The company has been steadily transitioning customers to a new cloud-native environment with more modern technologies — a process which has temporarily obfuscated both results and Informatica’s growth prospects in the market’s eyes. However, we believe the company’s medium- to long-term outlook is solid and underappreciated, allowing us an opportunity to introduce a position to the portfolio at what we believe to be a compelling valuation.”
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Informatica Inc. (NYSE:INFA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Informatica Inc. (NYSE:INFA) at the end of the fourth quarter compared to 22 in the third quarter. While we acknowledge the potential of Informatica Inc. (NYSE:INFA) 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 Informatica Inc. (NYSE:INFA) and shared the list of AI stocks making waves on Wall Street. 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.