Should You Invest in Archrock (AROC)?

ClearBridge Investments, an investment management company, released its “ClearBridge Mid Cap Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fourth quarter was turbulent for mid-size stocks, which surged following the election and interest rate reductions before holding steady as the market shifted back to large cap leadership. The strategy outperformed its Russell Midcap Index during the fourth quarter driven by strong stock selection among IT and industrials holdings. In addition, please check the fund’s top five holdings to know its best picks in 2024.

In its fourth quarter 2024 investor letter, ClearBridge Mid Cap Strategy emphasized stocks such as Archrock, Inc. (NYSE:AROC). Headquartered in Houston, Texas, Archrock, Inc. (NYSE:AROC) is an energy infrastructure company. The one-month return of Archrock, Inc. (NYSE:AROC) was -11.24%, and its shares gained 45.70% of their value over the last 52 weeks. On February 26, 2025, Archrock, Inc. (NYSE:AROC) stock closed at $38.88 per share with a market capitalization of $4.666 billion.

ClearBridge Mid Cap Strategy stated the following regarding Archrock, Inc. (NYSE:AROC) in its Q4 2024 investor letter:

“We initiated a new position in Archrock, Inc. (NYSE:AROC), an energy infrastructure company and the leading provider of natural gas compression equipment and services. The company has demonstrated strong capital discipline, maintaining high return thresholds for leasing, operating, and servicing its equipment. We believe that as more companies outsource their natural gas compression needs Archrock is well-positioned to capture this growing demand.”

A close-up view of a natural gas compression equipment, with parts and components scattered on the ground.

Archrock, Inc. (NYSE:AROC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Archrock, Inc. (NYSE:AROC) at the end of the fourth quarter compared to 23 in the third quarter. While we acknowledge the potential of Archrock, Inc. (NYSE:AROC) 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.